New USDA Loan Guidelines for Kentucky Home Buyers

I wanted to share an important update regarding the USDA Single Family Housing Guaranteed Loan Program (SFHGLP) for Kentucky home buyers. 

The USDA has recently proposed revisions to several chapters of their technical Handbook 1-3555, which may impact various aspects of the loan process. These proposed changes are currently open for comment until December 8, 2024, with final publication expected soon. Here’s an overview of the proposed revisions:

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Key Proposed Updates to Kentucky Rural Housing USDA Guidelines:

Seller Concessions: Clarifies that funds provided by the seller to pay the buyer’s real estate commission fees are excluded from the 6% seller concession cap.

Refinancing Eligibility: The seasoning period for an existing loan to be eligible for refinancing has been updated to 180 days.

Payment History Requirement: To qualify for a refinance, the existing loan must not have any delinquencies greater than 30 days within the previous 180-day period.

Manufactured Homes: Removed existing manufactured homes from the list of prohibited loan purposes.

Builder’s Warranty: The one-year builder’s warranty must include the date, warrantor, buyer, location, and signatures.

Rehabilitation and Repair: The maximum for non-structural repairs with a home purchase is updated to $75,000. Structural repairs now have a reserve period extended to 10 months if exceeding $75,000.

Manufactured Homes Repairs: Repairs to manufactured homes (both new and existing) are no longer listed as prohibited purposes.

Title Insurance: Community land trust, leasehold interest properties, and manufactured homes now require title insurance.

New Manufactured Homes: Must be built within 12 months of loan closing. The certification label should remain visible after installation is complete.

Existing Manufactured Homes: New guidelines for financing existing manufactured homes align with the requirements in the upcoming Existing Manufactured Home Final Rule.

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These revisions enhance flexibility for Kentucky USDA home buyers, especially with updates related to manufactured homes, property types, and refinancing eligibility. If you’re interested in discussing how these changes may affect your eligibility or if you have any questions about Kentucky Rural Housing USDA loan options, please feel free to reach out. I’m here to help you navigate these updates and find the best financing solution for your new home.

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans

 Website: www.mylouisvillekentuckymortgage.com
 Address: 911 Barret Ave., Louisville, KY 40204

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Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

Key ways to get your best rate possible on your Kentucky Home loan

 Kentucky Mortgage Rates

 Key ways to get your best rate possible on your Kentucky Home loan

Historically speaking, current mortgage rates are pretty average.

But considering all the other factors involved in our post-pandemic housing market, many people are struggling to afford a home.

 Here are the top ways you can get your best mortgage rate, even in a tough market:

• Improve your credit score by paying down your debt and making all payments on time
• Consider all your loan options, including your term length and fixed rate vs. adjustable-rate mortgages
• Shop around for a lender and compare rates and terms

These key factors can mean the difference in paying thousands of dollars extra over the life of your loan.

It all depends on your unique situation.

Best loan options for Kentucky Mortgage borrowers in today’s market

• Conventional purchase — best for borrowers with a high credit score and at least 5% down payment
• 
  
• FHA loan — best for first-time borrowers with more flexible credit requirements with lower credtit scores 500 to 580- 
• 
  
• VA loan — potential for zero down for active-duty military personnel, veterans, and eligible surviving spouses
• 
  
• USDA loan — potential for zero down for for borrowers in rural areas who have moderate to low incomes
• 
  
• Bank statement loan — for self-employed individuals
• 
  
• KHC Loan --Down payment Assistance Grant for Zero Down Home Loans

 Ask your lender about 2-1 buydowns and adjustable-rate mortgages for methods to get a lower initial rate.

 How much home can you afford?

Let’s demystify the mortgage process.

Here are three common models lenders use to calculate how much of your income should go toward your monthly mortgage payment:

• 28/36 rule: Your max monthly mortgage payment can’t exceed 28% of your gross monthly income, and your mortgage plus other monthly debts cannot exceed 36%

While this is a good starting point, this standard is nearly impossible to hit in many housing markets. Most borrowers today have "debt-to-income ratios" closer to 40-50% of their gross income.

Beyond your debts, lenders will evaluate your income, employment history, and credit score.

