USDA RURAL DEVELOPMENT RURAL HOUSING LOAN IN KENTUCKY

More info below about Kentucky Rural Development Loans

https://www.mylouisvillekentuckymortgage.com/p/a-kentucky-usda-home-loan-is-zero.html

Kentucky Rural Housing USDA Home Loan Frequently Asked Questions 

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: USDA Rural Housing Kentucky Loan Information

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: USDA Rural Housing Kentucky Loan Information: A Kentucky USDA home loan is a zero-dollar-down mortgage option provided by USDA’s Department of Rural Development. This government-...

Kentucky USDA Rural Development Loans Program Guidelines

Loan Purpose of Kentucky Rural Housing Loans

• Purchase
• One-time Close Construction Loan (very few lenders do this)
• Rate-term refinance for existing USDA Loans Only. Cannot refinance a Conventional loan, FHA, VA, or other loans into an USDA loan. 
• 
  

Credit Profile for a Kentucky Rural Housing Buyer

• 581 minimum middle credit score for all borrowers on the loan – purchase
• No score allowed with alternative trade lines
• Most Kentucky USDA lenders will want a 620 or 640 score or higher. A 640 middle score is required for a USDA loan through GUS, the automated underwriting system used by rural development to determine the max lending limits for a loan. 
• No foreclosure, short sale, or Chapter 7 bankruptcy discharge within three years of contract ratification date on credit report not permitted
• Minimum of two tradelines on credit, with a positive pay history within the most recent 12-month period. Accounts can be open or closed
• If two tradelines aren’t on credit, alternative tradelines can be
• No mortgage delinquency in the last 12 months for a USDA-to-USDA Refinance
• 
  

Loan Amount limits for USDA loans in Kentucky. 

• No maximum loan amounts. A lot of borrowers think they're max limits on this because there is max limits on total household income by county in Kentucky, but there actually is no limit as long as the borrower gets approved on the ability to repay the loan. 

• 
  

Mortgage Insurance Requirements and Premiums for USDA Loans:  

• USDA charges a 1% Commitment Fee that is financed into the loan. Not paid out of pocket but can be
• Commitment Fee can be financed into the loan 
  Example: 
  Purchase price - $100,000 
  Base Loan amount - $100,000 
  Commitment Fee - $1,010 ($100,000 [purchase price] /.99 - 100,000) 
  Maximum financed loan amount = $101,010
• USDA requires a monthly Annual Fee (i.e. mortgage insurance premium) with an annual factorial of .35%
• This is much lower than FHA's upfront 1.75% and the monthly mi of .85% so keep that in mind.

• 
  

Ratios for USDA Loan Approval in Kentucky

• 33.99/45.99% (DTI) with GUS Accept/Eligible underwriting findings
• 29/41% debt-to-income (DTI) with GUS Accept/Refer underwriting findings and credit score less than 679
• 31.99/42.99 with GUS Accept/Refer underwriting findings and credit score greater than 680 and 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 load
• 
  

Property Type for USDA Loan Approval in Kentucky

• Must be located in an eligible USDA Rural Development Location
• Owner-occupied properties---no rental properties or second homes
• Existing attached and detached single-family residences
• New construction with permanent financing only
• PUD's (i.e. Townhomes)
• Condo-units. HUD, VA, FNMA or FHLMC approved project
• Log cabin homes, provided Appraisal Report lists other comparable log cabin homes that have recently sold in the area
• No used or old mobile homes allowed. Only allows new mobile homes from dealer setup on land with mobile home land package deal...Kentucky only. ..

Documentation for loan approval on income/job history for a Kentucky Rural Housing Loan: 

• All loans must be fully documented per Agency Guidelines. USDA likes to see a 2 year job history with stable employment. Does not have to be same employer, just a contiguous 2 year work history with no gaps over 30 days. 
• If recently graduated form college, sometimes they will waive the 2 year job history rule if show transcripts and be on your job for 6-12 months. Case by case here. 
• For Self Employed borrowers, in addition to Agency Guidelines, two years of the tax returns (personal and business) along with a year-to-date profit and loss (unaudited)
• If overtime or bonus income or second job is used to qualify, you can take a 2 year avg and as long as stable and not decreasing, you can usually this income to qualify. 
• They usually will take your base gross income to qualify you on the mortgage loan. They don't qualify you off your net income.

