Tag: Payment

New Rural Housing and USDA Property Eligibility guidelines for Kentucky Cities

New Rural Housing and USDA Property Eligibility guidelines for Kentucky Cities

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As of Thursday, March 28, 2013, RHS  or Rural Housing Loans will use the 2010 Census Data for Kentucky cities, which will impact certain cities in regards to their eligibility for RHS or USDA , rural housing  loans in Kentucky .  Unless there are other changes to this regulation, the cities that would become ineligible include:

Kentucky USDA and Rural Housing Guaranteed Home Loan Program

Joel Lobb (NMLS#57916)Senior  Loan Officer

502-905-3708 cell

502-813-2795 fax

jlobb@keyfinllc.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Fill out my form!

 

 

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Credit Requirements for A Kentucky Rural Housing RHS Mortgage Loan

2013 Credit Requirements for A Kentucky Rural Housing RHS Mortgage Loan  Kentucky First Time Home Buyers---Zero Down Loans Still Exist
REQUIREMENTS
  • · Credit report must match GUS Findings.
  • · Must not be older than 120 days on the date of closing for existing properties and 180 days for proposed and new construction.
  • · Must contain complete information provided by all three repositories.
  • · The credit report must show the following three required FICO scoring models for the report to be valid with Platinum Mortgage, Inc.:

1. Equifax Beacon 5.0

2. Transunion FICO Risk Score, Classic 04

3. Experian/Fair Isaac Risk Model V2.

  • · Must reflect a minimum of 1 score per borrower.

TRADELINE REQUIREMENTS:

GUS Approved: Each credit report must contain 2 acceptable tradelines with at least 12 month history and last active within the last 24 months (see below regarding acceptable tradelines).

Manual Underwrite: As determined acceptable by the underwriter.

CREDIT SCORE
  • · If more than one score is supplied by the same repository, the lesser of the scores will be used.
  • · Determining Qualifying Credit Score:

o Middle of 3

o Lower of 2

o If only one score is provided, that score is the qualifying credit score for that borrower.

Minimum credit score for:

  • · Manual Underwrite = 660
  • · GUS Approval = 660

LIABILITIES & CREDIT HISTORY

(INDEX)

H
OPEN CHARGE ACCOUNTS
ALIMONY, CHILD SUPPORT, OR SEPARATE MAINTENANCE
  • · Court-ordered payments should be documented by a copy of the court order.
  • · Borrower(s) must have an acceptable existing repayment plan for any arrearages and proof of 12 months on time payments, and/or be required to pay account in full prior to, or at closing.
  • · See Collections/Chargeoffs for additional requirements if there are arrearages.
CONTINGENT LIABILITIES
  • · If the borrower is a co-signer on an account paid by a 3rd party, the liability may only be excluded from the borrower debt ratios if evidence the primary obligor has been making the payments on time on the debt for a minimum of 12 months can be obtained.
  • · Court-ordered assignment of debt should be documented by a copy of the court order. Must have 12 months cancelled checks from the payer of the court ordered debt in order to exclude from the debt ratio.

PREVIOUS MORTGAGE:

  • · Section 1980.345(c)(1)(ii) requires all previous mortgage liabilities disposed of through a sale, trade, or transfer without a release of liability, to be included in the debt ratio calculation unless evidence can be obtained to confirm the remaining party has made payments over the last 12 months.
  • · In divorce settlements when one person retains ownership of a residence as a result of the proceedings, it does not imply that the person relinquishing ownership is automatically released of the financial liability associated with an existing mortgage debt. The divorce decree along with a release of liability from the mortgage creditor must be presented as evidence that an applicant is no longer legally responsible for the mortgage payment. If no release of liability is granted by the creditor then the applicant remains legally obligated for the debt. Quit claim deeds do not remove liability for mortgage debts.
DEFERRED INSTALLMENT DEBT May not be omitted from debt ratio. If the credit report does not reflect a monthly payment due at the end of the deferment period, the lender may request a copy of the applicant’s payment letter, or utilize the industry standard of estimating student loan payments as 1% of the loan balance.
NON-REIMBURSED EMPLOYEE EXPENSES If the borrower claims any non-reimbursed employee expenses (IRS Form 2106 or 1040 Schedule A), the borrowers monthly income should be reduced by the annualized monthly average.
BUSINESS DEBT IN BORROWER’S NAME When the account in question does not have a history of delinquency, the debt may be excluded with satisfactory evidence the obligation was paid out of company funds (such as 12 months cancelled company checks). If the account in question has a history of delinquency, the full debt obligation must be included in the borrower’s debt ratio.
FINANCED PROPERTIES Additional financed properties are generally not permitted as borrower may not own any other suitable housing at time of closing.
DEBTS WITH <6 REMAINING PAYMENTS The total debt ratio should include revolving debt regardless of when the debt will be retired. Installment loans will only be considered if the debt will be retired in more than six months. However, if the monthly payment on the debt is substantial, the payment will also be included in long term debt. The GUS system will automatically exclude debt that is eligible to be excluded. If not excluded by GUS the debt must be included in the debt ratio.
“PAYING DOWN” ACCOUNTS Not permitted. Settlement offers will not be considered as proof of balance
SETTLEMENT OFFERS Are acceptable on accounts that will be paid in full at closing as long as the offer is in writing from the creditor reporting on the credit report.
PAST DUE ACCOUNTS (NOT A COLLECTION OR CHARGE OFF) Recent derogatory credit >1×30 within the previous 12 months is not permitted unless approved by GUS. All past due accounts must be current at time of closing.
COLLECTIONS/ CHARGE OFFS
  • · No accounts converted to Collection/Charge off in previous 12 months allowed, unless approved by GUS.

