Tag: USDA Rural Development

Kentucky USDA Guideline Changes for Income, Student Loans, and total debt ratios.


Updated HB-1-3555, Chapter 11, Ratio Analysis

The Single Family Housing Guaranteed Loan Program (SFHGLP) is pleased to announce revisions to technical HB-1-3555, Chapter 11, Ratio Analysis. An advance copy of the proposed changes was made available on July 20, 2021.  These changes became effective upon the recent issuance of a Procedure Notice (PN).  Below are the highlighted revisions:

Chapter 11- Ratio Analysis

11.2 B. The Total Debt Ratio:

  • Student Loans: Removed the phrase “the greater of” from Non-Fixed payment loans and added guidance regarding “when the payment is above zero” and “when the payment is zero”.
  • Revolving accounts: “with no outstanding balance” are not required to be closed.
  • Mortgages: Rental Property – Eliminated language regarding omission of mortgage debt.  Guidance for entry of rental income in GUS is provided in the GUS Lender User Guide under Section 4.1.4.1.1, Retained Investment Properties.
  • Added: Debt management plans:
    • Include the monthly payment amount due from the counseling plan.
    • Refer to Chapter 10 for guidance on credit exception and documentation requirements.

11.3 DEBT RATIO WAIVERS AND COMPENSATING FACTORS

A. Purchase Transactions: Debt Ratio Waivers

  • GUS Refer, Refer with Caution, and manually underwritten loans without GUS assistance:
    • Added: “The lender must document eligible compensating factors to support a debt ratio waiver.”
    • Added: “all” of the following conditions are met to the first paragraph.
  • Debt Ratio Waiver Request and Agency Approval:
    • Added: “The issuance of the Conditional Commitment for a Loan Note Guarantee represents Agency approval of the ratio waiver.”

B. Refinance Transactions: Debt Ratio Waivers

  • Added a bullet:  GUS files that receive a GUS recommendation of Refer, Refer with Caution, or are not supported by GUS, require debt ratio waivers, and supporting documentation must be submitted to the Agency.
  • Added: “The issuance of the Conditional Commitment for a Loan Note Guarantee represents Agency approval of the ratio waiver”. 

11.7 OBLIGATIONS NOT INCLUDED IN DEBT-TO-INCOME RATIOS

  • Added: “unless a payment plan is in place” to the second bullet concerning Federal, state, and local taxes.

Joel Lobb
Mortgage Loan OfficerIndividual NMLS ID #57916

American Mortgage Solutions, Inc.10602 Timberwood Circle Louisville, KY 40223Company NMLS ID #1364

click here for directions to our office
Text/call:      502-905-3708fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

Fiscal Year 2022 Conditional Commitment for Kentucky USDA Rural Housing Loans



Fiscal Year 2022 Conditional Commitment NoticeWith the start of Fiscal Year 2022 (FY) soon approaching, please take a few minutes to review the Single-Family Housing Guaranteed Loan Program (SFHGLP) Conditional Commitment process. We hope you find this information helpful.FY 2022 will begin October 1, 2021 and ends at the close of business September 30, 2022.Fee Structures:An upfront guarantee fee of 1.00 percent and an annual fee of .35 percent will apply to both purchase and refinance transactions for FY 2022.Issuance of Conditional Commitments:At the beginning of each fiscal year, funding for the guaranteed loan program is not available for a short period of time – approximately two weeks. USDA anticipates this brief lapse in funding to continue for FY 2022. During the temporary lapse in funding, Rural Development – Rural Housing Service (RHS) will issue Conditional Commitments (Form RD 3555-18/18E) “subject to the availability of commitment authority” for purchase and refinance transactions. The issued Conditional Commitment will include the following:“Funds are not presently available for this Conditional Commitment. The Rural Development-Rural Housing Service (RHS) obligation under this Conditional Commitment is contingent upon the availability of an appropriation from which payment for contract purposes can be made. No legal liability on the part of RHS for any payment on this Conditional Commitment may arise until funds are made available to RHS for this Conditional Commitment and until the Lender receives notice of such availability, to be confirmed in writing by RHS.  More specifically, this Conditional Commitment is subject to RHS receiving sufficient funds (in the Program Funds Control System for the Single Family Housing Guaranteed Loan Program for the Type of Assistance and State of application submission) to fund this and all prior eligible outstanding applications in their entirety in the time and date order received. When such funds become available, RHS will notify the lender, and the guarantee process will continue subject to all applicable Agency regulations and conditions set forth in this Conditional Commitment. RHS will not reserve loan funds for applications in process during this timeframe. Lenders may close the loan as scheduled. The lender will assume all risk of loss for the loan until RHS obligates funds and the Loan Note Guarantee is subsequently issued. When the lender requests the Loan Note Guarantee, the lender must certify to the Agency, using the process provided in this commitment, that there have been no adverse changes to the borrower’s financial condition since the date the Conditional Commitment was issued by the Agency. The lender will submit the appropriate guarantee fee at the time they request the Loan Note Guarantee. The loan will be subject to an annual fee of 0.35 percent over the average scheduled unpaid principal balance of the loan. The Agency will not be able to issue the Loan Note Guarantee until these conditions are met and funding is obligated.”The application processing workflow is as follows:Rural Development will continue to accept complete guaranteed loan applications for purchase and refinance loan transactions from approved lenders;Rural Development will process, approve, and issue Conditional Commitments for those applications that are eligible “subject to the availability of commitment authority”;Lenders may close loans as scheduled;When funds become available, Rural Development will utilize the Electronic Customer File (ECF) system to advance the file to “Obligate Application” for Conditional Commitments that were issued for loans subject to the availability of commitment authority;Once loans are obligated, Rural Development may process lender’s Loan Note Guarantee requests when the loan closing is verified, and all conditions of the Conditional Commitment are satisfied;Lenders assume all loss default risk for the loan until Rural Development is able to obligate the loan and issue the Loan Note Guarantee.  Thank you for your participation in the USDA Single Family Housing Guaranteed Program. We look forward to serving you in FY 2022!