Down Payment/Closing Costs for a USDA loan in KY

• 0% down payment required, but if you have available 20% down payment in checking or savings, they will make you use that..If the money is in a tax-deferred or 401k plan, retirement plan, they will not hold this against you. 
• Seller contribution toward buyers closing costs up to 6% of the purchase price
• Closing cost help can come from flexible sources including family member gifts and loans against a 401k retirement account
• If the appraised value of the property exceeds the purchase price, the difference can be used to cover closing costs---This is a key benefit of Kentucky USDA loans. This is the only type of loan that will allow this. 

Terms

• Amortization period: 30-year fixed rate-They do not offer any other terms. Just a 30 year fixed rate loan with no prepay penalty. 
• 
  

Existing Properties Owned

• USDA primarily 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 a permanent foundation

Kentucky USDA Rural Housing Mortgage Lender: Kentucky Rural Housing USDA Maximum Income by Coun...

Kentucky USDA Rural Housing Mortgage Lender: Kentucky Rural Housing USDA Maximum Income by Coun...: 

 2024 Kentucky USDA Loan Income Limits for Kentucky Counties  Kentucky USDA loan income limits vary by location and household size wit...

#usdaloan #mortgage #ruralhousing #usdaloan #kentuckymortgage #firstimebuyer #rhsloan

New Income limits for most counties (*) in Kentucky are $112,450 for a household family of four and household families of five or more  can make up to $148,450 with the new changes for 

2024 Kentucky USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of $112,450  for a family of four and up to $148,450 for a family of five or more. The metro area surrounding counties of Jefferson County includes Oldham, Bullitt, Spencer are included in these higher income limits for USDA loans.

Remember,  the entire  Jefferson County and Fayette County  Kentucky counties are not eligible for USDA loans. Along with parts of the following counties Daviess (Owensboro), Mccracken (Paducah), Madison County, (Richmond), Clark County (Winchester), Warren (Bowling Green), Hardin (Fort Knox and Radcliff), Bullitt(Hillview, Maryville, Zoneton, Fairdale, Brooks), Franklin, (Frankfort), Henderson (Henderson City Limits), Christian County (Hopkinsville, Fort Campbell), Boyd County (Ashland city limits) and the most Northern Parts of Boone, Kenton, Campbell Counties of Northern Kentucky (Covington, Florence, Richwood, Hebron, Ludlow, Fort Thomas, Bellevue, Ryle, Beechwood, ) 

The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Bracken, Gallatin, and Pendleton are $120,850 for a household of four or less and up to $159,150  for a family of five or more.

USDA Eligible Areas in Northern Kentucky
Burlington
Hebron
Independence
Walton
Alexandria
Highland Heights
Cold Springs
Grant County
Owen County
Pendleton County
​

USDA Income Limits
Boone, Kenton & Campbell Counties (N. KY)
​
$112,450 (family size 1-4)
$148,450  (family size 5 or more)
​

Grant, Owen & Pendleton Counties (N. KY)
​
$120,500 (family size 1-4)
$159,150  (family size 5 or more)



Most are familiar with USDA Rural Housing Loan Program  being a great no money down program available and it is not just for Kentucky first time buyers.

Kentucky USDA Rural Housing Mortgage Lender: KENTUCKY USDA MORTGAGE LOANS

Kentucky USDA Rural Housing Mortgage Lender: KENTUCKY USDA MORTGAGE LOANS:

 KENTUCKY USDA MORTGAGE LOANS KENTUCKY USDA Loans are issued by qualified lenders and are guaranteed by the United States Departme...

KENTUCKY USDA Loans are issued by qualified lenders and are guaranteed by the United States Department of Agriculture. These are not farm loans! They are intended to encourage home ownership in rural areas as defined by the USDA in Kentucky.

