Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: How much income do I need qualify for Kentucky Hom...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: How much income do I need qualify for Kentucky Hom...: Kentucky Lender's Criteria: Debt-to-Income Ratios From a Kentucky Mortgage lender's perspective, your ability to purchase a ho...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Louisville Kentucky First Time Home Buyer Programs

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Louisville Kentucky First Time Home Buyer Programs: Kentucky First Time Home Buyer Programs If you are a potential Louisville Kentucky First Time home buyer first time home buyer in ...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: FHA CHANGES TO HANDLING OF COLLECTIONS, JUDGEMENTS...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: FHA CHANGES TO HANDLING OF COLLECTIONS, JUDGEMENTS...: FHA CHANGES TO HANDLING OF COLLECTIONS AND DISPUTED ACCOUNTS FHA recently released Mortgagee Letters 2013-24 and 2013-25, to...

Current Underwriting Turn Times on Rural Housing USDA Loans in Kentucky

Kentucky Rural Housing USDA Turn Times

Are you interested in knowing the current status of USDA's turn times? USDA provides this information on their website. 

Refer to Kentucky USDA's turn times click link below 

👇👇👇 

 https://www.rd.usda.gov/page/sfh-guaranteed-lender

-

Kentucky USDA Mortgage Loans

What is a Kentucky USDA loan?

A Kentucky USDA loan is a home loan that gives significant benefits to those who want to buy a single-family primary residence in the eligible  rural development areas of Kentucky. The mortgage is backed by the U.S. Department of Agriculture and given through private financial institutions and straight through the USDA government itself with the Direct USDA loans.

For purposes of this article,  I will talk mainly about the Guarantee USDA Loan offered by lenders.

 USDA loans require no money down, and they are mainly for families/households making less than the following:


Income Limits – The Kentucky Rural Housing USDA program is intended to assist low and moderate-income Kentucky households, therefore to be eligible for a USDA loan, your household income may not exceed the moderate-income limits established for the specific county in which you are financing a home. you may view the eligibility requirements on this page of the USDA website:

 New Income limits for most counties (*) in Kentucky are $90,200 for a household family of four and household families of five or more can make up to $119,100. 

The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Bracken, Gallatin, and Pendleton are $99,000 for a household of four or less and up to $129,000 for a family of five or more.

What Kind of home loans are offered by USDA?

The loan program focuses on stimulating economic growth and rural development in the United States. You can get a USDA loan as a 30-year fixed-rate mortgage. They do not offer shorter term loans than 30 year fixed rates and can only be used to buy a home or refinance an existing USDA loan. 

You cannot take a cash out refinance or refinance another type of loan to a USDA loan.

Kentucky USDA loan eligibility and qualifying Guidelines

For you to qualify for USDA loans you should satisfy the income and credit requirements set by the USDA and financial institutions. To get a USDA mortgage:

You must be a U.S. citizen or have a permanent residence.

You should have a stable and sustainable income that should be consistent for two years. Does not have to be same job, but must have worked for the last two years with stable employment, meaning no job gaps, and reliable income

You should have an acceptable debt-income ratio that is determined and varies depending on the lender. Most lenders will use GUS, the Automated Underwriting Engine to determine your credit and income worthiness for a mortgage pre-approval. 

Your adjusted annual income should not be more than 115% of the region median income, according to your family’s size.

The property you are purchasing should be ineligible in suburban or in rural development areas and must be your primary residence. No rental properties or second homes allowed for this loan program. 

Manufactured homes that are not brand new from the dealer lot are not acceptable. 

The property must meet FHA appraisal guidelines. 

The USDA has not set any rules on the acceptable minimum credit score, although most lenders want a minimum score of 640 so that they can use the USDA Guaranteed Underwriting System. 

You can still be eligible for USDA loans with a credit score less than 640 but the file will need manual underwriting. 

On paper, USDA says they don't have a minimum credit score, but most lenders will want a 640 credit score and some going down to 620. The trick is getting it approved with the Automated Underwriting system with USDA and if the score is below 640, they make it very difficult to qualify for with a lot of added conditions. 


The USDA includes all the annual income of each adult member of your households when calculating the income limit even if they are not a part of the mortgage. USDA does not just look at your yearly earnings; the limit comprises the adjusted income after putting into account the allowable deductions such as medical expenses.

