Kentucky Mortgage Guidelines for Gift Funds for Fannie Mae, Conventional, FHA, VA Home Loans

Kentucky Mortgage Guidelines for Gift Funds for Fannie Mae, Freddie Mac, Conventional, FHA, and VA Mortgage Loans

 

Kentucky Fannie Mae Gift Funds Guidelines

 

Kentucky Freddie Mac for Gift Guidelines

 

Kentucky FHA Mortgage Loans Gift Funds

 

Kentucky VA Mortgage Loans and Gift Funds 

 

 

FHA GIFT OF EQUITY FOR KENTUCKY MORTGAGE LOANS

  Gift of Equity For a Kentucky Home Mortgage Loan for FHA 

The gift of equity guidance doesn't address paying off debt so it will be up to the DE underwriter to make the decision, but keep in mind that this may be considered an inducement to purchase since there is no exception listed for family members.

What seller contributions are considered inducements to purchase?

Inducements to Purchase are treated the same way for both TOTAL and Manual underwriting.  Inducements to Purchase refer to certain expenses paid by the seller and/or another Interested Party on behalf of the Borrower and result in a dollar-for-dollar reduction to the Adjusted Value of the property before applying the appropriate Loan-to-Value (LTV) percentage.  These inducements include, but are not limited to:
•     contributions exceeding 6 percent of the Purchase Price;
•     contributions exceeding the origination fees, other closing costs, prepaid items and discount points;
•     decorating allowances;
•     repair allowances;
•     excess rent credit;
•     moving costs;
•     paying off consumer debt;
•     Personal Property;
•     sales commission on the Borrower’s present residence; and
•     below-market rent, except for Borrowers who meet the Identity-of-Interest exception for Family Members.  

(1)    Personal Property
Replacement of existing Personal Property items listed below are not considered an inducement to purchase, provided the replacement is made prior to settlement and no cash allowance is given to the Borrower. The inclusion of the items below in the sales agreement is also not considered an inducement to purchase if inclusion of the item is customary for the area:
•     range
•     refrigerator
•     dishwasher
•     washer
•     dryer
•     carpeting
•     window treatment
•     other items determined appropriate by the Homeownership Center (HOC) 

(2)     Sales Commission 
An inducement to purchase exists when the seller and/or Interested Party agrees to pay any portion of the Borrower’s sales commission on the sale of the Borrower’s present residence.  An inducement to purchase also exists when a Borrower is not paying a real estate commission on the sale of their present residence, and the same real estate broker or agent is involved in both transactions, and the seller is paying a real estate commission on the property being purchased by the Borrower that exceeds what is typical for the area. 

(3)     Rent Below Fair Market 
Rent may be an inducement to purchase when the sales agreement reveals that the Borrower has been living in the property rent-free or has an agreement to occupy the property at a rental amount considerably below fair market rent.  Rent below fair market is not considered an inducement to purchase when a builder fails to deliver a property at an agreed-upon time, and permits the Borrower to occupy an existing or other unit for less than market rent until construction is complete.  

Give us a try or let us compare your options on your next mortgage transaction. Call/text at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications.

Email me at kentuckyloan@gmail.com with your questions

I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky. For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance.

This website is not an government agency, and does
not officially represent the HUD, VA, USDA or FHA or any other government agency.

NMLS# 57916 http://www.nmlsconsumeraccess.org/

Joel Lobb Senior Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223

phone: (502) 905-3708
Fax: (502) 327-9119
kentuckyloan@gmail.com

Company ID #1364 | MB73346E
EQUAL HOUSING LENDER
http://www.mylouisvillekentuckymortgage.com/

Kentucky Mortgage Underwriting Guidelines For Deposits, Job Gaps, Credit Inquiries

Kentucky Mortgage Underwriting Guidelines 

Applying for a Kentucky Mortgage

 Most Kentucky home buyers will need to gather and document the information upfront so you will have minimal problems once the underwriter issues your final mortgage loan approval .  Let’s look at some common underwriting issues that arises on the final mortgage approval.

Job Gap—The application will call for you to document your last two years of employment history. If you have had several jobs, or job gaps of more than 6 months, you will need to document why you were off work and why you made the changes in your job. The underwriter is looking for stability in your pay and job. If you were in school recently, then the underwrite may want to see transcripts to verify this.

Credit Inquiries- Are there credit inquiries producing a red flag? • Does the applicant have excessive verified assets that could cover the dollar amount of the large deposit to, in essence, negate the effect of the large deposit?
The asset documentation must present sufficient funds of an acceptable source for down payment, closing costs and reserves. If you have had a lot of recent inquiries on your credit report, the underwriter will want an explanation on why the inquiries were made and see if any new debts has opened since the credit report has been issued.

Large Deposits in Checking and Savings Accounts–  this is a biggie for most people.   what constitutes a large deposit requiring additional explanation and documentation. For Kentucky Mortgage Conforming loans:  considers a large deposit to be any deposit greater than 25% of the borrower’s qualified monthly income. A letter of explanation and sufficient documentation to support the source of the funds will be required.  For FHA/VA loans:  will require a letter of explanation on any large deposit, as determined by the underwriter. Additionally, any deposit of an amount equivalent to 2% or greater of the loan sales price must have its source of funds documented and verified.