GUS Approved:

  • · Medical Collections/Charge offs are not required to be paid.
  • · Other Collections/Charge offs, if >24 months, not required to be paid, otherwise accounts must be paid in full prior to, or at, closing.

Manual Underwrite:

  • · Medical Collections/Charge offs are not required to be paid.
  • · Other Collections/Charge offs must be paid in full prior to, or at closing.

Any unpaid Collections/Charge offs will require a satisfactory letter of explanation from the borrower.

OUTSTANDING FEDERALLY INSURED OR GUARANTEED DEBT Borrower(s) must have an acceptable existing repayment plan (minimum of 12 months), and/or be required to pay account in full prior to, or at closing. Borrower must also be cleared through CAIVRS.
JUDGMENTS/LIENS
  • · Must be paid at, or prior to, closing.
  • · Borrower(s) may not have any new Judgments/Liens within the previous 12 months, unless approved by GUS.
BANKRUPTCY (ALL) 3 years seasoning required from Discharge or Dismissal date.
FORECLOSURE 3 years seasoning required.
DEED-IN-LIEU OF FORECLOSURE 3 years seasoning required.
SHORT SALES 3 years seasoning required.
COMPENSATING FACTORS Some compensating factors include:

  • · Conservative use of credit
  • · Minimal increase in borrower’s housing expense
  • · Substantial cash reserves after closing
  • · Credit score >660
  • · Low total debt ratio (does not compensate for high housing ratio)
MULTIPLE RISK LAYERING Multiple risk layering is not allowed on manually underwritten loans:

  • · Payment Shock (>100%)
  • · Ratio Waiver
  • · Credit Waiver
  • · Credit Score <660
  • · Short Duration of Employment (less than 12 months employment with current employer)
Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

applynow

DEFERRED STUDENT LOANS AND DEBT RATIO CALCULATIONS Kentucky Rural Housing Loans and USDA Loans in KY

DEFERRED STUDENT LOANS AND DEBT RATIO CALCULATIONS  for Kentucky Rural Housing Loans and USDA Loans in KY

 

RHS Student Loan DTIs

 

Due to the variable nature of some student loan plans, RHS is standardizing the process of including them in the debt ratio. All student loans will now require documentation verifying the current payment due.

 

For student loans which are Conventional, Fixed Payment, and/or Deferred:

  • Account statements will be reviewed and fixed monthly payment will be used with no adjustments.
  • Deferred student loans not in repayment will use an estimated payment of 1% of the loan balance unless a documented fixed payment from the loan servicer can be provided.

 

For student loans with Income Based Repayment plans:

  • If the current payment is greater than $100, that payment can be used.
  • If the current payment is less than $100 and total loan balance is greater than $10,000, a minimum $100 payment must be included in the debt ratio.
  • If the current payment is less than $100 and total loan balance is less than $10,000, then the current payment may be used

 

Please note that documentation of an Income Based Repayment agreement must be provided. Payments of $0 are not eligible to be used in the debt ratio. Verifications are only valid for 120 days, 180 days for new constructions

 

DEFERRED STUDENT LOANS AND DEBT RATIO CALCULATIONS

. A 100% 30 year fixed interest rate loan with flexible credit and qualifying ratios along with other benefits, will open the door to a new market and new growth possibilities.