There are three USDA home loan options:

Direct loans- these are loans available for low and very low-income earners, and the USDA issues them. The earnings requirement varies with locations. The interest rate is also variable and with subsidies, it can go as low as 1% sometimes with the rate and costs being subsisted by the Gov't. They take on average 3-6 months to close and are for very low income. 

Home improvement loans and grants- these are financial awards or loans that allow homeowners to renovate and improve their houses. The package can come as a combination of a grant and a loan, that gives up to $27,500 as help.

Loan guarantees- these are loans available from local lenders and USDA guarantees the mortgage such that you will get a low mortgage interest rate with no money down. However, you will have to pay a mortgage insurance premium if you give little or no down payment.
The current mortgage insurance upfront is 1% and .35% monthly, which is very cheap when compared to FHA loans. 

Guaranteed vs. Direct USDA loan program.

The differentiating factor between the two loan options is who funds the loan. The USDA gives the direct loan and offers payment assistance through subsidies. However, with a guaranteed loan, a USDA-approved lender offers the loan.

The aim of the two loan programs is to make homeownership affordable for low to moderate-income households in rural development areas. There are multiple differences between the two loan options and they are designed for two different financial bodies. For instance, with the USDA direct loan you must meet the following requirements:

Kentucky Mortgage USDA loan rates

The primary determining element for the interest rates is your credit profile, loan amount, when you are closing, and the lender you choose. USDA does not set the rates, they're set by the lender.

It is crucial to note that the USDA does not set the interest rates. The participating lenders have the liberty to set their own rates, hence the quotes will vary depending on various factors.

Kentucky USDA Underwriting Process:

Does it take longer to close a USDA loan? 

The experience with the USDA loan process varies with each home buyer but the process basically includes:

Prequalification with a USDA verified lender through GUS automated engine. 

How to apply for a Kentucky USDA loan

In order to get you pre-approved for your max loan amount, I will need the following items from you. This is a free process and I will give you a copy of your credit report for free!

 

 

MORTGAGE PRE-APPROVAL CHECKLIST 

 

• Most recent 30 days of pay stub(s)
• W-2s and 1099's if applicable  for most recent two years
• 1040 tax returns for last two years 
• Most recent 60 days bank statements all pages
• Most recent 401(k)/retirement statement if applicable

 

Once I get the information above, I can usually get you pre-approved in one to two days, and get your loan closed in 30-45 days after you get an accepted offer on a home. Your first house payment usually starts 30-60 days after you close.

 

Your loan pre-approval is usually good for 120 days.

 

I don't need originals, copies are fine. You can fax or email  me the above documents,  or meet me face-to-face if you wish to make copies and go over your options.

 

Let me know your questions. 

 

Thanks and look forward to helping you. 

 

Joel Lobb


Mortgage Loan Officer


Individual NMLS ID #57916



American Mortgage Solutions, Inc.


10602 Timberwood Circle


Louisville, KY 40223


Company NMLS ID #1364



click here for directions to our office



Text/call: 502-905-3708



email: kentuckyloan@gmail.com



https://www.mylouisvillekentuckymortgage.com/

 

Mortgage Application Checklist of Documents Needed below  👇

W-2 forms (previous 2 years)
Paycheck stubs (last 30 days - most current)
Employer name and address (2 year history including any gaps)
Bank accounts statement (recent 2 months – all pages
Statements for 401(k)s, stocks and other investments (most recent)
federal tax returns (previous 2 years)
Residency history (2 year history)
Photo identification for applicant and co-applicant (valid Driver’s License







Joel Lobb (NMLS#57916)

Senior Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708

kentuckyloan@gmail.com


If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.


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#57916http://www.nmlsconsumeraccess.org/

NMLS Consumer Access for Joel Lobb 

Accessibility for Website 

Privacy Policy

---

 

Joel Lobb, American Mortgage Solutions (Statewide)

Joel has worked with KHC for 12 of his 20 years in the mortgage lending business. Joel said, “A lot of my clients would not have been able to purchase a home of their own or possibly delayed their purchase due to lack of down payment but with the $6,000 DAP loan program, this gets them into a house sooner and starts their path to homeownership while building equity instead of throwing their money away.”

