DEFERRED STUDENT LOANS AND DEBT RATIO CALCULATIONS for Kentucky Rural Housing Loans and USDA Loans in KY
RHS Student Loan DTIs
Due to the variable nature of some student loan plans, RHS is standardizing the process of including them in the debt ratio. All student loans will now require documentation verifying the current payment due.
For student loans which are Conventional, Fixed Payment, and/or Deferred:
- Account statements will be reviewed and fixed monthly payment will be used with no adjustments.
- Deferred student loans not in repayment will use an estimated payment of 1% of the loan balance unless a documented fixed payment from the loan servicer can be provided.
For student loans with Income Based Repayment plans:
- If the current payment is greater than $100, that payment can be used.
- If the current payment is less than $100 and total loan balance is greater than $10,000, a minimum $100 payment must be included in the debt ratio.
- If the current payment is less than $100 and total loan balance is less than $10,000, then the current payment may be used
Please note that documentation of an Income Based Repayment agreement must be provided. Payments of $0 are not eligible to be used in the debt ratio. Verifications are only valid for 120 days, 180 days for new constructions
DEFERRED STUDENT LOANS AND DEBT RATIO CALCULATIONS
. A 100% 30 year fixed interest rate loan with flexible credit and qualifying ratios along with other benefits, will open the door to a new market and new growth possibilities.
We look forward to a long and productive relationship this affordable housing product to the people of Kentucky and to a strong partnership in the Kentucky GRH Program.
For the USDA Rural Development Single Family Housing Guaranteed Loan Program, deferred student loans should be included in the debt ratio calculations for Guaranteed Loans regardless of the deferment period.
Rural Development RD Instruction 1980-D, section 1980.345(c)(1) states:
“Long term obligations include those obligations . . . with a remaining repayment period of more than 6 months and other shorter term debts that are considered to have a significant impact on repayment ability.”
Deferred student loans are long term obligations with remaining repayment periods of more than 6 months, and they must be included as part of the
applicant‟s recurring monthly debt obligations. If the credit report does not reflect a monthly payment due at the end of the deferment period, the lender may request a copy of the applicant‟s payment letter, or utilize the industry standard of estimating student loan payments as 1% of the loan balance. Therefore a deferred student loan balance of $12,000 should have a corresponding monthly payment of $120 if no estimated payment is verified by the lender.
This guidance applies to all manually
DEFERRED STUDENT LOANS AND DEBT RATIO CALCULATIONS Kentucky Rural Housing Loans and USDA Loans in KY
- Louisville Kentucky FHA Mortgage Loans (kentuckyfhaloan.wordpress.com)
- 4 Things Needed to Get Approved for a Mortgage Loan In Kentucky (louisvillekymortgage.net)
- >4 Things Every Borrower Needs to Get Approved for a Mortgage or Home Loan In Kentucky (louisvillemortgagerates.wordpress.com)
- Ky Va home loans info (kentuckyvaloan.wordpress.com)
- Kentucky Rural Development Kentucky Guaranteed Housing (kentuckyusdaloan.wordpress.com)
- What is the CSRA USDA Guaranteed Rural Housing Loan Program? (augustagahomehunter.com)
- Grant Opportunity: Rural Economic Development Loan and Grant Program (thegrantcoaches.com)
- USDA Loans – Get Them in PWC While You Still Can (themorrisrealtyteam.wordpress.com)
- Who You Gonna Call? – USDA Warns Wisconsin (tammybruce.com)
- Owensboro, Kentucky VA Home Loans (louisvillemortgagepro.tumblr.com)
October 2012 Kentucky USDA and Rural Housing Loans Changes for Property Eligibility Locations in Kentucky.
October 1, 2012 over 900 communities across the USA will lose their eligibility for 100% USDA Rural Housing loans including cities in Kentucky that where once eligible. If you know of buyers looking in these communities they need to act now. They should probably be under contract by end of August to be safe. There is no indication this expiration will be delayed. See the cities below that will be no longer eligible come 10/1/2012 for a Rural Housing USDA Loan in Kentucky
Bardstown, KY, Nelson County
Burlington, KY, Boone County
Elizabethtown, KY, Hardin County
Georgetown, KY, Scott County
Independence, KY, Kenton County
Nicholasville , KY, Jessamine County
Shelbyville, KY , Shelby County
Shepherdsville. KY , Bullitt County
To see an eligible Kentucky Map for Kentucky USDA Mortgage Loans for Rural Housing Mortgages in Kentucky Please clink the following link below:
Senior Loan Officer
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*