We look forward to a long and productive relationship this affordable housing product to the people of Kentucky and to a strong partnership in the Kentucky GRH Program.

For the USDA Rural Development Single Family Housing Guaranteed Loan Program, deferred student loans should be included in the debt ratio calculations for Guaranteed Loans regardless of the deferment period.

Rural Development RD Instruction 1980-D, section 1980.345(c)(1) states:

“Long term obligations include those obligations . . . with a remaining repayment period of more than 6 months and other shorter term debts that are considered to have a significant impact on repayment ability.”

Deferred student loans are long term obligations with remaining repayment periods of more than 6 months, and they must be included as part of the

applicant‟s recurring monthly debt obligations. If the credit report does not reflect a monthly payment due at the end of the deferment period, the lender may request a copy of the applicant‟s payment letter, or utilize the industry standard of estimating student loan payments as 1% of the loan balance. Therefore a deferred student loan balance of $12,000 should have a corresponding monthly payment of $120 if no estimated payment is verified by the lender.

This guidance applies to all manually

DEFERRED STUDENT LOANS AND DEBT RATIO CALCULATIONS Kentucky Rural Housing Loans and USDA Loans in KY

Kentucky Rural Housing Loans and USDA Guaranteed Loan Underwriting Issues

Kentucky Rural Housing Loans and USDA Guaranteed Loan Issues

Seller Concessions:
Seller concessions cannot be used to pay down buyer’s debt.

Deferred Student Loans and Debt Ratio Calculations:
Deferred student loans should be included in the debt ratio calculations regardless of the
deferment period. If the credit report does not indicate a monthly repayment amount, Lender may use the monthly payment amount provided by the loan servicer, or 1% of the loan balance reflected on the RMCR.

Risk Layering:
Refers to the existence of multiple levels of risk in an application such as marginal credit, high repayment ratios, extensive use of other credit, payment shock, etc. Lenders should be very cautious when evaluating applications with multiple risk levels.

Payment Shock:
Measured by dividing the new PITI by previous housing expenses minus 1. In cases where payment shock is 100% or higher, no additional risk layering should be allowed unless strong compensating factors are present.
Example:
New PITI = $1,500
Current Rent = $650
$1500 ÷ $650 = 2.30 ‐ 1= 1.30 or 130%
The payment shock in this example is above 100% and therefore is a risk factor.

Credit Waivers:
The lender approves a credit waiver and supplies all back up documentation used in the decision making process. Lender must document that the instances of unacceptable credit must have been temporary in nature and beyond the applicant’s control or the result of a justifiable dispute relative to defective goods or services. A lender need not require collection accounts to be paid in full if there are mitigating circumstances as described in RD Instruction 1980.345 (d)(3). Credit scores of 640 and above may eliminate the need for lender documentation of credit waivers.

Interest Rate Buydowns:
Temporary interest rate buydowns are permitted with prior RD approval. Underwriting
requirements for temporary interest rate buydowns include:
 The mortgage loan must be underwritten at the note rate.
 Buydown funds may come from the seller, lender, or third party.
 Buydown funds may not come from the borrower.
 The initial interest rate is temporarily reduced no more than 2% below the note rate
and increased by no more than 1% annually for no more than 2 years.

October 2012 Kentucky USDA and Rural Housing Loans Changes for Property Eligibility Locations in Kentucky.

October 2012 Kentucky USDA and Rural Housing  Loans Changes for Property Eligibility Locations in Kentucky. 



October 1, 2012 over 900 communities across the USA will lose their eligibility for 100% USDA Rural Housing loans including cities in Kentucky that where once eligible. If you know of buyers looking in these communities they need to act now. They should probably be under contract by end of August to be safe. There is no indication this expiration will be delayed. See the cities below that will be no longer eligible come 10/1/2012 for a Rural Housing USDA Loan in Kentucky 




 Bardstown,  KY, Nelson County  
 Burlington, KY,   Boone County  
 Elizabethtown, KY,   Hardin County 
 Georgetown, KY,  Scott County 
 Independence, KY,   Kenton  County 
 Nicholasville , KY, Jessamine County
 Shelbyville, KY , Shelby County
 Shepherdsville. KY , Bullitt County 




To see an eligible Kentucky Map for Kentucky USDA Mortgage Loans for Rural Housing Mortgages in Kentucky  Please clink the following link below:

https://kentuckyusdaloan.com/ 

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Kentucky USDA and Rural Housing MI Mortgage Insurance Changes October 2011

Kentucky USDA Rural Development has long been the 100% financing leader for a lot of areas across the nation. One of the major benefits of this loan product was that it required no monthly escrows for an annual mortgage insurance (MI). MI is sometimes referred as PMI, and the loan is advertised many times as 100% Financing with No PMI. That’s all going to change come October 1, 2011.