When you’re ready to purchase a home in Joel's area, contact him at:
Phone: 502-905-3708
Email: Kentuckyloan@gmail.com
Website: www.mylouisvillekentuckymortgage.com

Can you do a USDA Loan or Rural Housing Loan on a manufactured home / mobile home in Kentucky?

MANUFACTURED HOMES AND KENTUCKY USDA LOANS FOR RURAL HOUSING REQUIREMENTS

Purchase of an eligible new unit, transportation and set-up costs, and purchase of
an eligible site if not already owned by the applicant. Manufactured units must be
less than 12 months old and never occupied and will include the site. The date of
the purchase agreement must be within one year of the manufactured date
displayed on the plat attached to the unit. The following criteria outlines an
eligible unit for guarantee with the SFHGLP:
 To be an eligible unit, the new unit must have a floor area of not less
than 400 square feet.
 The unit must meet the Federal Manufactured Home Construction and
Safety Standards (FMHCSS).
 The unit must be placed on a permanent foundation built to FHA
guidelines in effect at the time of certification. Guidelines are
presently published in the “Permanent Foundation Guide for
Manufactured Housing” (HUD-4930.3G) which is found at
http://www.huduser.org/portal/publications/destech/permfound.html.
 Certification the foundation design meets HUD Handbook 4930.3,
“Permanent Foundations Guide for Manufactured Housing
(PFGMH).” The foundation certification must be from a licensed
HB-1-3555
13-7
(03-09-16) SPECIAL PN
professional engineer, or registered architect, who is
licensed/registered in the state where the manufactured home is
located and must attest to current guidelines of the PFGMH. The
certification must be site specific and contain the engineers or
registered architect’s signature, seal and/or state license/certification
number.
 The manufactured home must be classified and taxed as real estate.
Lenders are responsible for ensuring the title has been purged and the
manufactured home has been officially converted from chattel to real
property, as state law allows.
 The mortgage must cover both the unit and its site.
 Purchase of a unit on hand that has not been installed, or occupied at any other
site or location. Manufactured units may be moved only from the manufacturers
or dealer’s lot to the site on which the unit will be guaranteed. This type of unit is
eligible as long as the purchase agreement is dated within 12 months of the date
the unit was manufactured. The date of manufacture is available on the factory
installed plate on the unit. Manufactured home units with a manufacture date
exceeding 12 months of the purchase agreement contract will be ineligible for a
guaranteed loan.
 The Agency will not guarantee the purchase of an existing manufactured home
that has been moved from another site.
 Alteration or remodeling of the unit when the initial loan is made (i.e. garages).
All alternations and modifications must meet FMHCSS.

13.7 LOAN RESTRICTIONS

The Agency will not guarantee loans to finance the following:
 The purchase of a site without also financing a new unit;
 A unit that does not meet FMHCSS;
 Repairs not associated with a transfer, Real Estate Owned (REO) sale, or unit that
is already financed with a Section 502 loan; or
HB-1-3555
13-8
 Furniture, including movable articles of personal property such as drapes, beds,
bedding, chairs, sofas, divans, lamps, tables, televisions, radios, stereo sets, and
other similar items of personal property. Furniture does not include wall-to-wall
carpeting, refrigerators, ovens, ranges, washing machines, clothes dryers, heating
or cooling equipment, or other similar equipment.
13.8 ADDITIONAL LOAN PROCESSING PROCEDURES FOR PROPOSED
CONSTRUCTION INVOLVING A NEW MANUFACTURED HOME
For the purpose of underwriting and for payment of the guarantee fee, a newly
constructed manufactured home is considered a purchase loan transaction and is subject
to the fee further outlined in Chapter 6 of this Handbook.
In addition to the documents required for a guaranteed loan, the lender must obtain
the following prior to loan approval. The documentation will be retained in the lender’s
permanent loan file. Lenders may utilize Attachment 13-A as an option in support of
applicable documentation.
 An itemized cost breakdown of the total package, including the base unit, eligible
options, site development, installation, set-up, lot costs, and any credit for wheels
and axles.
 A statement signed by the dealer indicating that any cash payment or rebate as a
result of the purchase will be deducted from the price of the unit and not paid to
the applicant.
 A statement signed by the dealer that the proposed cost is the full price of the unit
and if furniture is being purchased by the applicant with personal funds, that a
lien will not be filed against the security property.
 The label number of the unit shown on the FMHCSS data plate on the exterior of
each section.
 A signed statement by the dealer confirming thermal requirements in effect at the
time of purchase are met.

