Tag: Tax deduction

KENTUCKY RURAL DEVELOPMENT QUICK REFERENCE GUIDE

Logo of the USDA Rural Development office, par...
Logo of the USDA Rural Development office, part of the Department of Agriculture. (Photo credit: Wikipedia)

KENTUCKY RURAL DEVELOPMENT QUICK REFERENCE GUIDE

100% * NO MONEY DOWN LOAN and LOW  “MI” * Seller Can Pay All CC’s
GENERAL INFO
• 29% PITI, 41% TD ratios
• (waivers allowed with good credit)
• Debts with 6 months or more owed will be
counted
• Property must be located in eligible RD areas
Land value cannot exceed 30% of total value
• In-ground swimming pools may be approved with
waiver
• No substandard homes
• No existing manufactured homes
• CAIVRS number(s) needed
ELIGIBILITY
• First time homebuyer not a requirement
• Income must be within RD limits
• Income must be adequate and stable
• Adequate ability to repay the loan
• Acceptable credit history
• Be without an adequate dwelling
• Cannot obtain conventional financing
• Citizen or permanent resident alien
• Owner occupied
• Legal capacity to incur debt
• Bankruptcy OK if discharged for 36 months
INCOME ELIGIBILITY
• All household income counted
• Overtime, bonuses, and commissions count, if
supported by history
• Child support counts –may be grossed up 25%
• Self-employment – (use IRS net income) – 2 year
history plus current information needed
• Same job or line of work for past 12 months
(some exceptions allowed)
• Written verification of SS, SSI, etc.
• Degree or certification can substitute for job time
• All income must be verified
GROSS INCOME DEDUCTIONS/ADJUSTMENTS
• $480 for each child under 18
• Over 18 counts if full time student living at home
• Actual child care expenses for children 12 or
younger if parents work or attend school
• $400 for applicant or co-applicant if disabled or
elderly
• Medical deductions may be considered for
disabled or elderly applicants (above 3% of gross
income
KEY POINTS
• No Down Payment
• 100% Guaranteed financing
•  LOW  MONTHLY “MI”  of .40 basis points . Much lower than FHA which is 1.25% basis points. —Almost $100 cheaper on Kentucky RHS loan vs FHA loan, plus no 3.5% down payment needed like FHA requires.
• Terms—30 year fixed
• Guarantee fee of 2% of loan amount
• Refinance Fee 2.0 % of loan amount
• Appraised values can be exceeded by amount of
guarantee fee—up to 102% LTV
• Streamlined credit documentation with FICO of
640 or higher
• Unlimited Gifts or Seller Contributions
• Down-payments accepted up to 19%
• Guarantee Fee is fully Tax Deductible in the year
it is paid
• No Loan Limit (Ratio Determined)
• Partner with other Funding Sources
• AUS System – GUS – Being Developed
• Regular Program updates
• Monthly Newsletter by email
EXISTING DWELLINGS
• Satisfactory appraisal
• Thermal certification NOT required
• Well test
• Septic system certification
• Termite letter
NEW CONSTRUCTION
• Satisfactory appraisal
• Thermal certification
• Plan certification
• One year warranty on footings, framing, and final
inspection
• Termite Soil Treatment Certificate
• Well test
LOAN PURPOSES
• Purchase New
– Stick or Modular
– Manufactured (from approved dealer)
• Purchase Existing
• Stick or Modular
• Repairs/Rehab
• Refinance
• RD Direct Loans
• RD Guaranteed Loan
• Typical Loan Closing Costs
USDA Rural Development

RD PROGRAM – WEBSITES

Eligibility Website:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

http://www.rurdev.usda.gov/rhs/sfh/sfh%20guaranteed%20loan%20in
come%20limits.htm

KY “MAPS”: http://www.rurdev.usda.gov/ky/maps.htm
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

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