Here’s a quick overview of KENTUCKY MORTGAGE USDA loans:

• No down payment - a true 100% LTV Loan
• Minimum credit score of NONE . Just investors will create overlays and institute a higher minimum credit score-Be aware of this!~!!! 
• The following slides will highlight a few key credit requirements.
• • Credit requirements may vary for loans underwritten with the assistance of the GUS compared
• to those that are manually underwritten.
• • Lenders and investors may impose overlays. A common overlay is credit score requirements.
• Rural Development does not have a minimum published credit score, but many lenders do.
• • It is the lender’s responsibility to determine the creditworthiness of their applicant. In some
• cases of adverse credit, the lender’s underwriter can grant credit exceptions.
• • There are a few instances of adverse credit that a lender cannot waive which include delinquent
• non‐tax Federal debt, delinquent child support, previous USDA losses, and a CAIVRS claim
• indicating the applicant is delinquent on federal debt.

• Borrowers that do not have a credit score may be eligible with additional requirements.
• Kentucky USDA Rural Housing has a Household income limits apply.
• The base USDA income limits are for most Kentucky counties below:

  Kentucky USDA Mortgage Limits for Households with 1-4 members have different limits as households with 5-8. Similarly, applicants living in high-cost counties will have a higher income limit than those living in counties with a more average cost of living.

  The base USDA income limits are formostKentucky counties below:

  

  New Income limits for most counties (*) in Kentucky are $103,500 for a household family of four and household families of five or more can make up to $136,600 with the new changes for

  2022 Kentucky USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of$103,500for a family of four and up to $136,600 for a family of five or more. The metro area surrounding counties of Jefferson County includes Oldham, Bullitt, Spencer are included in these higher income limits for USDA loans.

  Remember, the entire Jefferson County and Fayette County Kentucky counties are not eligible for USDA loans. Along with parts of the following counties Daviess (Owensboro), Mccracken (Paducah), Madison County, (Richmond), Clark County (Winchester), Warren (Bowling Green), Hardin (Fort Knox and Radcliff), Bullitt(Hillview, Maryville, Zoneton, Fairdale, Brooks), Franklin, (Frankfort), Henderson (Henderson City Limits)…

• Generally easier to qualify for than a Conventional mortgage and much cheaper mortgage insurance than FHA loans in Kentucky!
• Property must be located in an eligible rural area as designated by map below 
• No maximum loan amount unlike FHA and Conventional loans.
• Eligible Property Types:
• 1 unit properties only and must meet HUD FHA minimum standards
• HUD Approved Condos
• New Manufactured Homes (*There is currently a pilot program in KENTUCKY only that allows for existing homes built after Jan. 2006)

Credit Accounts and Adverse Credit

• Authorized user accounts do not require a monthly payment be included in the debt ratio.

However, lenders may include a payment at their discretion.

Chapter 7 Bankruptcy

• A Chapter 7 bankruptcy that is discharged or dismissed more than 36 months at the time of loan

application is not considered adverse credit.

• If the bankruptcy is less than 36 months, a credit exception is required if the GUS underwriting

recommendation is a “Refer” or “Refer with Caution” or the file is a manually underwritten file.

• If the bankruptcy included a mortgage, the lender must include any debt that the applicant may still be liable for such as real estate taxes and home owners insurance.

Chapter 12 or 13 Bankruptcy

• When there is a Chapter 12 or 13 Bankruptcy plan in progress and the GUS loan receives an “Accept” recommendation, the lender must confirm all payments are included on the Assets and Liabilities application page.

• Neither a GUS downgrade nor a credit exception are required.

• If the loan receives a “Refer” or “Refer with Caution” underwriting recommendation or is a

manually underwritten loan, the lender must retain the bulleted list of items shown on this slide.

• If the plan has been completed for 12 months prior to loan application, nothing further is

required regardless of underwriting recommendation.

Charge‐Offs

• If there are charge‐offs, the lender’s underwriter must determine if the credit risk is acceptable.

