I specialize in Kentucky USDA Rural Housing mortgage loans in KY. Apply for free today for a Rural Housing loan Pre-Approval Letter. Same day approvals. I offer the USDA Rural Development Guaranteed Housing Loans for all counties in Kentucky that are eligible. Put my expert advice to use. Call or text 502-905-3708 or email kentuckyloan@gmail.com This website is not affiliated with USDA or any other government agency. NMLS# 57916 NMLS# 1738461
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: KHC's Down payment Assistance Program (DAP)
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Email - kentuckyloan@gmail.com
Email - kentuckyloan@gmail.com 2. 
Call/Text - 502-905-3708
Call/Text - 502-905-3708
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How to get a USDA Rural Housing Loan in Kentucky?
Kentucky RHS USDA loans are a government-backed mortgage program that sponsors zero down payment mortgages for people who are under a certain income threshold (usually $82k to $109k for a household family in Kentucky) and not access to a down payment on their home. Does not have to be first time home buyer and can own another home possibly if current home does not pass the feasibility test for household as far as size and fit for current family--i.e outgrow the home.
They like to see a stable 2 year work history, does not have to be same job, at least two trade lines for 12 months, and a minimum fico score of 581 or higher. The loans are underwritten through USDA online automated underwriter engine called GUS. Stands for Guarantee Underwriting System.
Kentucky USDA loan income limits vary by location and household size with a base income-limit for the entire state of Kentucky,
The Department of Agriculture offers these loans at interest rates below the average mortgage. Although offered through the USDA, this program is not directed at farmers. It is a low-income housing program designed to help non-urban consumers buy houses who otherwise might not qualify for a loan or afford a mortgage. As a result the requirements to qualify for a USDA loan tend to be different, and typically less stringent, than for a traditional bank loan.
Types of USDA Loans in Kentucky.
There are three types of USDA housing loans available in Kentucky:
Kentucky USDA Direct Loan
These loans are issued directly by the Department of Agriculture and not by a lender. You will deal directly with the local USDA office that represents your location. They're are several USDA offices in Kentucky that service different parts for the Direct USDA loan. This makes them similar to the housing loans offered by the Department of Defense and Veterans Affairs. While direct loans typically offer the best interest rates, sometimes below 1% depending on the applicant and area, they are also highly income-restricted and take months to close usually. This program is geared toward low- and very low-income households. You cannot get a direct loan without demonstrating that you can't afford any other available terms.
This is sometimes otherwise known as a Section 502 Loan, referring to the code section which created the program.
Kentucky Guaranteed Loans
These loans are issued by banks, mortgage companies, mortgage brokers, credit unions and State Housing Agencies by private lenders but backed by the Department of Agriculture. (This means that the USDA will pay the lender back in the event that you default on the mortgage.) As a result, lenders will issue mortgages to people with lower credit scores than they would otherwise and will do so on more favorable terms. Typically USDA will insure the lender up to 90% of the homes loss so lenders can make the loan with very good protections. For example, if a home was originated a $100k loan amount, and was foreclosed upon for non-payment, then the lender will get up to $90k protection on the losses attributed to the losses incurred by the USDA lender.
Like a direct loan, the guaranteed loan program has income requirements. It is less stringent than direct lending, however. This program targets low income households. This is by far the most popular USDA loan made in Kentucky with over 4000 Kentucky Guaranteed Mortgage loans made annually in Kentucky.
These loans are issued by banks, mortgage companies, mortgage brokers, credit unions and State Housing Agencies by private lenders but backed by the Department of Agriculture. (This means that the USDA will pay the lender back in the event that you default on the mortgage.) As a result, lenders will issue mortgages to people with lower credit scores than they would otherwise and will do so on more favorable terms. Typically USDA will insure the lender up to 90% of the homes loss so lenders can make the loan with very good protections. For example, if a home was originated a $100k loan amount, and was foreclosed upon for non-payment, then the lender will get up to $90k protection on the losses attributed to the losses incurred by the USDA lender.
Like a direct loan, the guaranteed loan program has income requirements. It is less stringent than direct lending, however. This program targets low income households. This is by far the most popular USDA loan made in Kentucky with over 4000 Kentucky Guaranteed Mortgage loans made annually in Kentucky.
In both cases the government's involvement means that borrowers pay little, if anything, in the form of a down payment.
