100 percent Financing Kentucky USDA Rural Development Loans

Kentucky Rural Housing Loans 

USDA home loans in Kentucky are also known as the Rural Development Loan or RHS Loans. It is one of the best options for homebuyers that are currently looking for a home outside the urban areas of Lexington, Louisville, Bowling Green and Northern Kentucky that requires No Money Down. 

Another major advantage of this home loan is it’s fixed interest rate.  The fixed interest rate insulate buyers from interest rate fluctuations. You’ll have the same monthly loan repayment throughout the life of your loan.

100 percent Financing Kentucky USDA Rural Development Loans will allow you to roll up some of your closing cost into your monthly mortgage. While it is impossible to avoid closing costs of the home purchase, it is possible to have the seller pay for some of these cost and or arranged for them to be added to your total loan with minimal impact on your monthly payments.

Eligibility for Kentucky USDA Loans

When applying for eligibility for 100% USDA loans, there are six factors taken into account:

• Loan income restrictions  see map ⬇️

• http://www.rd.usda.gov/files/RD-GRHLimitMap.pdf

• Credit score You have three credit scores, they throw and the high and low score and take the middle score of each of the three main credit bureaus, Experian, Equifax, and Transunion. Most lenders will want a 620 middle credit score due to the fact that GUS (Guaranteed Underwriting System) will not give you an automated approval upfront if the middle score is below the 640 thresholds. You may get a refer eligible on the initial pre-approval but a lot of lenders will not honor a refer eligible USDA file. On paper USDA says they will go down to a minimum credit score of 581 but most lenders will not touch them. 
• 
  
• Property Ownership (Do you own other Property) In most cases, USDA will not allow you to use their program to purchase another home if you already have a home in your name. In some extreme cases, they will waive this if certain exceptions are met. You can call or email me for more details on this matter. The USDA loans are only available for single family primary residences. No rental homes or working farms are allowed on the USDA Home Loan Program
• Residential Location (USDA Eligibility:  to check click here ) Is the property located in a Eligible area. See link above for eligibility boundaries for counties in Kentucky
• Debt to Income Ratios: If your credit score is above 640, GUS will typically limit your back-end ratio to 45% of your total gross income. The front end ratio, or the housing ratio, usually is centered around 30% to 35% range, with compensating factors such as assets or money in bank to cover your new house payment, disposable income, high credit scores, and no rent payment shock. Rent payment shock is where your new house payment is much larger than your current rent payment. This only comes into play on lower credit scores.
• Assets I have noticed that with 3 or 4 months reserves you can typically get a loan approved with lower credit scores with payment shock on the new loan. Additionally, if you have access to 20% down payment in your checking or savings account, they will make you use your own money. If the money is in a 401k or other tax deferred savings accounts this will not factor in and you can use the USDA loan program.
• I can explain this more in detail if you want to call or email me. 

Look-up tool to determine if a Kentucky property is eligible for No Money Down USDA financing-

https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

👇

Look-up tool to determine maximum household income limits for a Kentucky County

👇

http://eligibility.sc.egov.usda.gov

Joel Lobb  Mortgage Loan Officer

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916,

 (www.nmlsconsumeraccess.org).

Kentucky USDA’s Direct Home Loan Program

USDA’s Direct Home Loan Program

• USDA Direct Housing Loans are less common than USDA Loan Guarantee Program loans and are only available for low and very low income households to obtain home ownership, as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. For these types of Rural Housing Loans, a borrower must contact the local USDA office directly.

USDA Rural Development has funding available for very low- and low-income individuals and families seeking to purchase or repair a home in a rural area.

USDA’s Direct Home Loan Program offers financing to qualified very-low and low-income applicants that are unable to qualify for traditional financing. No down payment is required, and the interest rate could be as low as one percent with a subsidy. Applicants must meet income and credit guidelines and demonstrate repayment ability. Generally, rural areas with a population less than 35,000 are eligible.

The maximum loan amount for repair is $20,000 at a one percent interest rate, repayable for up to 20 years. Grants of up to $7,500 are available to homeowners 62 and older and must be used to remove health or safety hazards, such as fixing a leaking roof, installing indoor plumbing, or replacing a furnace.

502 Direct USDA Loan in Kentucky:

There are two types of Kentucky USDA Rural Housing Home loans available to rural Kentucky Home buyers through Rural Development:

Direct homeownership loans and guaranteed home ownership loans.

