Kentucky Rural Housing Mortgage Loans Require No Money Down.
via Kentucky Rural Housing Mortgage Loans Require No Money Down.
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Income Requirements for A Kentucky Rural Housing Loan Approval.
Income Eligibility:
Income from all occupants of the household must be included as qualifying income regardless of whether or not they are obligated on the note. Income eligibility can be determined from the following USDA web site. Final eligibility must still be determined by USDA
When a borrower has a rental property it must also be included in the eligibility calculation.
- Positive net rental income is included in the eligibility income for the household
- Negative net rental income is counted as zero for eligibility income
Qualifying Income:
The underwriter is responsible for calculating income and approving the loan. Applicants with commission only position’s, or varying amounts of overtime and bonus income may not exhibit enough stable monthly income to qualify. Typically, income of less than 24 months duration should not be included in qualifying income.
- Salaried Borrowers
- Pay-stubs covering most recent 30 day period, W-2’s for the previous two years and telephone verification of employment performed by Freedom Mortgage (paystub must show at least 30 days of year-to-date earnings).
- If overtime, commission, or bonus income is used for qualifying purposes the file must be documented with a two year history of receipt and be expected to continue.
- Standard VOE, sent directly to the employer, along with the borrower’s most recent paystub.
- Self-Employed Borrowers
- Copies of the borrower’s signed individual Federal tax returns that were filed with the IRS for the most recent two years. As an alternative, the Freedom may obtain IRS-issued transcripts of the borrower’s tax returns, as long as the transcripts include the information from all of the applicable schedules. The tax return documentation should be complete and include all appropriate schedules.
- The self-employed applicant also should submit current documentation of the business’s income and expenses, including any applicable Federal tax returns that were filed with the IRS for the most recent two years as well as year-to-date profit and loss and balance statements.
- Rental Income
- Rental income may only be counted for repayment income if the lease has been in place for at least two years. For leases older than two years, count positive net rental income in repayment income and negative net rental income as debt. If rental income is not received for a full two year period then the full PITIA must be used in the debt to income calculation.
- Rental income calculation – reduce monthly gross income by a 25% vacancy rate, and then the monthly PITI, HOA dues, etc. are subtracted. If positive then include in income if negative include in DTI.
All other income sources refer to USDA guidelines for all income guidelines and documentation requirements
Assets:
- Assets are not required; however, any assets disclosed must be supported with appropriate documentation
- Satisfactory explanation and documentation should be provided for large deposits or increases in liquid assets
- Cash on hand is not acceptable
- Bank accounts require Verification of Deposit with average 2 month balance, or 2 consecutive months statements dated within 45 days of loan application
- Earnest money deposit may be considered an asset if deposit is not already reflected in liquid assets
- Asset amount of retirement accounts is 60% of the vested account balance
- Gifts must be documented through gift donor letter and establish that gift does not have to be repaid
- For sale proceeds of real property, provide HUD-1 or equivalent closing statement to indicate the actual amount of cash proceeds realized by the borrower
- Stocks and bonds must be documented by a statement provide by stockbroker or financial institution managing the portfolio
- Households with net family assets of greater than $5,000 require that the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate be considered when calculating income.
How do Students Loans affect a Kentucky Rural Housing Mortgage Loan Approval?
Kentucky USDA Rural Housing Guidelines for Student Loans:
Now offering Kentucky Rural RHS USDA loans
We are excited to offer you Kentucky RD USDA loans as our new product offering.
Product Highlights:
620+ FICO
102% LTV including the Guarantee Fee
Max DTI and minimum reserves determined by GUS
Owner Occupied, 1 unit properties only
Up to 6% Seller Concessions allowed
Kentucky Student loans that are currently in repayment must have documentation to verify the current payment due (e.g. letter from a loan servicer, online account verifications, or other official written documentation). The credit report alone is not acceptable documentation. Verifications are valid for 120 days, 180 days for new construction. A fixed loan payment will not adjust over the repayment term. The payment listed on the documentation may be used for debt ratios.
Graduated repayment plans typically start with low payments and then adjust every 12 months or more. Regardless of when payment adjustments occur, lenders must utilize the highest payment documented on the repayment plan agreement in debt ratios.
Deferred student loans that are not in repayment status may use an estimated payment of 1% of the loan balance reflected on the credit report, or a verified fixed payment provided by the loan servicer to document the payment that will be due once deferment ends.
Kentucky Student loans with Income Based Repayment (IBR) plans of $0 are not eligible to be used in the debt ratio. The borrower must provide documentation of the IBR payment plan from the loan servicer. The following apply:
- If the IBR payment is less than $100 and 1 percent of the total loan balance is more than $100, a minimum payment of $100 must be included in the debt ratios.
- If the IBR payment is less than $100 and 1 percent of the total loan balance is less than $100, a minimum payment of 1% of the loan balance must be included in the debt ratios.
- If the current IBR payment is over $100, use that payment amount in the debt ratios.
Joel Lobb
Senior Loan Officer
Senior Loan Officer
(NMLS#57916)
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
phone: (502) 905-3708
Fax: (502) 327-9119
Company ID #1364 | MB73346
Groups Oppose Rural Development Cuts
Groups Oppose Rural Development Cuts.
Chairman of the House Appropriations Committee, Rep. Hal Rogers (R-KY), have voiced similar concerns about the president’s budget. At a committee hearing earlier this month, Rogers claimed the proposed reductions demonstrate USDA’s “lack of respect for our rural communities and the constituents who have made these programs successful.”