USDA issued Administrative Notice 4551 on February 24, 2011 that alluded to this upcoming change. The change has been confirmed in an email that also included instructions on how to calculate the fee.

Following in the footsteps of what the Federal Housing Administration (FHA) did back in October of 2010, USDA will be lowering the up-front guarantee fee. FHA lowered their fee from 2.25% to 1%. USDA will be lowering their up-front guarantee fee from 3.5% back down to the 2%. That’s a nice change!
THE BIG CHANGE!


However, the other change is that it will now require a 0.3% annual mortgage insurance fee. While this fee is an annual fee, it is collected monthly in escrow like most mortgage insurance payments. In it’s basic form, on a $100,000 loan the calculation would be like this:

100,000 X 0.3% = $300 annual fee

$300 annual fee / 12 mo = $25/mo

Here’s a look at an example of a $100,000 of how it is currently and how it will change come October 1, 2011. Keep reading below for a look at the comparison of how a loan will look now vs. after Oct 1, 2011.

USDA adds monthly MI to loan for the life of the loanHere’s another major difference between Kentucky USDA’s annual MI premium and most other premiums. Kentucky USDA’s annual MI premium will be assessed the entire life of the loan. Mortgage insurance on both conventional and FHA loans is scheduled to cancel when the loan balance reaches 78% of the original purchase price. For an FHA loan with a 3.5% down payment, this is sometime between year 12 and 13. Compare that with USDA’s premium that could last the entire 30 years!
Here is a look at how it will affect borrower’s come October 1, 2011.

Assumptions: $100,000 purchase price with $0 down payment. 5% 30 year Fixed Rate. No monthly escrows for property taxes, homeowner’s insurance and/or HOA’s are included.
NOTE: Before someone picks apart my calculation of the guarantee fee, and total loan amount, and annual MI calculations, this is simplified just to show the basic differences.

   
Current – Sep 30, 2011 On or after Oct 1, 2011
Up-front Guarantee fee = 3.5%
Annual MI = 0%
$100,000 base loan x 3.5% fee

Total Loan Amt = $103,500
P&I Pmt = $555.61

Total Payment:

$555.61

Total Fees collected by USDA:
~$3500

Up-front Guarantee fee = 2.0%
Annual MI = 0.3%
$100,000 base loan x 2.0% fee

Total Loan Amt = $102,000
P&I Pmt = $547.56
New MI pmt = $25
Total Payment:
$572.56
Total Fees collected by USDA:
$2000 + ~$6300 in annual premiums
~$8300!

It’s fairly clear that Kentucky USDA Rural Development is hopefully taking strides to make itself self-sufficient where it doesn’t have to rely on funding from the federal government each year. October 1, 2011 will begin a new fiscal year.

This change will affect any new Kentucky USDA loans where the conditional commitment is issued on or after October 1, 2011.

Kentucky USDA Rural Development Guaranteed Section 502 Loans

Kentucky Rural Development Guaranteed Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

Guaranteed Section 502 Loans Kentucky

Eligibility: Applicants for Kentucky loans may have an income of up to 115% of the median income for the area. Area income limits for this program are here.   Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.  In addition, applicants must have reasonable credit histories.
Approved lenders under the Single Family Housing
Guaranteed Loan program include:

Terms: Loans are for 30 years.  The promissory note interest rate is set by the lender.
There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.

Standards: Under the Section 502 program, housing must be modest in size, design, and cost.   Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.  Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.

Approval:Rural Development officials have the authority to approve most Section 502 loan guarantee requests.

Guaranteed Section 502 Loans Kentucky

Basic Instruction: 7 CFR Part 1980.

We are not affiliated with, nor a part of USDA or any other Government Agency.

Current Kentucky mortgage rates today August 13, 2011

Current Kentucky mortgage rates today August 13, 2011.

 

Kentucky FHA, VA, KHC, USDA , Conventional Mortgage Rates Today

Kentucky First Time Home Buyer Grants and Loan Programs

Kentucky First Time Home Buyer Grants and Loan Programs.