Kentucky USDA Rural Development Single Family Housing Guaranteed Loan Program

Kentucky Guaranteed Loans Offer Affordable Financing To Rural Homebuyers.

The mission of Kentucky Rural Development’s Single Family Housing Guaranteed Loan Program is to assist low to moderate income rural Kentucky  homebuyers achieve their dream of homeownership!

Kentucky Rural Development partners with approved local lenders to extend 100% financing opportunities to eligible rural individuals and families for the purchase of safe and sanitary dwellings. Guaranteed loans have assisted thousands of homeowners to purchase a home with affordable interest rates and loan terms.

Applicants must purchase a home within the eligible rural areas, and have a household income that does not exceed the established limits where the home is located. Additional Guaranteed Loan Features include but are not limited to:

• 100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included.
• Guarantee Fee applies: may be rolled into the loan amount.
• Flexible credit guidelines. Non-traditional credit histories may be accepted.
• Fixed 30 year interest rates apply. Lenders and applicants agree upon interest rate.
• Qualifying ratios are 29% for housing costs and 41% for total debt. Lenders may request an exception to exceed these ratios when strong compensating factors are identified.
• No maximum purchase price. Qualifying ratios and the applicant’s stable and dependable income will determine home affordability.
• Eligible property types include existing homes, new construction, modular homes, Planned Unit Developments (PUD’s), eligible condominiums and new manufactured homes.
• Eligible closing costs and lender fees may be included in the loan or paid by the applicant.
• Gift/Grant Funds/Mortgage Credit Certificates (MCC’s)/Seller Concessions are allowed.
• Eligible repairs and improvements may be included in the loan.
• Applicants apply with an approved lender of their choice.
• Not limited to first time homebuyers.

Changes to RHS Guarantee and Annual Fee

Effective on October 1, 2012, RHS will revise the Up-Front Guarantee Fee and Annual Fee structure as follows:

Loan guarantee requests submitted to RHS by September 30, 2012, in which a conditional commitment has not been issued, will be subject to the new, October 1, fee structure.  Lenders are encouraged to plan for the changes because, as mentioned previously, some RHS offices are experiencing extreme backlogs in loan guarantee delivery.

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