That's how to get the lowest mortgage rate possible for your borrower scenario.

What about getting the lowest monthly mortgage payment possible?

• Boost your credit score
• Make a larger down payment
• Choose a more affordable home
• Shop around for the best mortgage rate
• 2-1 mortgage buy down with points pay to lower rate 
• Mortgage Revenue Bonds Programs Kentucky Housing Corp.
• Shared Appreciated Mortgage (SAM) in Kentucky

Discounted Mortgage Rate 5.5% 30 year fixed rate loan. ***

 Exciting News! KHC is thrilled to reintroduce its MRB program, now featuring an interest rate of 5.5%!

BONUS!!! Add $10,000 in down payment assistance to this amazing program for a power move!
Eligibility requirements for the programs do apply, so reach out to us today for more information. Call or Message us now and seize the moment!

***Subject to Credit Qualifying Criteria and subject to change.

(1) The above rate quote has the following assumptions: $200,000 purchase; $194,000 loan amount; 0% down payment; 620 FICO credit score; property is SFR; borrower has sufficient income and assets to qualify; Tax and insurance impounds required; Estimated closing costs affecting the 6.375% APR include all standard fees. Monthly payment without taxes and insurance is $1,481.00. Rate and Annual Percentage Rate shown as of 11/01/2024, subject to change.

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916




Text/call: 502-905-3708

How to Qualify For A Kentucky Mortgage Loan

https://www.mylouisvillekentuckymortgage.com/p/underwriting-guidelines.html

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Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: KHC's Down payment Assistance Program (DAP)

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: KHC's Down payment Assistance Program (DAP): Down Payment Assistance Programs in Kentucky Kentucky Down payment assistance loans are available up to $10,000 for Mortgage For Kentuck...

Can you buy a house in Kentucky with Bad Credit?

Buying A House with Bad Credit in Kentucky

When in comes to buying a house in Kentucky and getting approved for a mortgage loan a lot of buyers will have to confront their past credit issues. Credit, along with income, work history, and assets determine if you qualify for a mortgage loan. 

Below I will address the main issues you have to address when it comes to getting approved for a mortgage with past credit problems. 

 Mortgage late payments: One late payment in the last 12 months is permitted so long as it can be explained and fully documented if necessary.

• Foreclosure: Thirty-six months from the date of the foreclosure until eligibility to repurchase using the 3.5 percent down payment FHA Loan, 48 months for VA Loans (no money down required), seven years no matter the down payment on a conventional type.

• Short sale: Thirty-six months from the date of the short sale until eligibility to repurchase using the 3.5 percent down payment FHA Loan, 24 months with the VA, 24 months on a conventional money loan with a minimum down payment of 20 percent.

Bankruptcy: Chapter 7 (Chapter 13 is less common), 24 months from the date of discharge until eligibility to repurchase using the 3.5 percent down FHA Loan, 48 months on VA Loans (still no money down required),  48 months on conventional no matter the down payment. All mortgage companies have different thresholds of risk appetite. For example, the FHA (Federal Housing Administration) has no credit score requirement. Why, then, do lenders have a minimum credit score requirement of 620 for an FHA Loan? Unbeknownst to the majority of home buyers, many mortgage companies have a secret ominous business strategy.

Enter “investor overlays.” 
Investor overlays are adjustments to guidelines and/or pricing created in favor of the mortgage company. This is exactly why one lender can do the loan, and another lender cannot do the loan in some instances.
Tip: every mortgage lender has investor overlays, it’s the nature of how mortgage companies operate, key is work with the lender whose overlays are minimal.

Timing

Typically speaking, if you want to get a mortgage after bankruptcy you’ll need to allow time to pass. For conventional mortgages you’ll need to wait four years after Chapter 7 bankruptcy or two years after Chapter 13 bankruptcy. But there are some other mortgage options that require a shorter waits.

Credit Scores 

580 to 620 is the bottom score (again with few exceptions) that lenders will permit. Below a 620, then you have to look at doing a FHA loan or VA loan if you are a veteran. Even at 620, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan. 720 is when you really start to get in the “as a lender we love you” credit score. 760 is even better.