Posted by Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA  Email ThisBlogThis!Share to TwitterShare to FacebookShare to Pinterest

Conditional Commitment for Kentucky USDA Rural Housing Loans


Fiscal Year 2022 Conditional Commitment NoticeWith the start of Fiscal Year 2022 (FY) soon approaching, please take a few minutes to review the Single-Family Housing Guaranteed Loan Program (SFHGLP) Conditional Commitment process. We hope you find this information helpful.FY 2022 will begin October 1, 2021 and ends at the close of business September 30, 2022.Fee Structures:An upfront guarantee fee of 1.00 percent and an annual fee of .35 percent will apply to both purchase and refinance transactions for FY 2022.Issuance of Conditional Commitments:At the beginning of each fiscal year, funding for the guaranteed loan program is not available for a short period of time – approximately two weeks. USDA anticipates this brief lapse in funding to continue for FY 2022. During the temporary lapse in funding, Rural Development – Rural Housing Service (RHS) will issue Conditional Commitments (Form RD 3555-18/18E) “subject to the availability of commitment authority” for purchase and refinance transactions. The issued Conditional Commitment will include the following:“Funds are not presently available for this Conditional Commitment. The Rural Development-Rural Housing Service (RHS) obligation under this Conditional Commitment is contingent upon the availability of an appropriation from which payment for contract purposes can be made. No legal liability on the part of RHS for any payment on this Conditional Commitment may arise until funds are made available to RHS for this Conditional Commitment and until the Lender receives notice of such availability, to be confirmed in writing by RHS.  More specifically, this Conditional Commitment is subject to RHS receiving sufficient funds (in the Program Funds Control System for the Single Family Housing Guaranteed Loan Program for the Type of Assistance and State of application submission) to fund this and all prior eligible outstanding applications in their entirety in the time and date order received. When such funds become available, RHS will notify the lender, and the guarantee process will continue subject to all applicable Agency regulations and conditions set forth in this Conditional Commitment. RHS will not reserve loan funds for applications in process during this timeframe. Lenders may close the loan as scheduled. The lender will assume all risk of loss for the loan until RHS obligates funds and the Loan Note Guarantee is subsequently issued. When the lender requests the Loan Note Guarantee, the lender must certify to the Agency, using the process provided in this commitment, that there have been no adverse changes to the borrower’s financial condition since the date the Conditional Commitment was issued by the Agency. The lender will submit the appropriate guarantee fee at the time they request the Loan Note Guarantee. The loan will be subject to an annual fee of 0.35 percent over the average scheduled unpaid principal balance of the loan. The Agency will not be able to issue the Loan Note Guarantee until these conditions are met and funding is obligated.”The application processing workflow is as follows:Rural Development will continue to accept complete guaranteed loan applications for purchase and refinance loan transactions from approved lenders;Rural Development will process, approve, and issue Conditional Commitments for those applications that are eligible “subject to the availability of commitment authority”;Lenders may close loans as scheduled;When funds become available, Rural Development will utilize the Electronic Customer File (ECF) system to advance the file to “Obligate Application” for Conditional Commitments that were issued for loans subject to the availability of commitment authority;Once loans are obligated, Rural Development may process lender’s Loan Note Guarantee requests when the loan closing is verified, and all conditions of the Conditional Commitment are satisfied;Lenders assume all loss default risk for the loan until Rural Development is able to obligate the loan and issue the Loan Note Guarantee.  Thank you for your participation in the USDA Single Family Housing Guaranteed Program. We look forward to serving you in FY 2022!