Kentucky Housing Grants
In addition to its mortgage program the Department of Agriculture also issues loans and grants to rural residents for home upgrades and repair. As with the direct lending program, the USDA provides these grants to low- and very low-income households. The homeowner must use them to "repair, improve or modernize" the home or "remove health and safety hazards" and must occupy the house; in other words, you cannot get a USDA grant to improve a rental property.
The USDA provides a fact sheet explaining in greater detail what a repair loan is and how to get one.
• A pro rata share of real estate taxes that is due and payable on the property at the time of loan closing. Funds can be allowed for the establishment of escrow accounts for real estate taxes and/or hazard and flood insurance premiums.
• Essential household equipment such as wall-to-wall carpeting, ovens, ranges, refrigerators, washers, dryers, heating and cooling equipment as long as the equipment is conveyed with the dwelling.
Homeowners can check with the agency to find a full list of legitimate expenses, which can include property improvements as well as certain utilities and appliances.
Who Can Get a USDA Loan in Kentucky?
Applicants for a Kentucky Rural Housing USDA loan must meet several criteria.
• You must fall within the program's income limits, typically 115% of the median income for your region or less. The direct loan program requires a considerably lower income threshold than the guaranteed loan program does. As with all federal programs, income thresholds vary by community, household size and household composition.
A good first step before applying is to enter your personal information to see if you qualify for a USDA loan's income limits.>>>>>>> here http://kentuckyruralhousingusdaloan.blogspot.com/p/guaranteed-housing-income-limits.html
• You must not use the loan for a commercial purpose or farming income from crops, livestock, and other income producing uses. The borrower has to personally occupy the home as permanent resident with no rental intentions for the home.
• You must be a U.S. citizen, national or qualified alien and must be legally able to take on debt
• You must purchase the home in a qualifying rural area. This program does not apply to cities, and the federal government runs no similar program to subsidize urban home ownership. You can search the USDA's map to find qualifying areas. here >>>>>>>>> http://kentuckyruralhousingusdaloan.blogspot.com/2018/02/usda-eligibility-map-usda-home-loan.html
• You must demonstrate the ability to pay this mortgage. While the criteria for a USDA loan is considerably lighter than with a bank, the agency still requires certain financial metrics. The mortgage payments plus the monthly payments on the credit report cannot exceed 45% of the borrower's gross monthly income.
• You must show your credit score. For a guaranteed loan most banks will require a credit score of at least 620 middle credit score from fico. , since this is the cutoff for the USDA's automatic approval underwriting process called GUS, anything below 640 will get referred to a person at USDA for a manual underwriter. However, this is not a minimum requirement and some banks may choose to proceed anyway.
The direct loan program also requires a score of at least 640 for automatic approval. Again, if you have a lower score or no credit history you may still qualify depending on specific circumstances and if you can show a history of on-time bill payment through paperwork such as rent and utilities.
USDA Direct Loan Specific Requirements
In addition to the above, the direct loan program adds the following requirements.
• You must not currently have "decent, safe and sanitary housing."
• You must have been unable to find a loan from other sources on terms that you could reasonably meet.
• You must buy a home that is 2,000 square feet or less with a market value no greater than the area's loan limit
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#57916 http://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.
Understanding Kentucky USDA Home Loan Approval Guidelines in 2024
Understanding Kentucky USDA Home Loan Approval Guidelines in 2024
If you're looking to buy a home in Kentucky and considering a USDA loan, understanding the approval guidelines is crucial. The USDA (United States Department of Agriculture) offers loans specifically designed for rural and suburban homebuyers with favorable terms. Here's a comprehensive look at what you need to know about credit score requirements, income criteria, work history, debt ratio considerations, bankruptcy and foreclosure history, down payment expectations, mortgage insurance, income limits, and the USDA's Guaranteed Underwriting System (GUS) and manual underwriting process.
Kentucky USDA home Credit Score Requirements
For a Kentucky USDA home loan approval, credit scores are a significant factor. While USDA loans are known for accommodating lower credit scores compared to conventional loans, having a good credit history can still be advantageous. Generally, a minimum credit score of 640 is required for automated approval through GUS. However, lower scores may be considered with compensating factors or manual underwriting down to a 580 credit score.
Kentucky USDA home income Criteria
Your income plays a crucial role in USDA loan approval. The USDA considers both your gross income and your adjusted income, which accounts for deductions like taxes and child support. The income limits vary by county and household size, and they're designed to ensure the loan benefits those with moderate incomes in rural areas.
Kentucky USDA home Work History
Stable employment and a consistent work history are important for USDA loan approval. Lenders typically look for at least two years of steady income from the same job or field.