Let’s first look at the 502 Direct USDA Loan in Kentucky

502 Direct USDA Loan in Kentucky:

With a Kentucky  Direct Loan 502, the applicant applies directly to the USDA office serving their location in Kentucky. There are about 13  different locations . They  lend the money direct from USDA , 100 percent financing, for the low rate currently at 3 percent on a 33 year term.

For a direct home loan, the purchase, construction, repair and rehabilitation of a single family home in rural areas must be used for the applicant’s permanent residence. “For manufactured housing, only new construction can be funded,” he explained.

Credit scores of 640 or greater are typically acceptable with a minimum number of trade lines (2 usually for 12 months can be opened or closed) that have been open and active.

No down payment typically is required- Loans may be up to 100 percent of the appraised value. Homebuyer education is required prior to closing for the Direct USDA Loan 502 program

Mortgage payments are based on what the applicant can afford to pay. USDA offers payment assistance/subsidies to make it affordable. When you go to payoff the USDA Direct loan, you may incur a subsidy recapture fee. 

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There are two types of Kentucky USDA Rural Housing Home loans available to rural Kentucky Home buyers through Rural Development:

Direct homeownership loans and guaranteed home ownership loans.

Let’s first look at the 502 Direct USDA Loan in Kentucky

Single Family Housing Direct Loans USDA Mortgage Rates Currently

 

SFH Direct Loan and Grant Programs August 18, 2022 Interest Rate Increase for SFH Direct Programs   Programs Current Interest Rate Interest Rate Effective September 1, 2022 Rural Housing (RH) 502 Very-Low or Low 3.25% 3.50% Single Family Housing (SFH) Non-Program 3.75% 4.00% Rural Housing Site (RH-524), Non-Self-Help 3.25% 3.50%     Program Information Single Family Housing Direct Loans Single Family Housing Repair Loans and Grants Mutual Self Help Housing Technical Assistance Grants   Signup for SFH emails (Direct and GRH) GovDelivery

 

How to Apply & Get Approved for The Kentucky USDA Direct Home Loan 502 Program Video

Who can apply for this program?

A number of factors are considered

when determining eligibility for

Single Family Direct Home Loans. At

a minimum, applicants must have an

adjusted income that is at or below

the applicable low-income limit for the

area in which they wish to buy a house

(an income limit map is available at

this link: https://go.usa.gov/xzcfb). They

must also demonstrate a willingness

and ability to repay debt.

Applicants must:

• Be without decent, safe, and

sanitary housing

• Be unable to obtain a loan from

other resources on terms and

conditions that can reasonably be

expected to be met

• Agree to occupy the property as

their principal residence

• Have the legal capacity to incur a

loan obligation

• Meet citizenship or eligible

noncitizen requirements

• Not be suspended or debarred from

participation in federal programs

Properties financed with direct loan

funds must:

• Be modest in size for the area

• Not have market value in excess of

the applicable area loan limit

• Not be designed for income producing activities

Borrowers are required to repay all or a

portion of the payment subsidy received

over the life of the loan when the title to

the property transfers, or the borrower

is no longer living in the dwelling.

Applicants must meet income

eligibility for a direct loan.

 You can

visit the USDA Income and Property

Eligibility website 

: https://www.rd.usda.gov/

browse-state) to learn more.

What is an eligible area?

Properties must be located in an

eligible rural area. Visit the USDA

Income and Property Eligibility

website (available at this link:

https://go.usa.gov/xzcdM) for details.

How can funds be used?

Loan funds can be used to help

low-income people or households

buy homes in rural areas. Funds can

be used to build, repair, renovate, or

relocate a home, or to purchase and

prepare sites, including providing

water and waste treatment equipment.

How much can I borrow?

The maximum loan amount an

applicant qualifies for depends on

their ability to repay a loan. Rural

Development considers various factors,

such as income, debts, assets, and

the amount of payment assistance

the applicant is eligible to receive.

Regardless of repayment ability,

applicants can never borrow more

than the area loan limit (plus certain

other costs eligible to be financed)

in the county in which the property is

located (information is available at this

link: https://go.usa.gov/xzcGB - PDF)

Rural Home Loans (Direct Program)

What is the interest rate and
payback period?

