First Time Home Buyer Grants Kentucky
New Income and Purchase Price Limits
Kentucky Housing Corporation (KHC) is announcing new income and purchase price limits for Secondary Market products and KHC's Homebuyer Tax Credit. Things to know:
- New limits begin with new reservations on or after May 1, 2021.
- Most county income limits decreased, with a few exceptions. Be sure to check the income limits for the counties you serve.
For Secondary Market products, the purchase price will increase to $346,644. For the Homebuyer Tax Credit, the purchase price will increase to $311,997. KHC's program guides on AllRegs will be updated Saturday, May 1, 2021.
Refer to Down Payment Assistance Programs Grid -- PDF
- Only homebuyers receiving a first mortgage through KHC are eligible for DAP.
- All DAP loans take a lien position.
- Show as subordinate financing in AUS.
- KHC DAPs are not gifts or grants.
- Regular and Affordable DAP are continuously funded and do not run out of monies.
- Borrowers under the Secondary Market income and purchase price limits are eligible for Regular DAP. Refer to Secondary Market Gross Annual Applicant’s Income Limit Grid -- PDF
- For borrowers to qualify for the Affordable DAP, they must be under the Affordable DAP income limits. Refer to Affordable DAP Gross Annual Applicant’s Income Limit Grid -- PDF
- KHC will only subordinate a DAP when the first mortgage is coming back through KHC. Refer to KHC’s Subordination Request Form -- PDF
Lender can also refer to the DAP Quick Reference Card – PDF for more information.
Conventional
Refer to Conventional First Mortgage Programs Grid – PDF
Mortgage Insurance with Conventional Preferred Program
- Charter coverage with HFA Preferred Program.
- Standard Coverage with Preferred Plus 80.
- KHC will order all MI certificates for TPO Lenders
- TPO Lenders can choose the MI company when making a loan reservation.
- Delegated/Correspondent Lender will order their own MI certificates.
- Provide final MI certificate.
- Listed below are the MI Companies and the portal names to access the conventional Preferred program.
- Arch MI.
- Essent.
- Genworth: Simply Underwrite.
- MGIC: MGIC Go.
- Radian: One Underwrite.
- UG.
- Borrower must meet both KHC and MI company guidelines.
- Lender has the option of a Single Pay Upfront option.
- Paid by the borrower or the lender.
- Mortgage insurance on HFA Preferred and Preferred Plus 80 with Manufactured Housing.
- MGIC and Genworth allow 95% LTV / 105%CLTV.
- ARCH, UG and Radian allow 95% LTV / 95%CLTV.
- Essent is not insuring Manufactured Housing.
Lender can also refer to the First Mortgage Program Quick Reference Card – PDF for more information.
Delegated/Correspondent Lenders Conventional Fannie Mae Requirements
- Lender must comply with all Fannie Mae requirements for origination, processing, underwriting, pre-funding review, closing and post-closing.
- Any significant pre-funding findings must be reported to KHC within 30 days.
- KHC will purchase a High Price Mortgage Loan (HPML).
- Lender will verify employment on all borrowers within 10 business days prior to the note date.
- Lender will upload appraisal to the Uniform Collateral Data Portal (UCDP) system.
- Lender will complete the submission to Uniform Closing Dataset (UCD) and proved a copy of successful UCD Findings Report in the Closed Loan File uploaded to KHC for loan purchase.
TPO Lenders Conventional Fannie Mae Requirements
- Lender will verify employment on all borrowers within 10 business days prior to the note date.
- KHC will upload appraisal to the Uniform Collateral Data Portal (UCDP) system and complete the submission to Uniform Closing Dataset (UCD).
Government
Refer to Government First Mortgage Programs Grid-- PDF
Refer to FHA Refinance Programs Grid -- PDF
Refer to RHS Streamlined-Assist Refinance Program Grid—PDF
Refer to VA Programs Grid - PDF
Eligibility
- Must be a U.S. citizen or have legal status to be in the U.S. Refer to specific agency guidelines.
- KHC does not allow non-occupying co-borrowers or co-signors.
- Applicant’s gross annual income must be at or below Secondary Market Income Limits (compliance income) per county location of the property.
- Refer to Secondary Market Gross Annual Applicant’s Income Limit Grid – PDF
Compliance Income Limits
- Compliance income is the gross annual income with the sum of the total anticipated income from all sources received by the applicant(s) during the 12-month period commencing with the date of initial occupancy (closing).
- The following should be counted in compliance income: Base pay, overtime, bonuses, commission, child support/alimony, profit sharing, tip income, non-taxable income (SSI, Disability), car allowances, and schedule C or E income.
- Non-borrowing occupant’s income is not considered in compliance income.
- Use KHC’s Income Calculator on KHC’s website (under Lender Resource /Calculator tab) to determine compliance income.
- This calculator is required on all loan submissions.
Effective Income
- Effective Income is qualifying income. This includes income from the applicant(s) that is considered stable (continuing for at least three years) and is used to calculate debt ratios.
Insuring Agency Credit Standards
- KHC follows the federal insuring agency guidelines. KHC requires all lenders to comply with the general Ability-To-Repay (ATR) standards and consider DTI in making reasonable, good faith determinations that the consumer has the ability to repay the loan. KHC has specific credit standards and maximum ratio requirements listed down below.
Minimum Credit Score
- 620 minimum credit score required on all government first mortgage programs (FHA, VA, and RHS).
- 660 minimum credit score required on Conventional HFA Preferred first mortgage programs.
Automated Underwriting System (AUS)
- FHA accepts AUS Approval through Desktop Underwriter (DU) and Loan Prospector (LP) or a manual underwrite per HUD guidelines.
- Manual Underwriting still requires a minimum 620 credit score and a VOR or LOE regarding not paying rent.
- Refer to the KHC’s FHA Manual Underwrite Matrix - PDF
- VA accepts an AUS Approval thru Desktop Underwriter (DU) and Loan Prospector (LP) or a manual underwrite per VA guidelines.
- RHS allows for a manual underwrite if lender is unable to get and AUS approval through Government Underwriting System (GUS).
- 29/41% maximum debt ratios for manual underwriting without GUS approval for RHS.
- Conventional HFA Preferred and Preferred Plus 80 programs require a DU approve/eligible.
- LP is not accepted on these conventional programs.
- FHA Rate Term Refinance requires an AUS approval (DU or LP).
- FHA Streamline and Simple Refinance – do not run AUS.
- RHS Streamlined-Assist Refinance Program – do not run GUS.
- For all KHC’s DAPs, the second mortgage amount is shown as subordinate financing.
Maximum Debt Ratios
- All loan programs can go up to 40/50% with AUS approval.
- Judgements, collections, bankruptcy, charge-offs, short sales, and foreclosures follow insuring agency guidelines.
Age of Credit Documents
- Maximum age for government first mortgage credit documentation is 120 days.
- Maximum age for conventional first mortgage credit documentation is 4 months.
IRS Form 4506-T
- Required to be executed by the borrower at the time of application or closing.