Site Requirements:
Located in rural area.
Contiguous to public street.
Streets to be paved or all-weather surface.
Site must not be large enough to subdivide.
Value of site must not exceed 30% of the as-improved market value of the property.
Finish grade beneath the home or the habitable floor, whichever is lower, must be above the 100 year flood plain.
Site must have adequate water and wastewater disposal systems.

Loan Purposes:

Purchase of an eligible site, if not already owned by the applicant.
Purchase of an eligible New manufactured unit, including transportation & set-up costs.
Reasonable site development work, i.e., foundation, driveway, walks, well, septic system, utility connections, etc.
Purchase of the unit and all development work must be done under a single contract.
Rural Development PA (5/08) (1)

Rural Development - Manufactured Housing Fact Sheet

Loan Limitations:

Existing units can not be purchased, only New manufactured units.
Sites can not be purchased without also financing the unit.
Units that do not meet FMHCSS and the Agency’s Thermal Performance Standards can not be financed.
Loan funds can not be used to finance furniture, including movable items of personal property, i.e., drapes, beds,
bedding, chairs, sofas, divans, lamps, tables, televisions, radios, stereo sets, etc.
Amortization period - 30 years.

Dealer-Contractor Participation in the Program:

A Dealer-Contractor may apply to participate by submitting Form RD 1944-5, "Manufactured Housing Dealer Contractor Application", to the Loan Originator in the Rural Development Area Office, along with a current financial statement prepared by a Public Accountant and certified by the Dealer-Contractor. A Dealer-Contractor must be able to provide the full service of sales, service, erection, and warranty of manufactured units and developing sites for them. To qualify to participate, a Dealer-Contractor must be:
 1. financially responsible,
2. qualified and equipped to set up the unit on a site-built permanent foundation and develop the site,
 3. willing to provide a Warranty acceptable to the Agency.
The Warranty must identify the unit(s) by serial number(s). The Dealer-Contractor must certify that the manufactured home/property substantially complies with the plans and specifications and that the
manufactured home sustained no hidden damage during transportation, and if manufactured in separate sections, that the sections were properly joined and sealed according to the manufacturer's specifications.

The Dealer-Contractor will also furnish the applicant with a copy of all Manufacturer's Warranties.
The attached "Dealer-Contractor Application - Processing Checklist" can be used to assemble information to be submitted to the local Rural Development Office for program participation.

To Qualify, the Rural Housing Applicant Must: Be income eligible, credit worthy and be in need of adequate housing. The applicant should refer to the Section 502 Housing Fact Sheet (available in any Rural Development Office) for specific eligibility requirements. The attached "Manufactured Housing 'Supplemental' Loan Application Checklist" itemizes some specific documents needed for a Manufactured Housing Loan Application.