Rogers cited NRHC members Kentucky Highlands Investment Corporation, Frontier Housing and the Federation of Appalachian Housing Enterprises (FAHE) as effective and successful organizations that have used USDA’s Self-Help Housing and Section 502 Direct Loan programs to help low-income, working families become homeowners.
Chairman Rogers voiced concern about how the president’s proposed cuts would affect families who benefit from these programs. For example, Rogers highlighted the story of a woman who had been the victim of extreme domestic abuse who called Kentucky Highlands hoping to find a home for herself and her young daughter. With some financial counseling and guidance from Kentucky Highlands, she was approved for a $66,000 Section 502 Direct Loan. And with the Self-Help Housing program, she was able to build her own home for about $35,000 less than it would have cost to hire a contractor. That means that today, she is living in a home that she can afford that she built with her own hands.
USDA has reported that this program has helped the agency save $1.5 million to date. “Because of this demonstration program, one of my constituents and his family were able to secure a 502 Direct Loan in half the time it normally takes for USDA to process the loans themselves. And because of that loan, he now lives in a new, energy-efficient, green home in Rowan County (Kentucky),” commented Rogers.
Section 502 Direct Homeownership Loans provide fixed-rate mortgages – with up to 38-year terms and subsidized interest rates as low as just one percent – to help low-income rural families gain access to clean, decent and affordable housing.
—
Joel Lobb
Senior Loan Officer
Senior Loan Officer
(NMLS#57916)
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
phone: (502) 905-3708
Fax: (502) 327-9119
Company ID #1364 | MB73346
Kentucky USDA Rural Development Guaranteed Housing Loan Income Worksheet for 2014
KENTUCKY RURAL HOUSING INCOME ELIGIBILITY CALCULATION WORKSHEET
Kentucky USDA Rural Development Guaranteed Housing Loan
USDA Rural Development Guaranteed Housing Loan
Borrower/s ____________________________________________________________
Date of Calculation__________ Total # household members = _________
State:_________________________ County:______________________________
List all non-exempt household income: (Per §1980.347)
Name of household member receiving the income
Source of income Monthly income from source
(Actual or Average)
X12
Annual income
from source
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
_________________________________________$___________ X12 $___________
Total Gross Household Income $______________ X12 $______________
Total Monthly Total Annual
Deductions from Annual Income: (Per § 1980.348) (Use when gross income is above income limit):
(1) Number of Minors living in household: ___X $480.00 (Under age 18) $_____________
(2) Number of Disabled/Handicapped Adults:___ X $480.00 (18 or over& NOT borrowers) $_____________
(3) Number of full time adult students: ____ X $480.00 (18 or over& NOT borrowers) $_____________
(4) Elderly Family: (borrower or co-borrower over 62) One time deduction of $400.00 $_____________
(5) Annual Child Care Expense $_____________
(6) Medical expenses (Elderly family only. Un-reimbursed >3% gross annual income) $_____________
TOTAL Annual Deductions (Sum of Line 1 thru Line 6) $_____________
Adjusted Gross Annual Household Income (Gross income less deductions) $____________
ADJUSTED COUNTY HOUSEHOLD INCOME LIMIT per Rural Development $____________
Kentucky USDA and Rural Housing Income limits are available at:
http://www.rurdev.usda.gov/SupportDocuments/KY%20GRH.pdf
DEDUCTIONS FOR CALCULATING ADJUSTED FAMILY INCOME
Deductions From
Annual Income Deduct For: Do Not Deduct For:__________________________________
$480 for each (A) Minors (under 18 years of age) Applicant/Borrower, Spouse, Foster Children, or member of the Children of Non-family members.
family residing in the household. (B) Adults (18 years of age or older) Applicant/Borrower, Spouse or Non-family members.
(C) Adults (18 years of age or older) Applicant/Borrower, Spouse or Non-family members.
who are full-time students.
______________________________________________________________________________________________________
$400 for elderly (D) Head, Spouse or Sole Member who family. is a senior citizen, disabled or handicapped and is the applicant/
borrower.
(E) Two or more unrelated senior Family, if one or more of those living in the house-
citizens, disabled or handicapped hold is not a senior citizen, disabled or handicapped.
persons living together, at least one
is the applicant/borrower.
(F) Survivors of deceased FmHA senior Survivors after remarriage of the deceased borrowers citizen, disabled or handicapped spouse. borrower who occupied the dwelling
at the time of the borrower’s death.
______________________________________________________________________________________________________
Care of minors 12 years (G) Anticipated expenses to be paid for (a) Amount paid in excess of amount received from of age or foster children care of member of the family to be such employment. or children of non-family gainfully employed. (b) Payments made to dependents of the applicant/ members. borrower.
(H) Anticipated expenses paid for care of
minor(s) to enable a member of the Payments made to dependents of the applicant/
family to further his/her education. borrower.
______________________________________________________________________________________________________
Aggregate medical (I) Planned general medical and dental Accumulated bills in excess of planned payments for expenses of the house- expenses of an elderly family for the ensuing 12 months. hold in excess of 3% of ensuing 12 months which are not gross annual income. covered by insurance (eg., medicines, medical insurance premiums, costs of nursing care, payment of accumulated medical bills, and cost of full-time nursing or institutional care which cannot be provided in the home).
(J) Reasonable attendant care and auxiliary Cost already deducted for same user member of apparatus and equipment expenses to elderly family. enable any handicapped/disabled
member of a household (not just an elderly family) to be employed.
_________________________________________________
Joel Lobb
Senior Loan Officer
Senior Loan Officer
(NMLS#57916)
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
phone: (502) 905-3708
Fax: (502) 327-9119
Company ID #1364 | MB73346
Kentucky USDA Mortgage Lender for Rural Housing Loans 