Wednesday, June 18, 2014

Kentucky Rural Housing and USDA Loan Requirements on Chapter 7 and Chapter 13 Bankruptcies and Foreclosures Short Sales.

KENTUCKY USDA RURAL HOUSING GUIDELINES FOR 


Chapter  7


·         The Discharge date and GUS findings both play an important role in determining the viability and future repayment of the new loan. As such, Chapter 7 bankruptcy seasoning is evaluated by GUS.



Chapter 13

·         Loans where the borrower is currently in a Chapter 13 bankruptcy or had a Chapter 13 bankruptcy which was discharged within the previous 3 years require a manual downgrade and must be underwritten manually.
·         A borrower who is currently in a Chapter 13 bankruptcy may be eligible for RD financing provided all of the following conditions are met in addition to standard manual underwriting requirements:
• At least 12 months of payments have been made satisfactorily
• The Trustee or bankruptcy judge’s approval to enter into the mortgage transaction is documented
• Bankruptcy payments are included in the borrower’s debt ratio


Foreclosure / Short Sale

·         The foreclosure date and GUS findings both play an important role in determining the viability and future repayment of the new loan. As such, foreclosure seasoning is evaluated by GUS.

·         A foreclosure does not automatically disqualify a borrower from RD financing. In all instances, the “date of foreclosure” is considered the date of the foreclosure deed.
 

 -- 

Joel Lobb
Senior  Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223

 phone: (502) 905-3708
 Fax:     (502) 327-9119

 Company ID #1364 | MB73346