GUS approval required. No manual underwrites allowed. 640 Credit score no bankruptice last 3 years or foreclosure last 3 years.
• Second review/signature of the property appraisal is required by USDA
• Refinances and  purchase loans. If a purchase must be brand new and from an approved USDA lender dealer
• Manufactured home must be existing construction (permanently affixed to the
foundation and titled as real estate).
•  2-4 unit properties located in a PUD are not allowed.
• No non-occupying co-borrower allowed
• No paying off debt to qualify allowed
• No Mortgage Interest Differential payment income allowed
•  Singlewide manufactured homes are not eligible
• Manufactured Housing Condo units eligible
• Manufactured Housing PUD units eligible
• In general, max two acres allowed, but up to five acres allowed only if appraisal
reflects no more than 40% land value
• Must meet all USDA agency requirements
• The following eligibility requirements must be met for all manufactured homes:
• Site development work must conform to standards imposed by the state and
local government.
• The manufactured home must have been built and installed in compliance with
the Federal Manufactured Home Construction and Safety Standards that HUD
established June 15, 1976 and additional requirements that appear in HUD
USDA Product Profile 11 of 46 03/30/17
Guidelines Subject to Change
regulations at 24 C.F.R. Part 3280 as evidenced by the presence of both a HUD
Data Plate and the HUD Certification Label (Tag). Manufactured homes built
prior to June 15, 1976 are ineligible.
• If the original or alternative documentation cannot be obtained for both the
Data Plate/Compliance Certificate and HUD Certification Label (tag), the loan
is not eligible.
• If the HUD tag is missing, a recent "HUD Certification Verification" letter
issued by the Institute for Building Technology and Safety (IBTS) or a copy of
the Data Plate from the In-Plant Primary Inspection Agency (IPI) or
manufacturer must be in the loan file.
• Additional property eligibility requirements for manufactured homes:
• The manufactured home must be secured by both the manufactured home and
the land and both must be classified as real property under applicable state law
and subject to taxation as real estate.
• The manufactured home must be attached to a permanent foundation system in
accordance with the manufacturer's requirements for anchoring, support,
stability, and maintenance. The foundation must be appropriate for the soil
conditions for the site and must meet local and state codes.
• The manufactured home must be attached to a permanent foundation system in
accordance with the manufacturer's requirements for support, stability, and
maintenance. The foundation must be appropriate for the soil conditions for the
site and must meet local and state codes.
• If the manufactured home was installed prior to October 20, 2008, the anchoring
system must comply with the manufacturer's design or a design by a licensed
(registered) professional engineer, otherwise, the anchoring system must comply
with HUD Codes.
• The manufactured home must be built on and remain on a permanent chassis
with the towing hitch, wheels and axles removed.
• Must be a 1-unit dwelling.
• Incomplete items, such as a partially completed addition or renovation, or
defects or needed repairs that affect safety, are not eligible until the work is paid
for and complete. Exceptions may be made for minor items that do not affect the
ability to obtain an occupancy permit – such as landscaping, a driveway, walkway
etc.
• The finished grade level beneath the manufactured home is at or above the 100-
year base flood elevation.
Manufactured Home Ineligible Property Types
• A manufactured home that is not titled as real estate.
• A manufactured home that was installed or occupied previously at any other site or
location. The home may only have moved from the manufacturer's or dealer's lot to
the current site of the home.
• Manufactured home is not classified and titled as real property at time of
application.

Joel Lobb (NMLS#57916)
Senior Loan Officer


American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3

Louisville, KY 40223
Company ID #1364 | MB73346


Text/call 502-905-3708
kentuckyloan@gmail.com

Kentucky USDA Mortgage Loan Requirements

Kentucky Rural Housing USDA loans require One of the biggest eligibility requirements is that the property be located in a designated rural area of Kentucky. 

You can use this map for Kentucky USDA Rural Housing Eligible Areas for 2023  below to determine if the property you have your eye on is eligible for a Kentucky USDA home loan.

Generally, these areas are outside of major metropolitan areas of Kentucky to include Jefferson County, Fayette County, and parts of Northern Kentucky are not eligible.  

There are some smaller towns like Frankfort, Richmond,  Winchester, Bowling Green, Paducah, Owensboro, Henderson and Radcliff that are not eligible for the USDA loan program--(see brown shaded areas on map link)

The second crucial element for qualifying or a USDA in Kentucky is the income limits. USDA income limits can’t make more than 115% of the median family household income for the area in which you wish you purchase the home.

With regard to income, the max DTI ratio is 29/41, meaning the housing payment can’t exceed 29% of gross monthly income and total liabilities can’t exceed 41% of income. You can go higher with an automated GUS approval. 

You must also occupy the property you’re buying – no second homes or investment properties are permitted. But manufactured homes are USDA eligible. And there area loan limits just like there are on conventional mortgages and FHA loans..

 The Kentucky USDA home loan program is not limited to just first-time home buyers. Repeat buyers are also eligible!

Types of Kentucky USDA Home Loans

The USDA home loan only comes in one flavor; a 30-year fixed-rate mortgage. Nothing fancy or exotic here to ensure borrowers don’t get into any trouble with an ARM.

The 15-year fixed also isn’t an option because such a loan would imply that the borrower could afford a conventional loan and not need to rely on the USDA and its zero down financing program.

However, you can use a USDA home loan to both purchase a new property or refinance your current mortgage under certain circumstances. But no cash out is permitted if you perform the latter.

There is a sister program known as the Section 502 Direct Loan Program that assists low- and very-low income borrowers by providing subsidies that lower monthly mortgage payments for a select period of time.

The income limits for this program are significantly lower than those for the main USDA loan program, but the benefits are pretty amazing. For example, you can obtain an interest rate as low as 1% and get a 38-year loan term.

