I am a Kentucky based USDA Mortgage Lender that has originated over 300 KY Rural Housing Mortgage Loans in Kentucky-CALL OR TEXT 502-905-3708 FOR USDA MORTGAGE LOAN
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.
Not every community qualifies—but if it does, it’s the best thing since sliced bread!
Check your listings to see if the property location qualifies. http://eligibility.sc.egov.usda.gov. Generous household income limits also apply, and you can check them out at this link as well.
Generate phone calls by letting everyone know 100% financing is still available for eligible properties and borrowers.
Add an additional note to the listing info and mention it in your ads.
Buyer Qualifications Highlights
• No down payment required, and zero move-in cost is possible.
• 30-year fixed rate loan.
• 6% seller contribution limit allowed.
• Lender closing cost contribution by premium pricing allowed. Does not count against 6% seller limit.
• 100% Loan up to appraisal allowed plus you can add the 1.00% Guarantee Fee on top of that.
• Low .35% Annual Fee included in monthly payment.
• Finance closing costs & prepaids if appraisal Is higher than sales contract.
• No stated maximum loan amount; maximum loan based on repayment ability.
• No cash contribution required from borrower.
• No pre-payment penalty
• Liberal income limits (by county)
• Gift funds and grants allowed.
• No cash reserve requirements.
Property Qualification Highlights
• Existing Home
• New Construction
• New Manufactured Homes (Existing MH allowed under test program in 22 states)
• Previously occupied manufactured homes…unless refinancing existing Agency loan or home built on or after 2006 and in the certain states (22 test states).
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Joel Lobb Mortgage Loan OfficerIndividual NMLS ID #57916
Minimal credit score requirements – NO minimum score
Low monthly mortgage insurance
Home must be located in an eligible area
Home must meet property eligibility requirements
Fill out worksheet to get additional information about qualifying
Must be a regular stick-built home
Single Close Construction Program available
USDA to USDA Streamline Refinances available
SFH Direct Loan and Grant Programs
February 7, 2022
Fee Increases for Origination Appraisals and Conditional Commitments
An Unnumbered Letter (UL) dated February 4, 2022, has been issued which increases the appraisal fee to $750 and the conditional commitment fee to $825 under the direct programs. The fee increases are effective March 6, 2022. The increased fees reflect market price increases for origination appraisals in rural areas and the average cost of appraisals under the programs’ nationwide contract with the Appraisal Management Companies.
There are two types of Kentucky USDA Rural Housing Home loans available to rural Kentucky Home buyers through Rural Development:
Direct homeownership loans and guaranteed home ownership loans.
Let’s first look at the 502 Direct USDA Loan in Kentucky
502 Direct USDA Loan in Kentucky:
With a Kentucky Direct Loan 502, the applicant applies directly to the USDA office serving their location in Kentucky. There are about 13 different locations . They lend the money direct from USDA , 100 percent financing, for the low rate currently at 3 percent on a 33 year term.
For a direct home loan, the purchase, construction, repair and rehabilitation of a single family home in rural areas must be used for the applicant’s permanent residence. “For manufactured housing, only new construction can be funded,” he explained.
Credit scores of 640 or greater are typically acceptable with a minimum number of trade lines (2 usually for 12 months can be opened or closed) that have been open and active.
No down payment typically is required- Loans may be up to 100 percent of the appraised value. Homebuyer education is required prior to closing for the Direct USDA Loan 502 program
Mortgage payments are based on what the applicant can afford to pay. USDA offers payment assistance/subsidies to make it affordable. When you go to payoff the USDA Direct loan, you may incur a subsidy recapture fee.
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There are two types of Kentucky USDA Rural Housing Home loans available to rural Kentucky Home buyers through Rural Development:
Direct homeownership loans and guaranteed home ownership loans.
Let’s first look at the 502 Direct USDA Loan in Kentucky
502 Direct USDA Loan in Kentucky:
Rural Home Loans (Direct Program) What does this program do? Also known as the Section 502 Direct Loan Program, this program assists low- and very-low-income applicants obtain decent, safe, and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income. Who may apply for this program? A number of factors are considered when determining an applicant’s eligibility for Single Family Direct Home Loans. 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. Applicants must: • Be without decent, safe, and sanitary housing • Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet • Agree to occupy the property as your primary residence • Have the legal capacity to incur a loan obligation • Meet citizenship or eligible noncitizen requirements • Not be suspended or debarred from participation in federal programs Properties financed with direct loan funds must: • Be modest in size for the area • Not have market value in excess of the applicable area loan limit • Not have in-ground swimming pools • Not be designed for income producing activities Borrowers are required to repay all or a portion of the payment subsidy received over the life of the loan when the title to the property transfers or the borrower is no longer living in the dwelling. Applicants must meet income eligibility for a direct loan. Please contact your local RD office to ask for additional details about eligibility requirements. What is an eligible area? Generally, rural areas with a population less than 35,000 are eligible. Visit the USDA Income and Property eligibility website for complete details. How may funds be used? Loan funds may be 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. How much may I borrow? The maximum loan amount an applicant may qualify for will depend on the applicant’s repayment ability. The applicant’s ability to repay a loan considers various factors such as income, debts, assets, and the amount of payment assistance applicants may be eligible to receive. Regardless of repayment ability, applicants may never borrow more than the area loan limit (plus certain costs allowed to be financed) for the county in which the property is located. Rural Home Loans (Direct Program) What is the interest rate and payback period? • Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower. • The monthly mortgage payment, when modified by payment assistance, may be reduced to as little as an effective 1% interest rate. • Up to 33 year payback period – 38 year payback period for very low income applicants who can’t afford the 33 year loan term. How much down payment is required? No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets. Is there a deadline to apply? Applications for this program are accepted through your local RD office year round. How long does an application take? Processing times vary depending on funding availability and program demand in the area in which an applicant is interested in buying and completeness of the application package. What governs this program? • The Housing Act of 1949 as amended, 7 CFR, Part 3550 • HB-1-3550 – Direct Single Family
Kentucky USDA Mortgage Lender for Rural Housing Loans 