Most Kentucky Mortgage underwriters now days  considers a large deposit to be any deposit greater than 25% of the borrower’s qualified monthly income. Any such deposit not consistent with the borrower’s employment, earnings and/or savings profile must be fully explained and sourced with acceptable documentation in order to be eligible for down payment, closing costs, earnest money deposit and reserves. All funds used for down payment, closing costs, earnest money deposit and reserves must be from an acceptable source and clearly not be a result of undisclosed borrowed funds or incentive from an interested party such as a seller, real estate agent or developer.

A large deposit could be a single deposit or multiple deposits over a period of time that in aggregate, result in a large deposit. A review of the borrower’s financial profile must be conducted in order to draw a conclusion that a deposit must be sourced. Items to take into consideration when identifying deposits to be sourced are as follows: • Are the deposits within the normal deposit pattern from an identifiable
income source?

• Are total monthly deposits consistent with income?
 • Is the ratio of deposits to income reasonable?
• Is the borrower’s income direct deposited?
• Are there multiple deposits over a period of time that in aggregate, result in a large deposit?
• Was the account recently opened?

All large deposits must be addressed. Regardless of how long ago the earnest money was deposited, it must be verified. A signed letter of explanation from the borrower is required in all circumstances. If the borrower is able to provide a reasonable explanation and sufficient documentation to support the deposit is of an acceptable source, the large deposit may be included in the funds to close.

There may be an occasion, when the borrower is able to provide a reasonable explanation, but unable or unwilling to sufficiently document the source of a large deposit and has assets exclusive of the large deposit that are sufficient for closing and reserves. An underwriter, after exercising due diligence to ensure funds are not from an unacceptable source, may deduct the large deposit from the balance of the account, and allow the remaining balance in the account to be used as funds to qualify. In the course of due diligence, the underwriter must be confident the deposit was not as a result of an undisclosed debt or as a result of incentives from a seller, real estate agent or developer. In the event that an asset balance is reduced by the amount of a deposit, the system must be corrected, the reason for the change in the asset amount documented and the AUS decision must be updated.

Any deposit that cannot be adequately explained could potentially raise a red flag and result in a declination. Items for consideration when excluding a deposit from the asset balance:
• Do the overall assets seem reasonable given the borrower’s financial profile?
• Is there other documentation in the file (such as tax returns) that may support additional income or asset sources?
• Is the deposit possibly a loan?

GIFT FUNDS —- Gift funds are acceptable from a close relative, a close friend with a clearly defined interest in the borrower, the borrower’s employer or a non-profit organization.  Entire cash investment can be gifted by relative, church municipality, non-profit agency.  Transfer of funds must be documented (no exceptions).  Underwriters  will require the donor’s account statement and proof of withdrawal.   Provide copy of fully executed gift letter (FHA applicant must also sign).  Provide copy of cancelled check from donor or copy of donor’s withdrawal slip and matching deposit into applicant’s bank account or deposit slip; or  Provide copy of cashier/treasurer/certified check to be given to closing agent.  Amount must be denoted on HUD-1.  If funds wired at closing, provide copy of wire transfer or copy of the check.  This will need to take place prior to the funding of the loan.  Only family members may provide a gift of equity.

CASH ON HAND—Money must be deposited and verified either through VOD or title company escrow letter AND the applicant must provide satisfactory evidence of the ability to have saved this money. If a VOD is used, a 1 month bank statement supporting the VOD is required. (The applicant must also provide a letter explaining how the money was saved and the length of time it took to save it.) May not be used as a source of assets for gift transactions.
Note: All other factors being equal, those individuals with checking and/or savings accounts are less likely to save money at home than an individual with no history of such accounts.

If you would like more information or just have questions about qualifying for a Kentucky Mortgage in 2013, be it FHA, VA, Fannie Mae, USDA,  just contact me below for your mortgage needs.

Earnest Money Deposit-

Earnest Money Deposit (EMD)
A deposit made by the buyer when the purchase offer is accepted. The funds are held by the escrow company and credited towards the cost of down payment and closing costs.

Earnest Money Deposit– If you put down a deposit on the home you are buying, you will need to get a copy of the bank statement or cancelled check to show the check has cleared your bank account and it will need to show your updated balance after the cancelled check has cleared.

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/

 

FHA GIFT FUNDS KENTUCKY MORTGAGE DOWN PAYMENT REQUIREMENTS

In most cases, it's ok with lenders to use gift money from a family member to make a down payment. The FHA allows down payments of as little as 3.5 percent, 

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/

 

KENTUCKY FANNIE MAE CONVENTIONAL LOAN MINIMUM BORROWER CONTRIBUTIONS CHANGES

KENTUCKY FANNIE MAE CONVENTIONAL LOAN MINIMUM BORROWER CONTRIBUTIONS CHANGES FOR 2019 

Fannie Mae New Loan Limits for Kentucky in 2019 Fannie mae has just announced an increase to Kentucky's County Loan Limits for 2019. Effective Thursday November 29th, Fusion will be updated to allow Kentucky Conventional loans to be locked using the 2019 Loan Limits. The new loan limits are listed below. Individual County Loan Limits for 2019 can be found on Kentucky Fannie Mae Conventional  Loan Limit Look-Up Table HERE.

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

 

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

 

Text/call 502-905-3708
kentuckyloan@gmail.com

 

 

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

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#57916http://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.

Fill out my form!