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Kentucky USDA RHS Rural Housing Mortgage Loans for 2020






Kentucky USDA RHS Rural Housing Mortgage Loans for 2020
Kentucky USDA Rural Program Guidelines



Borrower Eligibility




U.S. citizens




Permanent resident aliens




First time homebuyers allowed




Maximum 2 borrowers allowed




Non-occupant co-borrowers NOT allowed




Commitment Fee




USDA Rural Developmet charges a 1% Commitment Fee




Commitment Fee can be financed into the loan




Example:






Purchase price – $100,000




Loan amount – $101,040




Commitment Fee – $1,000




Maximum financed loan amount = $101,040 ($100,000 [purchase price]/.98)




This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA



Downpayment Requirement




No down payment is required




If borrower has adequate assets (i.e. 20% of the property purchase price) to obtain conventional financing the borrower may be ineligible for the USDA Rural Development Loan




Eligible Properties




Must be in an eligible Kentucky USDA Rural Development Location




Owner-occupied properties




Existing attached & detached single family residences




New construction with permanent financing only




PUD’s (i.e. Townhomes)




Condo-units. HUD, VA, FNMA or FHLMC approved project




Ineligible Properties




Co-ops




Mixed-use




Condotels




Manufactured homes




Log cabin homes




Single Family Homes where the Land value exceeds 30% of the appraised value AND can be sub divided.




Maximum Income Amount




County specific. Reference the USDA website for adjusted household income limits




Maximum Loan-To-Value




Maximum loan-to-value is 101%




Maximum Mortgage Amount




None




Minimum Credit Score




Middle Credit Score – 581 for each applicant for GUS automated underwriting approval







Monthly Mortgage Insurance Premium (MIP) Requirements




.35 basis points USDA Loan require a monthly mortgage insurance premium. For example on a $100,000.00 it would be $ a month 29.16




Multiple Property Ownership




Kentucky USDA Rural Development often won’t allow applicants to own other properties




Exceptions include when the other property owned is:






Not owned in the local commuting area as the new property; or




Not structurally sound and/or functionally adequate




Manufactured home not on permanent foundation




This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA



Occupancy Type




Owner occupied only




Qualifying Ratios




29/41% debt-to-income (DTI) – Target




Higher dti allowed on Gus Approvals or With compensating factors such as:






680 or higher credit score




No or low “payment shock” – less than a 100% increase in proposed mortgage payment Vs. current rental housing expenses




Fiscally sound use of credit




Ability to accumulate savings




Stable employment history with 2 or more in current position or continuous employment history with no job gaps




Cash reserves available for use after settlement




Career advancement as indicated by job training or additional education in the applicants profession




Trailing spouse income – as a result of a job transfer, the house is being purchased, prior to the secondary wage-earner obtaining employment. If the secondary wage-earner has an established history of employment and has a reasonable chance to obtain new employment in the area




Low total debt





Seller Contribution




Unlimited Contribution towards closing costs, prepaids, discount points, buydown fees, and upfront Commitment Fee




Transaction Types




Purchase




Rate/Term Refinance on existing USDA loan