 Watch your credit scores carefully. You have three credit scores, and the lender will take your middle score. For example, let's say you have a 590 on Transunion, 679 on Experian, and a 618 on Equifax. Then your middle qualifying credit score will be 618 credits score.

If you absolutely cannot get your credit scores up to 620, then FHA will be a good option for you. FHA states that if your fico credit score is 580 or above, they will allow for a 3.5% down payment, and if below 580, you will need 10% down payment.

There are a lot of mortgage lenders that will not go below 580 to 620 range, so keep that in mind when you are shopping for a mortgage lender, because they create credit overlays.

FHA Mortgage

Two years after your Chapter 7 bankruptcy discharge you may apply for an FHA loan. If you filed Chapter 13 bankruptcy, then you’ll only need to wait until you’ve made twelve months of satisfactory payments, and you’ll need to get the approval of the bankruptcy trustee. But if you want to be given serious consideration, you’ll need to provide a clear explanation for why you filed bankruptcy. For example, maybe you filed Chapter 13 bankruptcy because you had a medical emergency and was unable to pay your medical bills.

VA Mortgage

If you’re a veteran, you can get a VA mortgage two years after your bankruptcy discharge. This VA application process can be challenging, but in some ways it’s more lenient since post-bankruptcy credit issues such as a foreclosure won’t restart the 2-year waiting period. However, credit issues after bankruptcy might affect your interest rate, so take care to keep your credit as clean as possible.

USDA Mortgage

If you live in a rural area, you may qualify for a USDA mortgage three years after your bankruptcy discharge. It’s important to note that while the USDA provides loans to rural residents it’s only for property that will serve as the borrower’s primary residence. The USDA will not finance the purchase of income property or a vacation home.

As you prepare to apply for a mortgage after bankruptcy, keep in mind that the mortgage lender will take into account the totality of your financial situation—your finances, credit history, credit score, and any extenuating circumstances

Joel Lobb  Mortgage Loan Officer

EVO Mortgage
911 Barret Ave, Louisville, KY 40204

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

https://www.mylouisvillekentuckymortgage.com/2010/10/get-approved-for-mortgage-or-home-loan.html

NMLS 57916  | Company NMLS#173846

How much income do I need qualify for Kentucky Home Loan?

Kentucky Lender's Criteria: Debt-to-Income Ratios

The Debt-to-Income (DTI) ratio is a critical factor in determining whether you qualify for a mortgage along with credit, work history and assets. It measures how much of your gross monthly income is used to cover your monthly debt obligations.

For Most Kentucky Mortgage loans ,the  debt to income ratio is centered around the front end ratio and back end ratio. The front end ratio will vary according to the different types of loans, and I will show them below.  The backend ratio, which measures the new house payment along with your current monthly payments on the credit report along with any court ordered payments like child support, DTI limit is typically 45 to 50%

From a Kentucky Mortgage lender's perspective, your ability to purchase a home depends largely on the following factors:

Front-End Ratio

The front-end ratio is the percentage of your yearly gross income dedicated toward paying your mortgage each month. Your mortgage payment consists of four components: principal, interest, taxes and insurance (often collectively referred to as PITI) A good rule of thumb is that PITI should not exceed 31% of your gross income. If you make $100,000 a year, then your max house payment to include escrows for home insurance, mortgage insurance, property taxes would be $2583.00

Back-End Ratio

The back-end ratio, also known as the debt-to-income ratio, calculates the percentage of your gross income required to cover your debts. Debts include your mortgage, credit-card payments, child support and other loan payments. Most lenders recommend that your debt-to-income ratio does not exceed 45% of your gross income. To calculate your maximum monthly debt based on this ratio, multiply your gross income by 0..45 and divide by 12. For example, if you earn $100,000 per year, your maximum monthly debt expenses should not exceed $3,750 with new mortgage payment. Utility bills, car insurance, cell phone bills, insurance payments does not factor into this ratio. Only bills listed on credit report and 401k loan and child support payment




If you are looking to purchase your first home, you have probably been doing your research about properties in your area, where you might be able to obtain a loan and how to qualify for it. A key term you may recognize from all that research is "debt-to-income ratio," which refers to the figure you get when you add up all your monthly debt payments and then divide that number by your monthly income. In laymen's terms, the debt-to-income ratio gives potential mortgage lenders an idea of how much your expenses are each month in comparison to how much you actually earn.


