Kentucky USDA Underwriting Guideline Updates

 Chapter 11- Ratio Analysis

11.2 B. The Total Debt Ratio:

 Revolving accounts: “with no outstanding balance” are not required to be closed.

 Mortgages: Rental Property - Eliminated language regarding omission of mortgage

debt. Guidance for entry of rental income in GUS is provided in the GUS Lender

User Guide under 4.1.4.1.1, Retained Investment Properties.

 Added: Debt management plans:

o Include the monthly payment amount due from the counseling plan.

o Refer to Chapter 10 for guidance on credit exception and documentation

requirements.

 Student Loans: Removed the phrase “the greater of” from Non-Fixed payment

loans and added guidance regarding “when the payment is above zero” and “when

the payment is zero”.

2

11.3 DEBT RATIO WAIVERS AND COMPENSATING FACTORS

A. Purchase Transactions: Debt ratio waivers

 GUS Refer, Refer with Caution, and manually underwritten loans without GUS

assistance:

o Added: “The lender must document compensating factors to support a

debt ratio waiver.”

o Added: “all” of the following conditions are met to the first paragraph.

 Debt Ratio Waiver Request and Agency Approval:

o Added: “The issuance of the Conditional Commitment for a Loan Note

Guarantee represents Agency approval of the ratio waiver.”

B. Refinance Transactions: Debt ratio waivers

 Added a bullet: GUS files that receive a GUS recommendation of Refer or Refer

with Caution are not supported by GUS, require debt ratio waivers, and supporting

documentation must be submitted to the Agency.

 Added: “The issuance of the Conditional Commitment for a Loan Note Guarantee

represents Agency approval of the ratio waiver”.

11.7 OBLIGATIONS NOT INCLUDED IN DEBT-TO-INCOME RATIOS

 Added: "unless a payment plan is in place" to the second bullet concerning

Federal, state, and local taxes.

Location: 10602 Timberwood Cir #3, Louisville, KY 40223, USA

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