I am a Kentucky based USDA Mortgage Lender that has originated over 200 KY Rural Housing Mortgage Loans in Kentucky, Put my expert advice to use. Kentucky Rural Development RHS loans give KY Rural Homebuyers a zero down mortgage loan with a low 30 year fixed rate loan. A Local Kentucky Rural Housing Mortgage Lender offering same day free approvals and credit report. This website is not affiliated with USDA or any other government agency. NMLS#57916 Equal Housing Lender Text or call today 502-905-3708 with your mortgage questions about USDA Rural Housing Loans in Kentucky. Free Pre-Approvals on most applications within the same day. Kentuckyloan@gmail.com NMLS# 57916 Joel Lobb Loan Originator, American Mortgage Solutions NMLS ID. 1364 Equal Housing Lender
Effective January 1, 2024, the current interest rate for Single Family Housing Direct home loans is 5.125% for low-income and very low-income borrowers.
Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower
Interest rate when modified by payment assistance, can be as low as 1%
Up to 33 year payback period – 38 year payback period for very low income applicants who can’t afford the 33 year loan term
Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower
Interest rate when modified by payment assistance, can be as low as 1%
Up to 33 year payback period – 38 year payback period for very low income applicants who can’t afford the 33 year loan term
Not the same as the USDA Rural Housing Guaranteed Program. These rates follow the secondary market and change daily like FHA, VA, Conventional Mortgage Loans and set by individual lenders based on lock period, credit score, loan amount, state, and other incentives
the current interest rate for Single Family Housing Direct Home Loans
The USDA 502 Direct Loan Program helps low- and very-low-income applicants in federally-determined rural areas of the state obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. This payment assistance is a type of subsidy that reduces the mortgage payment. The amount of assistance is determined by the adjusted family income.
A number of factors are considered when determining an applicant’s eligibility for this loan. At a minimum, applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house and they must demonstrate a willingness and ability to repay debt.
seller concessions to pay mortgage closing costs in Kentucky for FHA, VA, USDA and Fannie Mae Home Loans
Kentucky Rural Housing Loans
Kentucky USDA loans are mortgages made by lenders and guaranteed by the U.S. Department of Agriculture. They are available to moderate- and low-income borrowers to build, rehabilitate, improve or relocate a primary residence in eligible rural and suburban areas. The income limit is 115 percent of the median income in your area. You can check the income limits for your area here.
It can be closed with zero down. USDA loans do have a monthly insurance requirement, but the upfront fee is significantly lower than on the VA loan and the mortgage premiums are lower than on the FHA loan.
The problem is that the number of buyers who qualify for a USDA loan is much smaller. Unlike on other loans where more income is better, a USDA loan has strict income maximums.
Credit Score Required for Kentucky Rural Housing Loans
There is no minimum credit score for a USDA loan, but you are automatically ineligible if you are presently delinquent on a nontax federal debt.
Automated approval is available if you have two tradelines reported on your credit history and acredit score of 640 or higher.
If you do not have sufficient credit data, the underwriter can assess your creditworthiness other ways, such as by examining your history with rent payments. Applicants with a credit score lower than 640 will undergo additional underwriting steps.
Why Would a Seller Agree to a Seller Credit?
Seller Benefits:
~ Seller credits help a home sell faster in buyer markets.
Price Reductions are costlier to a seller than credits.
~ Innovative “Good Will” to support a new homeowner adjusting to homeownership.
When the housing market turns into a buyer’s market, selling a home can be quite competitive.
The seller is no longer expecting to receive 100% or more of their asking price and instead expects to take less than their asking price to sell their property.
Therefore, they may offer a credit to attract more people to buy their home. After all, the seller is only concerned about selling their home at a reasonable price and selling it as quickly as possible. Seller credits and concessions are a very popular tactic to give the perception that buying their home is better. Seller credits work because many first-time buyers struggle to come up with the down payment and closing costs, and seller credits ease that burden.
Buyer Benefits:
~ Allows the buyer to ease into homeownership by paying below fixed-rate payments.
~ Does not increase the loan amount. The loan amount amortizes as a standard fixed-rate loan.
~ Safe way to take advantage of a lower payment in a rising rate environment.
A Seller Credit Can:
= Offset closing costs
= Permanentlv Reduce an interest rate
= Temporarily Reduce an interest rate
In all three scenarios, this helps your buyers. Each buyer has different needs, so it is up to you to help them In all three scenarios, this helps your buyers.
Each buyer has different needs, so it is up to you to help them figure out how to best apply a seller credit.
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.
