Tuesday, May 10, 2016

What are the benefits of the Kentucky USDA Guaranteed Home Loan Program?

Guaranteed Home Loan offered by the USDA Housing Program in Kentucky:

Kentucky Guaranteed home ownership loans assist eligible applicants in rural areas purchase or construct a home as their primary residence. 
Applicants must be a U.S. citizen or eligible noncitizen with permanent residency. Applicants must have an income below the moderate-income limit (115 percent of the median), meet acceptable credit requirements and have adequate repayment ability.

A credit score of 640 or higher is acceptable. They typically like to see no bankruptcies or foreclosures in the last 3 years. 
If the property shows any signs of farm income, i.e. crops, livestock, hay, etc, they will not lend on the property. It is okay to have storage sheds, barns, garage, as long as it shows not characteristics  of income potential from farming. 
If you are buying an older aged home (100 years or more), they typically will want a home inspection in addition to the appraisal to make sure the home is structurally sound. Average cost of USDA appraisals in Kentucky are now averaging $325-$450

Loans are made through approved lenders with the 30 year fixed interest rate being negotiated with the lender. These 30-year-fixed rate loans are for those in the moderate income bracket. Loans may be up to 100 percent of the market value of the home and can include repairs and typical closing costs not to exceed the appraised value.

There are no maximum mortgage or loan limits with Guaranteed Home Ownership Loans.
If you have ready access to at least 20% down of the purchase price, USDA will not allow you to use their program.

The loans are not just for first-time buyers in Kentucky. Typically if you have a current home, they will make you sell it before using the USDA loan program, but if you can prove your current living standards are not adequate, i.e. house too small for kids and family, then they will grant exceptions sometime.

Typical income limits center around $75k-$80k max household income for a family of four in most Kentucky counties, and up to $98k for a household income for a family of five or more.