Kentucky FHA loans vs Kentucky USDA Loans for Kentucky Home buyers.

Criteria	Loan Type
	FHA	USDA
Down Payment	3.5%	0% – None
PMI	.85%	0.35%
Funding Fee *	1.75	1.0
Limits (loan)	Per County	None
Limits (income)	None	YES -per county,etc
Restricted location	None	YES
Credit score	580 down to 3.5% 500 score with 10% down payment	no minimum score

There are a few other points that put the Kentucky USDA loan at an advantage over the Kentucky FHA mortgage program such as the appraisal value. USDA appraisal value is normally higher than the selling price. If the appraisal value is more than the purchase price, this becomes an additional advantage for borrowers as the USDA will permit you to roll in closing costs.

Essentially the only issues that could be considered as drawbacks of the USDA loan are the restriction of location and the USDA RD income limits. The location must be in a designated rural area with a total population of 20,000. This can be a setback for those who do not want to drive farther to get to work in the city. But buyers should check their location in detail, please click here for the USDA housing map. Many populated locations just outside of the big cities are USDA rural housing approved - locations just outside of Louisville, Ky, Lexington Kentucky, and Northern Kentucky Counties..

Additionally, the USDA ‘s income limit imposed on would-be borrowers is currently set at 115% of the median or average income of the area where your home is to be situated. That means for those who have a higher income than the average in town would have to opt for mortgage loans under the FHA or through a conventional lender if they so decide to live in a rural area.

Regarding the rates as well as the guidelines in qualifying potential borrowers, the FHA and USDA are just about equally matched, and they are currently at historic low rates. However, the USDA, unlike the FHA, allows borrowers to finance the whole purchase price and include any closing expenses as well into the loan.

Lastly, all USDA guaranteed loans have a 30-year fixed rate term. This can be very advantageous mainly when the homeowner eventually starts earning more than the required 115% median, the rate is fixed and even after 10 years only, will practically be insignificant compared to other monthly expenses at this time.

The funding fee in both governments backed programs are incorporated (rolled into) into the overall loan.

Apply for FREE Below for your Kentucky FHA Mortgage loan or USDA Loan:

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

http://mylouisvillekentuckymortgage.com 

Fill out my form!

Low and no money down home loans - wave3.com-Louisville News, Weather & Sports

Low and no money down home loans - wave3.com-Louisville News, Weather & Sports

LOUISVILLE, KY (WAVE)- Springtime is always a popular time to house hunt and potential buyers often don't need much when it comes to a down payment.   A recent survey by Lending Tree finds the average money down is just over 12% which means a lot of people are putting down far less.

Thanks to government loans and programs, low or even no-money down mortgages are not just possible, they're plentiful and many people are surprised to find they qualify.

Of course, VA is out if you're not a veteran or a veteran's widow, but two other government funded loan programs are viable options, turning paychecks into the property.

As 23 year old Lacey Lamon shows our WAVE TV camera around her new home, she giggles with pride, pointing out the 2 car garage, the landscaping and once inside, the stainless steel appliances.

"I've had a ton of people asking me, 'where did you get the money to put down a down payment?', and once I tell them I didn't have to they're just really surprised."

Lacey's loan officer at Citizens Union Bank in Shelbyville, Nathan Poole agrees that many are shocked to find out the types of mortgages available that don't require the traditional 20% down.

"There's a lot of good home buyers out there" said Poole, "that just don't have the traditional 20% down for a conventional loan."

He's helped countless people like Lacey own a home using government loans.  "It's just a matter of meeting guidelines.  The debt to income ratio" Poole said.
For both the popular FHA and the lesser known USDA Rural Housing Service (RHS) loans, the borrower must have a credit score of 640.

FHA loans require at least 3 1/2% down, and there's a loan limit just over $300,000.  For USDA's RHS loans, there's an income limit that's not much higher than the average income in the area of the home.  And the home must be in a qualifying area.  Jefferson County homes do not qualify for RHS loans, but homes in all of Shelby, Oldham and Spencer Counties and in pockets of Bullitt County do qualify

Poole crunched the numbers on both loan types for Lacey and "the RHS just seemed like the best fit" she said.

With no money down and the lowest monthly payment.  Poole says between the two option, RHS is often the way to go.

All low or no down payment loans come with a price called PMI, a Private Mortgage Insurance that the lender charges so that the buyer can get the loan without that 20% down.

The PMI is more costly up front on an RHS loan, but Poole says the monthly premium added in on the FHA loan is much higher and in the end will cost more.

"Couple that with the fact, you don't have to make a down payment and 99 out of 100 times the RHS deal is better than the FHA deal" Poole said.

Low or no money down mortgage options are a surprising welcome mat to lots of potential home buyers often giving people the key to home affordability.

Another low  money down option is a conventional loan with as little as 5-percent down, but if your credit score is below 740 you'll get penalized with a higher interest rate and you'll pay PMI with this too.

Some other guidelines apply with these loans, like a buyer can't own a home while getting a USDA RHS loan, but if you sell your home, then you may qualify for the loan.

If you're in the market, it may be worth the time to crunch the numbers if you qualify.