Kentucky USDA Mortgage holders should look to  Streamline Refinance  for Customers wanting to lower their payments and reduce their mortgage insurance

PROGRAM REQUIREMENTS
Existing Loan Current loan may be a section 502 Guaranteed or Direct loan.
New Interest Rate The new interest rate must meet the following requirements: 1) Fixed, and 2) The interest rate may not exceed the existing rate (that described in RD
440.1)Maximum Interest Rate The maximum interest rate is based on the 90 day FNMA 30 year A/A Remittance rate as of the lock date + 100 basis points and rounded up to the next1/4%. The rates are found on the Fannie Mae website: http://www.efanniemae.com/sf/refmaterials/hrny/index.jsp

Net Tangible Benefit The new principal, interest, taxes, and insurance (PITI) must have at least a $50 reduction compared to the existing PITI. The reduction ($50) must be
independent of any change in the annual fee, which is included in the calculation.

Term The new term must be 30 years only.

Adding/Removing Borrowers Borrowers may be added, but not removed (unless deceased) from the current loan.

Maximum Mortgage Amount The mortgage amount may include the principal balance plus a portion or the full amount of the applicable upfront guarantee fee, accrued interest, funds to establish tax and insurance escrow, and eligible loan closing costs (discount points not permitted see below)

COLLATERAL
Appraisal No Appraisal required. A new appraisal is only required for direct loan borrowers that received a subsidy.

Eligible Collateral All dwellings must provide decent, safe, and sanitary at a modest cost (a dwelling with a purchase price not exceeding the FHA Single Family mortgage
limit for its county is considered modest), Owner Occupied Only. 1 Unit, PUD’s, Condos,
Ineligible Collateral Mobile homes, single-wide manufactured homes, co-ops, Condo Hotels, State approved medical marijuana producing properties, income producing farms, ranches, mixed use, commercial properties, leaseholds, properties with sink holes, properties served by cisterns, properties serviced by hauled water,
properties with a wastewater stabilization pond/lagoon (aka sewage lagoon), properties with individual water purification systems required to make the
water safe for human consumption (does not include systems installed to improve the taste or softness of the water).

CREDIT
CAIVRS and Exclusionary List CAIVR clearance must be obtained for all borrowers on the transaction. GSA/LDP/SAM clearance is required for all parties of the transaction within 30 days of USDA’s Conditional Commitment date.

Bankruptcy Chapter 7 and 13 must be discharged. The borrower(s) may not currently be in bankruptcy.
Judgments/Liens All outstanding judgments and liens must be paid.
Foreclosure / Deed-in-lieu Subject property may not have an active foreclosure.
Credit Report A tri-merge mortgage only rating for subject property with credit scores will be used. Not required.
Mortgage History 0x30 in the previous 12 months. Must have evidence of payment history over the previous 12 months. No exceptions. A mortgage-only credit report or
servicing verification (FiServ) is acceptable

INCOME/ASSETS
Income Documentation Income for all household members is required to determine if household income is under the USDA moderate income area limit. Income documentation is not used to calculate qualifying ratios.
Annual Income Limits Annual income is the basis for determining adjusted income. Annual income includes the total gross income of the borrower, co-borrower, and any otheradult (age 18 and up) household members, any amount anticipated to be received from a source outside of the family during the 12-month period, and all
amounts derived during the 12-month period from assets to which any member of the family has access.

If a cost of living allowance or a proposed
increase in income has been estimated to be in effect prior to the first month’s mortgage payment due date, this amount must be included as income. For
annual income, count only the first $480 of earned income from adult full time students who are not the borrower, co-borrower, or spouse.
Rental income is included regardless of duration. Include total rental real estate income reported on most recent IRS form 1040 Schedule E for previous 12
months.

If no schedule E, cancelled checks, money order receipts, bank statements, or other documents may be used to support rent amounts received

The USDA has announced effective October 1, 2016:

• Reduction in the Upfront Guarantee Fee: the upfront guarantee fee for purchase and refinance transactions will decrease from 2.75% of the loan amount to 1.00% of the loan amount.
• Reduction in the Annual Fee: The 0.50% annual fee will also decrease to 0.35%.

The new fee structure must be used for loans submitted in GUS on or after, Thursday, September 1, 2016.

Contact your Account Executive for more information on the fee changes or our USDA Streamline Assist Program.