• Charge‐offs are not required to be paid; however, if there is a repayment plan in place, the

payment must be included.

Collections

• The lender’s underwriter must review all collection accounts and determine if it is an acceptable

credit risk regardless of the GUS underwriting recommendation.

• If the cumulative total of all non‐medical collections exceeds $2000, the lender must:

1. Require payment in full of these accounts prior to closing

2. Use an existing repayment agreement amount OR

3. Include five percent of the outstanding balance.

• All open collections must be listed on the Asset and Liabilities GUS page and noted and marked

• A credit exception is not required for collection accounts regardless of the GUS underwriting

recommendation.

Consumer Credit Counseling Debt Management Plans

• Lenders must include the monthly payment amount in the monthly liabilities and must retain the bulleted list of items shown on this slide.

Delinquent Court Ordered Child Support

• Applicants currently delinquent on court ordered child support are ineligible unless they have an approved repayment agreement and have made 3 timely, consecutive payments.

Delinquent Federal Non‐Tax Debt

• Applicants with delinquent Federal non‐tax debt are ineligible until the debt is paid in full or a

release of liability is documented.

Federal Taxes

• Applicants currently delinquent on federal tax debt are ineligible for a guaranteed loan unless

they have a repayment plan approved by the IRS or pay the total delinquent amount in full prior to closing.

• A minimum of 3 timely, consecutive payments must have been made and the applicant

cannot prepay a lump sum at one time to equal 3 monthly payments.

• An IRS approved extension to file a tax return does not grant the applicant additional time to pay their taxes that are due.

• Applicants must pay their estimated income taxes due by the filing date or they are considered delinquent. 

Deed‐in‐Lieu, Foreclosures, and Short Sales

• Lenders must ensure the Declarations in the GUS are completed accurately.

• A deed‐in‐lieu recorded, foreclosure discharged, or short sale closed 36 months prior to the date of loan application is not adverse credit.

• If the loan receives a GUS “Accept” underwriting recommendation, neither a GUS downgrade nor a credit exception is required.

• A credit exception is required if a deed‐in‐lieu, foreclosure, or short sale occurred within the

past 36 months and the GUS underwriting recommendation is a “Refer” or “Refer with

Caution”.

• A deed‐in‐lieu, foreclosure, or short sale that occurred post divorce or legal separation and the home was awarded to the other party will not count adversely against the applicant if

documentation evidences the debt was current at the time the home was awarded to the other

Previous USDA Loss

• A lender cannot waive adverse credit for an applicant whose previous Rural Development Direct or Guaranteed home loan resulted in a loss to the agency. Only a Rural Development official may grant this exception.

• Rural Development will perform its review after the lender’s underwriter has approved the loan and has processed the final GUS submission.

• The applicant and lender must provide a letter of explanation and supporting documentation as required

Rent/Mortgage Payment History

• An applicant’s current rent or mortgage payment history is a good indicator of the probability of their future mortgage payments.

• A GUS “Accept” file does not require a verification of rent or mortgage.

• A GUS “Refer”, “Refer with Caution”, or manually underwritten loan may require a verification of rent or mortgage. The lender will refer to their GUS Underwriting Findings Report to determine if it is required.

• If a full 12 month verification is not available, the lender may utilize the time period that is

available.

• One rent or mortgage payment that was 30 or more days late in the past 12 months is significant derogatory credit and will require a credit exception from the lender’s underwriter.

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Contact us for an overview of the property eligibility boundaries specific to your area, or look up the eligibility of a specific address here: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp

Want to learn more about KENTUCKY USDA loans? Let us know, we are here to help!

100% Financing Zero Down Payment Kentucky Mortgage Home Loans for Kentucky First time Home Buyers: Kentucky USDA Rural Housing Mortgage Lender: How t...

100% Financing Zero Down Payment Kentucky Mortgage Home Loans for Kentucky First time Home Buyers: Kentucky USDA Rural Housing Mortgage Lender: How t...: Kentucky USDA Rural Housing Mortgage Lender: How to Apply & Get Approved for The Kentucky USDA ... : Who can apply for this program? A n...