Kentucky USDA home Debt Ratio Considerations
Your debt-to-income (DTI) ratio is another key factor. Generally, lenders prefer a DTI ratio of 31% to 34% on the front-end ratio and 41% to 45% on the backend ratio or lower, although higher ratios may be considered with compensating factors such as excellent credit or significant cash reserves.
Kentucky USDA home Bankruptcy and Foreclosure History
Having a bankruptcy or foreclosure in your past doesn't automatically disqualify you from a USDA loan. However, there are waiting periods after these events, typically ranging from three to seven years, depending on the circumstances and loan type.
Kentucky USDA home Down Payment Expectations
One of the major benefits of a USDA loan is the option for zero down payment. This can make homeownership more accessible, especially for first-time buyers or those with limited savings.
Kentucky USDA home Mortgage Insurance
Unlike FHA loans that require upfront and ongoing mortgage insurance premiums (MIP), USDA loans have an upfront guarantee fee and an annual fee. The upfront fee can be rolled into the loan amount, and the annual fee is divided into monthly payments. 1% upfront and .35% monthly for life of loan.
Kentucky USDA home Income Limits
USDA loans have income limits based on the area's median income. These limits vary by county and household size and are designed to ensure the program benefits those with moderate incomes in rural areas. see chart here 👉 USDA income limits in Kentucky
Kentucky USDA home Guaranteed Underwriting System (GUS) and Manual Underwriting
The USDA's Guaranteed Underwriting System (GUS) is an automated system that evaluates loan applications. It assesses credit, income, and other factors to determine eligibility. However, if your application doesn't receive automated approval through GUS, manual underwriting is an option. Manual underwriting involves a more detailed review of your financial situation and compensating factors that can offset weaknesses in your application.
In conclusion, a Kentucky USDA home loan offers a path to homeownership with favorable terms, including zero down payment options and flexible credit requirements. Understanding the guidelines for credit scores, income, work history, debt ratios, bankruptcy and foreclosure history, down payments, mortgage insurance, income limits, and underwriting processes can help you navigate the application process more confidently and increase your chances of approval.
Joel Lobb Mortgage Loan Officer
Text/call: 502-905-3708
email: kentuckyloan@gmail.com
http://www.
NMLS 57916 |
NMLS ID# 57916, (www.nmlsconsumeraccess.org).
Kentucky USDA Rural Development Mortgage Guidelines
Kentucky Rural Development Mortgage Guide
Zero down Mortgage loan with no loan limits in Kentucky for USDA Rural Housing Loans
Upfront funding fee is 1.0% and annual mi fee is .35% (very low compared to FHA)
Typically cannot own other real estate. There are exceptions to this.
You do not have to be a first-time home buyer in Kentucky
Can refinance existing USDA loan as long as lowering rate by 1% and can do without an appraisal. There are overlays to this by lenders.
Closing costs and prepaids can be paid by seller but must be put into contract
Closing costs may be financed into the loan up to the appraised value.
You will need two credit trade lines reporting at least for 12 months on your credit file. They don't have to be open and active. Just reporting on your credit report.
All Guaranteed Mortgage Loans are ran through GUS. GUS stands for the Guaranteed Underwriting System. USDA and their underwriters use this system to pre-approve you. They review credit score/history, income, debt to income ratio and assets to determine your loan eligibility. If your credit score is below 640 or your debt to income ratio is over 45%, it will get a refer and you will find most lenders will not approve the loan.
Some lenders will do a credit score down to 600, but they will want a lot of documentation to overturn the refer and compensating factors for the lower credit score. They typically will need to verify rent for last 12 months, with no lates, cash payments are not acceptable, and debt to income ratios are set at 29% and 41% respectively. Reserves are typically helpful too on lower credit scores, so keep in that in mind, if you have money in a savings account, for a rainy day fund, this will help sometimes get the loan approved.
If you have access to 20% down payment you cannot use the USDA Program. Money in a retirement account does not account toward the 20% rule.
Properties must be located in an eligible area of Kentucky. Typically the large metro areas of Kentucky including the following: all of Jefferson County, all of Fayette County, Owensboro, Paducah, Hopkinsville, Bowling Green, Richmond, Frankfort and Northern KY cities of Covington, Florence, Erlanger, Beechwood, Richwood are not eligible
Check USDA Property map below to see if home is located in an approved USDA area. 👇
USDA Eligible Areas In Northern Kentucky for Boone, Kenton, Campbell, Grant Counties
Kentucky USDA Rural Max Income Limits:👇
Check Your Kentucky County for USDA Rural Housing Income Limits
It's a two step approval process. The chosen USDA lender must first underwrite the file and get it approved based on the income, assets, and credit report submitted. Then, the lenders must submit to USDA for a "conditional commitment". This conditional commitment is the final loan approval paperwork you are looking for.