• The interest rate is fixed, and based

on current market rates at loan

approval or closing, whichever is lower.

• When modified by payment

assistance, the monthly mortgage

payment can be reduced to a low as

an effective 1 percent interest rate.

• The payback period is 33 years

(38 years for very-low-income

applicants who can’t afford a

33-year loan term).

How much down payment
is required?

Down payments are not typically

required, but applicants with assets

higher than the asset limit can be

required to use a portion of those assets.

Is there a deadline to apply?

Applications are accepted year-round

through your local Rural Development

office. A map is available at this link:

https://www.rd.usda.gov/browse-state.

How long does an application take?

Processing times vary depending

on funding availability and program

demand in the area in which the

applicant is interested in buying.

Processing times also are dependent

upon the completeness of the

applicant’s package.

https://www.rd.usda.gov/sites/default/files/fact-sheet/508_RD_FS_RHS_SFH502Direct.pdf

USDA Updates Guidance for Direct Loan Borrowers Impacted by COVID-19

 

SFH Direct Loan and Grant Programs Monday, September 27 USDA Updates Guidance for Direct Loan Borrowers Impacted by COVID-19 PURPOSE The purpose of this notice is to announce the removal of the September 30, 2021 deadline for COVID-19 impacted Direct Loan borrowers to request mortgage payment assistance.  Direct Loan Borrowers may request assistance until the end of the National Emergency is declared Mortgage (Payment) Forbearance Guidance: Borrowers who experience financial hardship due, directly or indirectly, to the COVID-19 emergency may request and be granted an initial forbearance until the end of the National Emergency is declared. The initial forbearance period may be up to 180 days and the borrower may request an extension of up to an additional 180 days. Borrowers who received an initial CARES Act forbearance may be granted up to two additional three-month payment forbearances.  The borrower must request each extension individually. Borrowers who received a COVID-19 forbearance under this guidance may have the interest waived that accrues on missed payments during the forbearance period. Loans may be reamortized at the conclusion of the forbearance. The term of the initial forbearance and any extension may be shortened at the borrower’s request. For more information on USDA Rural Development’s actions to support customers directly impacted by COVID-19, visit https://www.rd.usda.gov/coronavirus.

Kentucky USDA Rural Development has funding available for very low- and low-income individuals and families considering purchasing or repairing a home in a Kentucky USDA rural area.

Kentucky USDA Rural Development has funding available 

The Direct Home Loan program offers financing to qualified very low- and low-income applicants who are unable to qualify for traditional financing. No down payment is required, and the interest rate could be as low as 1 percent with a subsidy. Applicants must meet income and credit guidelines and demonstrate repayment ability.

The program is available in rural communities of generally 35,000 people or less.

The maximum loan amount is $20,000 at a 1 percent interest rate, repayable for a 20-year term and can be used to improve or modernize homes and do essential repairs. Grants of up to $7,500 are available to homeowners 62 and older and must be used to remove health or safety hazards, such as fixing a leaking roof, installing indoor plumbing, or replacing a furnace.

Time is limited to receive funds for the current fiscal year. Contact a USDA Rural Development Housing specialist to see if you qualify. USDA Rural Development loans and grants provide assistance that supports infrastructure improvements; business development; housing; community services such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit www.rd.usda.gov/. USDA is an equal opportunity provider, employer, and lender.

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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

fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

 

Single Family Housing USDA Direct Mortgage Loan Program Rates for March 2020

Interest Rate Decrease for Kentucky Rural Housing  USDA Direct Programs March 19, 2020 Programs Current Interest Rate Interest Rate Effective April 1, 2020 Rural Housing (RH) 502 Very-Low or Low               3.000%                               2.750% Single Family Housing (SFH) Non-program               3.500%     3.250% Rural Housing Site (RH-524), Non-Self-Help               3.000%     2.750%

Kentucky Guaranteed Loans vs. Kentucky Direct Loans by USDA

KY Interest Rate Decrease for Single Family Housing Direct Program













The following interest rates will be effective March 1, 2019:














For Program Information







Single Family Housing Direct Loans








Single Family Housing Repair Loans and Grants








Mutual Self Help Housing Technical Assistance Grants













Kentucky Guaranteed Loans vs. Kentucky Direct Loans by USDA







Everyone wants to own a home, but what if you don’t have enough cash to do so? Does that mean you’ll have to spend all your life in a rented apartment? Not any more, buying a home has become easier than ever. Kentucky USDA home loans support people from all income groups and help them buy safe and decent dwellings. Various loan programs are offered by USDA and you should know the basic characteristics that make them unique.