On the top left hand side, click “Single Family Housing Guaranteed”
Click “Accept”
Enter the property address to determine if a specific house or general area is located in an USDA eligible area
The household income must be moderate as determined by USDA. The USDA Loan evaluates household income, which includes the combined income of all adults living in the household; even if they are not on the mortgage loan. Click here to determine your household income eligibility.
If it appears that the household income exceeds the moderate income thresholds established by USDA, do not throw in the towel just yet. USDA allows for deductions for child care and medical expenses as well as for children, students, and elderly members of the household that will be living in the USDA financed property.
This is not a farmer’s loan. As a matter of fact, the property cannot have any income producing capabilities, and when the land value of the property exceeds 30% of the appraised value additional requirements must be met.
The house has to be in fairly good condition. The appraisal type being utilized is an FHA appraisal, so make sure that there are not any safety related challenges(i.e. missing banisters, peeling paint, exposed electric).
This is a true no money down loan program. Or stated differently, you do not need a down payment.
While there is a monthly mortgage insurance premium (or prorated portion of an Annual Fee), the cost of the monthly mortgage insurance is 59% less than a comparable FHA Loan. This makes the USDA loan more affordable than an FHA Loan when analyzing down payment requirements and monthly mortgage payments.
The seller can pay all closing costs and pre-paids (i.e. escrows). Often the home buyer’s only out-of-pocket cost as part of the purchase transaction is approximately $550 for the appraisal report.
If the house appraises for more than the purchase price, the difference can be used to pay for closing costs and pre-paids (i.e. escrows). Only the USDA Loan program allows for closing costs to be rolled on top of the purchase price.
USDA has no restriction on whether you are a first time home buyer or move-up home buyer.
This loan program is only for primary residence (i.e. no second home or investment properties).
You should not own any other functional property; although there are some circumstances under which USDA may waive this requirement.
The preferred minimum credit score is 640. However, if you have a documented rent history, no late payments on your credit cards, and no new collections within the last 12 months, a credit score as low as 620 may be considered.
All property types including single family homes, town homes, modular, and even condominiums qualify for this loan program. Manufacture homes such as single and doublewides constructed prior to January 1, 2006 do not qualify.
There is no maximum mortgage amount, but the house does have to be considered moderate in a size
USDA Loans in Kentucky. Updated Qualifying Guidelines
What is Kentucky USDA Rural Development Guarantee?
Kentucky USDA Rural Development Guarantee USDA loans offer 100% financing options on home purchases in rural areas of Kentucky. Properties though can be located within city limits and in subdivisions depending on the population density of that particular County of Kentucky. Jefferson and Fayette Counties, the two largest counties of Kentucky are not eligible for Rural Development Loans.
Full Credit Guidelines below ….click on link for USDA Mortgage Credit Guidelines
Upfront Rural Housing funding fee of 1% of the loan amount and is financed into new loan
No Minimum credit scores but helpful to have 620 or higher with most USDA lenders with a 640 and get an automated underwriting approval thru Rural Housing’s underwriting engine – GUS-GUS Stands for the automated Underwriting system they use online to pre-approve you for a loan.
Each lender will set their own credit and debt to income criteria
No rental verification needed with GUS approval
No foreclosures in the last 36 months,
A bankruptcy discharged at least 36 months
For a USDA eligible areas in Kentucky, see the property and income eligibility search, please click HERE.
Things to look for in your Rural Housing property search in Kentucky below:
Avoid homes in flood zones – RD is very restrictive for homes in flood zones. They will do them in flood zones just watch out for the costly premiums.
Avoid homes with cisterns – they are extremely difficult to get financed
Be aware that homes with wells and septic systems needed extra tests for contamination
Avoid homes with any income-producing activities such as working farms, detached buildings with offices or car lifts for auto repairs, or anything else related to income-producing activities.
Manufactured homes or doublewides must be brand new. No used mobile homes are allowed.
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.
USDA Rural Housing Loans in Kentucky Cannot Be Closed Currently!
The U.S. Department of Agriculture will not issue new Kentucky USDA Direct Loans or Kentucky Guaranteed Loans 502. This is due to the ongoing shutdown by the Federal Government.
Kentucky FHA, VA, Fannie Mae, and KHC loans are being closed currently as of this writing.
Current Scheduled closings of Kentucky Direct Rural Housing Loans are being canceled and unless your guarantee was previously issued for a Guaranteed Loan, those may or may not be closed, depending on the lender.
Check with your USDA lender immediately if you’re getting a USDA loan or had planned to use the program to buy a home; you might have to put off your purchase until the shutdown is resolved.
Kentucky USDA Mortgage Lender for Rural Housing Loans 