Even though the lender may have approved the file, it still must go to USDA office in Lexington for an assignment to SFH underwriter for the final approval process. They typically are checking the appraisal and income at this stage. There have been instances where the lender would approve the file but USDA would not due to appraisal issues or income and job history.
This is very rare instances, so keep that in mind when it comes to final loan approval.
This two-step approval process usually adds 4-6 days to the final loan approval process, so keep that in mind when you are writing up your contract because it takes a little longer to close these loans vs FHA, VA, and Fannie Mae loans.
Well Test Treatments: Properties with a well as the primary drinking source will require a well water test. There are local labs to perform this test and the water must pass.
Septic Test: Sometimes they will require the septic tank to be inspected if called for in the appraisal report or home inspection.
Older Homes: As a general rule, USDA does not like homes older than 100 years old. They will sometimes require a home inspection in addition to the mandatory appraisal on older homes.
USDA Loan After a Short Sale: A short sale is not the end of the world. So it is very possible to obtain a USDA loan if 3 years have passed after the short sale. But a buyer would need re-established good rent and other credit history.
Bankruptcy and Foreclosure: If the mortgage debt that was foreclosed, was included in a Bankruptcy – then the USDA Home Loan waiting periods after foreclosure “waiting period” of 3 years, starts from the date of the discharge of the Bankruptcy. Because it can take 6 months or more for Banks to process the Foreclosure, and transfer title, this is a tremendous plus.
Put my experience of originating KY USDA loans to work for you. I have successfully originated over 200 Rural Housing Mortgage Loans in Kentucky. I offer free pre-approvals and will help you from start to finish and I usually attend all my closings in Kentucky.
Get Qualified for a Kentucky USDA Loan Now!
USDA Eligible Areas In Northern Kentucky for Boone, Kenton, Campbell, Grant Counties
Kentucky USDA Rural Max Income Limits:👇
Check Your Kentucky County for USDA Rural Housing Income Limits
Some More Facts about a Kentucky USDA loan:
It's a two step approval process. The chosen USDA lender must first underwrite the file and get it approved based on the income, assets, and credit report submitted. Then, the lenders must submit to USDA for a "conditional commitment". This conditional commitment is the final loan approval paperwork you are looking for.
Even though the lender may have approved the file, it still must go to USDA office in Lexington for an assignment to SFH underwriter for the final approval process. They typically are checking the appraisal and income at this stage. There have been instances where the lender would approve the file but USDA would not due to appraisal issues or income and job history.
This is very rare instances, so keep that in mind when it comes to final loan approval.
This two-step approval process usually adds 4-6 days to the final loan approval process, so keep that in mind when you are writing up your contract because it takes a little longer to close these loans vs FHA, VA, and Fannie Mae loans.
Well Test Treatments: Properties with a well as the primary drinking source will require a well water test. There are local labs to perform this test and the water must pass.
Septic Test: Sometimes they will require the septic tank to be inspected if called for in the appraisal report or home inspection.
Older Homes: As a general rule, USDA does not like homes older than 100 years old. They will sometimes require a home inspection in addition to the mandatory appraisal on older homes.
USDA Loan After a Short Sale: A short sale is not the end of the world. So it is very possible to obtain a USDA loan if 3 years have passed after the short sale. But a buyer would need re-established good rent and other credit history.
Bankruptcy and Foreclosure: If the mortgage debt that was foreclosed, was included in a Bankruptcy – then the USDA Home Loan waiting periods after foreclosure “waiting period” of 3 years, starts from the date of the discharge of the Bankruptcy. Because it can take 6 months or more for Banks to process the Foreclosure, and transfer title, this is a tremendous plus.
Put my experience of originating KY USDA loans to work for you. I have successfully originated over 200 Rural Housing Mortgage Loans in Kentucky. I offer free pre-approvals and will help you from start to finish and I usually attend all my closings in Kentucky.
Get Qualified for a Kentucky USDA Loan Now!
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#57916 http://www.
-- 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.
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Assumption of A Kentucky Mortgage Loan
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Assumption of A Kentucky Mortgage Loan: In regards to the assumption of the mortgage on a borrowers current loan on a house. This sounds good on paper but in reality it never works...
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