Minimum Credit Scores for a Kentucky USDA Home Loan Approval

Technically, there is no minimum credit score required to obtain a USDA home loan. However, lenders often impose overlays over USDA guidelines to ensure the borrowers are creditworthy.

Generally, you’ll need a credit score of 640 or higher to get approved for a USDA loan, though it’s possible to go lower with an exception or a manual underwrite.

When doing a manual underwrite, you should have compensating factors (such as long-term employment, assets, decent income, positive rental history etc.) to allow for the lower credit score. Your mortgage rate will also be higher to account for increased risk.

Also note that a higher credit score may be required if your DTI exceeds the allowable ratios.

In any case, you should really try to attain much higher credit scores if you want to get any type of mortgage, and favorable terms on said loan.

As with any other mortgage, it’s advisable to check your credit several months in advance to ensure your credit is on good shape, and if not, take steps to improve it before applying.

Credit score over 680: 

Perform a basic level of underwriting to confirm the
applicant has an acceptable credit reputation. Perform additional analysis if the
applicant’s credit history has indicators of unacceptable credit as noted in Paragraph 10.7
of this Chapter.

Credit score 679 to 640:

 Perform a comprehensive level of underwriting.
Underwrite all aspects of the applicant’s credit history to establish the applicant has an
acceptable credit reputation. Credit scores in this range indicate the applicant’s
reputation is uncertain and will require a thorough analysis by the underwriter of the
credit to draw a logical conclusion about the applicant’s commitment to making
payments on the new mortgage obligation. The applicant’s credit history should
demonstrate his or her past willingness and ability to meet credit obligations.

Credit score less than 640:

 Perform a cautious level of underwriting. Perform a
detailed review of all aspects of the applicant’s credit history to establish the applicant’s
willingness to repay and ability to manage obligations as agreed. Unless there are
extenuating circumstances documented in accordance with this Chapter, a credit score in
this range is generally viewed as a strong indication that the applicant does not have an
acceptable credit reputation.

Little or no credit history: The lack of credit history on the credit report may be
mitigated if the applicant can document a willingness to pay recurring debts through
other acceptable means such as third party verification or cancelled checks. Due to
impartiality issues, third party verification from relatives of household members are not
permissible. Lenders can develop a Non-Traditional Credit Report for applicants who
do not have a credit score in accordance with Paragraph 10.6 of this Chapter.

An applicant with an outstanding judgment obtained by the United States in a
Federal court, other than the United States Tax Court, is not eligible for a guarantee
unless otherwise stated in this Chapter. 

Validating the Credit Score. 

Two or more eligible trade lines are necessary to validate
an applicant’s credit report score. Eligible trade lines consist of credit accounts
(revolving, installment etc.) with at least 12 months of repayment history reported on the
credit report. At least one applicant whose income or assets are used for qualification
must have a valid credit report score. 

Confirm the applicant has at least two eligible tradelines reported to the credit bureau.
The tradeline may be open, closed and/or paid in full by the applicant. Eligible tradelines
include:

 Loan (secured or unsecured);
 Revolving (generally a credit which is not repaid by a certain number of
installments);
 Installment credit (generally repaid through a specified number of
installments such as automobile, recreational vehicle, or student loans);
 Credit card (offered by banking institutions, commercial enterprises and
individual retail stores. Consumers make purchases on credit and if payment
is made within a stipulated period of time, no interest is charged);
 Collection (an account whereby an original creditor transfers an unpaid,
delinquent balance to a collection agency to retrieve any monies owed);
 Charge-off (is the declaration by a creditor that an amount of debt is unlikely
to be collected)
 Authorized user accounts may not be considered in the credit score and credit
reputation analysis unless the applicant provides documentation that they have
made payments on the account for the previous 12 months prior to

application. 

Indicators of unacceptable credit.