Effective on 9/18/21, Fannie Mae announced that their Automated Underwriting System will now take an AVERAGE of the two scores for qualifying


Effective on 9/18/21, Fannie Mae announced that their Automated Underwriting System will now take an AVERAGE of the two scores for qualifying https://kyfirsttimehomebuyer.wordpress.com/2021/08/18/effective-on-9-18-21-fannie-mae-announced-that-their-automated-underwriting-system-will-now-take-an-average-of-the-two-scores-for-qualifying/ via
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Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans's avatar

Effective on 9/18/21, Fannie Mae announced that their Automated Underwriting System will now take an AVERAGE of the two scores for qualifying https://kyfirsttimehomebuyer.wordpress.com/2021/08/18/effective-on-9-18-21-fannie-mae-announced-that-their-automated-underwriting-system-will-now-take-an-average-of-the-two-scores-for-qualifying/ via @kentuckyloan #creditscore #ficoscore #mortgage #homeloan #mortgagebroker

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Kentucky USDA Rural Housing Changes for Below


USDA Advance Copy Notice HB-1-3555 Chapter 11
USDA has announced that Chapter 11 of the HB-1-3555 will be updated and an advanced copy has been provided.  Changes will become effective after USDA issues a Special Procedure Notice.

  • Clarification was added that revolving accounts with no outstanding balance are not required to be closed.
  • USDA eliminated guidelines provided that a retained property that has been rented for 24 months or longer may be omitted from the DTI, and
  • Added guidance that the income received from rents may only be included in the repayment calculation if the property has been rented for 24 mo. or more.
  • Guidelines were added that monthly payment for borrowers in debt management plans must be included in the DTI.
  • The calculation guidelines for Non-Fixed Student Loan Payments were updated removing the requirement for the greater of calculation to be used and added guidance for when the payment amount is zero.
  • Additional guidance was added that compensating factors supporting Debt Ratio Waivers for manually underwritten loans must be documented.
  • Clarification was added that federal, state and local taxes don’t need to be included in the DTI unless there is a payment plan in place.

Refer to the Advance Copy Notice HB-1-3555 Chapter 11 and Chapter 11: Ratio Analysis

USDA Mortgage Benefits for First Time Buyers in Kentucky


Kentucky USDA Mortgage Benefits for First Time Buyers in Kentucky

100% mortgage financing at competitive fixed interest rates with USDA home loans  Credit score requirements (620 to 640)  are less restrictive than most conventional home loan programs.

Kentucky USDA loans also offer a single upfront mortgage insurance premium which may be financed. Currently only 1% of the loan and a monthly mi premium of .35% which is very cheap considering the lower credit score requirements and no money down financing. The mortgage insurance is the same for everyone, does not matter what your credit score is or how much down payment you have.

You can look up individual properties on USDA’s website here for Kentucky eligible areas.

You can also research single family housing income eligibility for Kentucky  here.

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You may qualify if your Chapter 7 bankruptcy was discharged three years prior.

USDA loans can be used to finance most types of single family properties although some exception may apply. Homes must be used as borrowers’ primary residences and not used as second homes or rental properties.

Farms and commercial properties are not eligible through USDA Rural Housing Development Guaranteed Loans.

In many cases USDA permits sellers to contribute borrowers’ closing costs and can be financed up to the appraised value if home appraises for more.

Here are the highlights of USDA Mortgages
. Down Payment: 0% down payment
 Closing Costs: up to 6%
. Credit Score: Minimum none–but lenders create overlays..typically 640 to     get  a GUS Automated approval
. Lower monthly mortgage insurance costs (PMI) versus FHA
. There is NO maximum set loan amount limit with USDA Rural Housing.
. No large savings are needed to qualify for USDA loans.
 The debt to income, or DTI is limited to 45% – lower than most other loan programs.
 The location of the home determines if it will be a USDA loan.
. The home can be a regular sale, short sale, foreclosure home or bank owned home single family, townhome or approved condo.
 Mobile/Manufactured homes and “build on your own land” not available.
. Applies for First-time home buyers, or move-up buyers.
 No special first-time buyer’s class, down payment assistance, or bond money is needed.
Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
 
American Mortgage Solutions, Inc.
 

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com