Depending on where you are in the home-buying process, you may have a good idea of where your credit score lands. As important as a strong credit score is, however, a favorable debt-to-income ratio is arguably of equal importance, and it may be just as closely scrutinized by any potential mortgage lender.

Front-end ratios vs. back-end ratios

When you try and obtain a loan, expect possible lenders to review two types of debt-to-income ratio. The front-end ratio, or "housing" ratio, gives them an idea of what percentage of your monthly income would have to go toward home-related expenses, such as the mortgage, associated taxes and any additional fees, such as homeowner's association expenditures, that may apply.


The back-end ratio, on the other hand, takes a more cumulative approach and compares your monthly income to all your expenses, from the housing-related ones to school tuition, child support, car payments and any other financial obligations you may have.

The ideal debt-to-income ratio

The exact percentage your lender will look for will likely vary based on factors such as your credit score, how much you have in your savings account and how much you have to put down for your down payment. Most standard lenders, however, prefer to see something in the ballpark of 28 percent for a front-end ratio. For a back-end ratio, they will likely look for a percentage that does not exceed 36 percent. Federal Housing Authority lenders typically look for a front-end ratio of about 31 percent and a back-end ratio that does not exceed 43 percent.

Lower a high ratio

Simply put, the most effective way to lower a high debt-to-income ratio and therefore make yourself more appealing to lenders is to pay off some of your debt. If you have a cosigner who may be willing to help you out with a loan, that could serve as an additional method of getting around a high ratio.

To calculate the debt-to-income (DTI) ratio for the scenario you provided, you'll need to figure out both the front-end and back-end DTI ratios.

1. Front-end DTI ratio: This ratio only includes the mortgage payment (including principal, interest, taxes, and insurance) divided by your gross monthly income.




2. Back-end DTI ratio: This ratio includes all monthly debts (mortgage, credit cards, auto loans, student loans, etc.) divided by your gross monthly income.

   
   

(DTI) ratio requirements for different types of mortgage loans in Kentucky, including FHA, VA, USDA, Fannie Mae, and Kentucky Housing loans:

Joel Lobb  Mortgage Loan Officer

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Text/call 502-905-3708


kentuckyloan@gmail.com

Joel Lobb: Your Trusted Mortgage Broker in Kentucky

 Joel Lobb Mortgage Broker in Kentucky

When it comes to securing a home loan, having a knowledgeable and reliable mortgage broker by your side is crucial. Joel Lobb has been serving the Kentucky community for over 20 years, assisting countless families in achieving their dream of homeownership. Let’s take a closer look at what makes Joel stand out in the mortgage industry.

Specializations

Joel specializes in a variety of mortgage programs, catering to the unique needs of Kentucky residents:

1. FHA Loans: As an expert in Federal Housing Administration (FHA) loans, Joel helps first-time homebuyers and others qualify for affordable financing.

2. VA Loans: Veterans and active-duty military personnel can benefit from VA loans, which offer favorable terms and low or no down payment options.

3. USDA & Rural Housing Loans: For those living in rural areas, Joel assists with USDA and Rural Housing loans, making homeownership accessible even in less densely populated regions.

4. KHC Loans: The Kentucky Housing Corporation (KHC) provides down payment assistance, and Joel guides buyers through the process.

5. Conventional Loans: Whether you’re a first-time buyer or looking to refinance, Joel offers conventional loan options tailored to your financial situation.

Why Choose Joel Lobb?

1. Personalized Attention: Unlike mega banks, where borrowers can feel like mere numbers, Joel treats each client as an individual. He listens to your needs, answers your questions, and ensures a smooth loan process.

2. Access to Multiple Lenders: Joel has access to over 10 different mortgage companies across the country. This advantage allows him to search and negotiate for the best loan options, considering credit, income, and other factors.

3. Transparent and Honest: Joel delivers on his promises. You can trust him to provide straightforward information and guide you through every step of the mortgage journey.

Joel Lobb  Mortgage Loan Officer Expert on Kentucky Mortgage Loans 

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

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