 Foreclosure within 3 years:
 Including pre-foreclosure activity, such as a pre-foreclosure sale or short sale
in the previous 3 years\
 Bankruptcy within 3 years:
 Chapter 7 bankruptcy discharged in the previous 3 years;
 An elapsed period of less than 3 years, but not less than 12 months, may
be acceptable if the applicant meets the criteria of Section 10.8 of this
Chapter.
 Chapter 13 bankruptcy that has yet to complete repayment (repayment plan in
progress) or has completed payment in the most recent 12 months.
 Plans that are completed for 12 months or greater do not require a credit
exception in accordance with Section 10.8;
\

Kentucky USDA  Home Loan Mortgage Insurance Costs

One of the upside of the USDA home loan is the fact that there’s an upfront guarantee fee that the borrower must pay. It is currently set at 1.0% of the loan amount, and .35% monthly mi premium called the annual fee, which is much cheaper than FHA and Conventional loans on lower credit scores. 

This can be financed into the loan amount so it’s paid off over time, as opposed to upfront out-of-pocket at closing. And if the USDA guarantee fee is financed the LTV can exceed 100%.

Refinancing a Kentucky USDA Home Loan

It’s also possible to refinance an existing USDA home loan into another USDA loan, and actually quite easy thanks to a streamlined program that doesn’t require an appraisal, credit report, or a debt-to-income calculation.

The only requirement is that you must have been current on your mortgage for the past 12 months, and it must lower your interest rate by at least 1%. 

There is also a non-streamlined USDA refinance option that requires an appraisal to gain approval, but allows you to roll closing costs into the new loan.

Kentucky Rural Housing USDA Home Loan Frequently Asked Questions

Do I need to make a down payment on a USDA home loan?

No, you can obtain 100% financing with a USDA loan, which is the main draw of the program. The only other government housing loans that provide zero down financing are VA mortgages.

What credit score do I need to get a USDA loan?

You need a 640 credit score to get an automated approval for a USDA loan, but some lenders will go to 581 with expensive pricing adjustments. If you have bad credit, you may want to take a hard look at your credit history and clean it up as much as possible before applying.

Do I need two years of job history to get approved for a USDA loan?

Not necessarily. If you’re new to the workforce or returning after a reasonable and explainable absence and likely to continue working it may be permitted.

Can I get a USDA loan if I’m self-employed?

Yes, but you’ll need to provide two years of tax returns to ensure it is stable and in the same line of work.

Are USDA mortgage rates high or low?

They’re generally pretty low relative to conventional mortgage rates (Fannie and Freddie) and pretty close to FHA mortgage rates. If an FHA 30-year fixed is 4.5%, the USDA 30-year fixed rate might be 4.5%. In other words, they’re low and competitive.

But you have to factor in the upfront and monthly mortgage insurance premiums as well.

Additionally, USDA loan rates can’t be more than 1% above the current Fannie Mae yield for 90-day delivery for 30-year fixed rate conventional loans. This regulates how high the rate can be based on the market average.

What loan types are available via the USDA loan program?

Just the 30-year fixed. No adjustable-rate mortgages and no other fixed products are available. Additionally, balloon mortgages and interest-only mortgages aren’t permitted, nor are prepayment penalties.

Can you buy a condo with a USDA home loan?

Yes, but it must be on the approved list from Fannie/Freddie, the FHA, or VA, and it must be located in a rural area.

Can I get a USDA loan on a second home or investment property?

No, USDA loans are only available on owner-occupied primary residences.

Can I get cash out via a USDA loan?

No, only rate and term refinances are available, along with purchase financing.

Can I roll closing costs into a USDA loan?

Yes, as long as the property appraises for more than the purchase price and the DTI isn’t exceeded as a result. You can also use seller concessions or a lender credit to cover closing costs.

Is there mortgage insurance on a USDA loan?

It’s technically called a guarantee fee, and includes both an upfront fee at closing (that can be financed) and a monthly fee that is ongoing.

!

How long does it take to get a USDA loan in Kentucky?

Like all other mortgages, it depends on your specific scenario, but the USDA loan approval process does require an extra step in sending the loan to the USDA for final approval. They basically check the lender’s work before they allow them to fund the loan. This step can add an extra few days to few weeks (or more) onto your closing date, so beware!

On average it takes 30-45 days to close a USDA loan in Kentucky, so about the same as any other government-backed mortgage loan like FHA, VA KHC etc. 

Kentucky USDA Rural Housing Map Below:👇 Click on link below to see if the home is located in a Rural Housing Area.

https://rdgdwe.sc.egov.usda.gov/eligibilitymaps/index.jsp?

Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708
kentuckyloan@gmail.com

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

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#57916http://www.nmlsconsumeraccess.org/