Kentucky USDA Mortgage Loans get Drastically Lowering Costs for Buyers

Kentucky USDA Mortgage Loans get Drastically Lowering Costs for Buyers

  USDA has announced that effective their Fiscal Year 2017 which starts October 1, 2016, that the USDA funding fee is lowering from 2.75% to only 1% for all Kentucky-backed USDA Rural Housing Mortgage loans!  Plus the annual fee which is figured into the payment kind of like PMI is lowering from .50% to .35%! 

Here's an example of the savings: The current funding fee on a $100,000  purchase would be about $2,50  financed on top of the loan but 1% would make it just a little over $1,000.  That is a great savings, then there will be an additional lower payment because of the lower annual fee. For example on the monthly payment savings you are now looking at about an $14 monthly difference in your monthly payment.

Not only buyers looking for a no money down purchase at a great fixed rate can take advantage of this but also borrowers with a  current USDA loan can use these features to refinance to a new USDA loan even with no appraisal.  

Call us for questions/scenarios you have and approving buyers up-front or if you have an issue on a borrower. 

-- 

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

 phone: (502) 905-3708

 Fax:     (502) 327-9119

kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

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What are the requirements for Financing on a Guaranteed Rural Housing Loan in Kentucky?

Kentucky Guaranteed Rural Housing

(102% Financing on appraised value)

   

see the full video below on qualifying for a Kentucky USDA Mortgage loan below:

👇👇👇👇

If you want a personalized answer for your unique situation call, text, or email me or visit my website below:

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708
fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/

Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

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Kentucky USDA Loans

Kentucky USDA Loans

What are USDA Home Loans?

USDA stands for United States Department of Agriculture. A USDA Mortgage provides a low-cost insured home mortgage loan that suits a variety of options. A USDA mortgage is likely the best home loan option if you want to purchase a home with no down payment. If you're unsure about your credit rating, or have concerns about a down payment when you're doing a home loan comparison, USDA Rural Mortgage Loans can give you piece of mind with zero-down, super low closing costs and no monthly mortgage insurance.



What Types of Loans does USDA offer in Kentucky?

Currently, there are two kinds of USDA Home Loans available in Kentucky for single family households:



USDA Guaranteed Rural Housing Loans

USDA Guaranteed Home Mortgage Loans are the most common type of USDA Loan in Kentucky and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. Area income limits for this program can be viewed here. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate.



USDA Direct Rural Housing Loans

USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain homeownership, as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to see area income limits for this program.



What factors determine if I am eligible for a USDA Loan in Kentucky?

To be eligible for A USDA Rural Loan in Kentucky, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (29% ratio). Your credit background will be fairly considered. A 620 FICO credit score is required to obtain a USDA Rural Housing Loan approval through most lenders. You must also have enough income to pay your housing costs plus all additional monthly debt (41% ratio). These ratios can be exceeded somewhat with compensating factors. Applicants for loans may have an income of up to 115% of the median income for the area. Maximum USDA Guaranteed Loan income limits for your area can be found at here. Maximum USDA Direct Loan income limits for your area can be found at here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.



What is the maximum amount that I can borrow?

The maximum amount for an USDA home loan is determined by:





Maximum Loan Amount: The is no set maximum loan amount allowed for USDA Rural Home Loans. Instead, your debt-to-income ratios will dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for your area can be found at here.



Maximum financing: The maximum USDA Rural Development Loan amount is 103.5% of the appraised value of the home (100% plus the 3.5% USDA RD Loan guarantee fee).



How much money will I need for the down payment and closing costs?

USDA Rural Development Mortgage Loans require no down payment and they allow for the closing costs to be included in the loan amount (appraisal permitting).



What property types are allowed for USDA Rural Loan Mortgages?

While USDA Mortgage Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and single family residences.

Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.

 800 Stone Creek Pkwy, Ste 7,

Louisville, KY 40223
(: (502) 905-3708 | 7 Fax: (502) 327-9119|

 Company ID #1364 | MB73346
http://mylouisvillekentuckymortgage.com 

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