Wednesday, December 2, 2015

Kentucky USDA Rural Housing Underwriting Changes for 2015 in regards to Credit, Appraisals, Seller Concessions and Collection Acounts




1. Minimum trade lines - I think that this new requirement is being missed more than any other. RD now requires a minimum depth of credit (three lines with at least 12 months each) for all applications. This also applies to GUS “Accept” files. A GUS “Accept” that does not have the minimum credit depth needs to be downgraded to a manual submission by the lender. These credit-light files will require non-traditional credit sources to meet the minimum requirements. Lenders may use the checkbox on the GUS “Credit/Underwriting” tab to downgrade the application results.

 2.Cost approach  on appraisals- All appraisals now require the cost approach to be completed. It is NOT the appraiser’s option, as RD requires it. New structures will require the “reproduction” cost approach; and existing dwellings require the “replacement” cost approach. Please ensure that all appraisals contain both the cost approach and the sales comparison approach to value.

 3.Seller concessions or other interested third party contributions are now limited to 6% of the property’s sale price. It use to based on appraised value or unlimited.

 4. Collection Accounts--Non-purchasing spouse’s collection accounts, unless excluded by state law, are included in the cumulative balance of all collections to determine if the total outstanding balance is equal to or greater than $2,000.



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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