The basic types of loans offered by USDA are:

Kentucky Rural Housing USDA Guaranteed Home Loans

USDA Direct Home Loans (also known as Section 502 Loans)

Rural Repair and Rehabilitation Loan







The most common among these are the ‘Guaranteed loans’ and ‘Direct Loans’. Many people are unaware of the differences between the two loan programs, so mix up both of them. There are key differences between the two loan programs, which should be known clearly in order to get maximum benefits. We’ll help you understand the basic differences between the two.







Kentucky Guaranteed Loans vs. Kentucky Direct Loans by USDA

Income Limits

KY Guaranteed Loans: This is designed for people belonging to the moderate income groups. Ideally the income of the applicant should be 115% of the AMI (area median income).

KY Direct Loans: This is specially designed for those who have low income, ideally 50% to 80% of the AMI.

Source of Funding

Kentucky Guaranteed Loans: USDA approved 3rd party lenders offer funding for those applying for guaranteed home loans. The government secures these loans so that there are no risks involved for the lender.

Kentucky Direct Loans: Section 502 loans are directly approved by the Government and no 3rd party lenders are involved. This means if you want to get a direct loan, you have to visit to local USDA office.

Credit Requirements

Guaranteed Loans: USDA has credit standards of its own, but since the funding will be approved by lenders, you might have to qualify for the credit standards of the lender as well. Lender requirements are – a minimum credit score of 581 with no bankruptcy and foreclosures, debt to income ratios should be 29/41. The lender can ease these if you have an excellent credit history. All USDA Mortgage loans are ran through GUS, to determine the credit, income, assets risk of the mortgage loan approval.

Direct Loans: Though there are no strict credit guidelines, you have a decent credit score and should be able to prove that you have the ability to repay the loan. People applying for Direct loans from USDA should be unable to get finding from other sources.

Loan Terms

Guaranteed Loans: Loans are available at a fixed rate for 30 years. The interest rates are not set by the USDA; the lender would decide the interest rate depending upon various factors.

Direct Loans: You can take the loan for 33years or 38years. 33 years loan term is available for those whose income is above 60% of the AMI. For manufactured loans, you get a loan term of 30 years. The government sets the interest rates for Direct home loans, unlike guaranteed loans.

Benefits of the Loan programs

Guaranteed Loans: The main benefits of the guaranteed home loans are:

There is no maximum purchase limit

You get 100% financing

Various types of properties are covered under this loan plan

Closing costs and lender fees can be included into the loan itself

Concessions in form of gift funds, grants, etc are allowed

Direct Loans: The best benefit that this loan program offers is homeownership for people with low monthly income, which would otherwise remain a dream.







Now that you know the difference between the two, you are in a better position to know which one suits you better. With our guidance and expert assistance, you can find the USDA loan that meets your needs the best. So, get in touch with us today!

Kentucky Mortgage USDA Loan Requirements

Kentucky Mortgage USDA Loan Requirements

What are the Kentucky USDA Mortgage Loan Requirements?

To decide if you qualify for an USDA Mortgage Loan, we will look at:

•Your income and your monthly expenses. Standard debt-to-income ratios are 29/41 for USDA Loans. These ratios may be exceeded with compensation factors.

•Your credit history (this is important, but USDA’s credit standards are flexible). A FICO score of 620 or above is required for all loans

•Your overall pattern rather than to individual problems you may have had.

To be eligible for an USDA mortgage, your monthly housing costs (mortgage principal and interest, property taxes and insurance) must meet a specified percentage of your gross monthly income (29% ratio). Your credit background will be fairly considered. At least a 620 FICO credit score is required to obtain an USDA approval through Lending. You must also have enough income to pay your housing costs plus all additional monthly debt (41% ratio). These percentages may be exceeded with compensating factors. Applicants for loans may have an income of up to 115% of the median income for the area. Maximum USDA Loan income limits for your area can be found at here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.

CHANGE TO ANNUAL USDA GUARANTEE FEE STRUCTURE and CHANGE IN ELIGIBILITY MAPS As announced in RD AN No. 4757, the annual guarantee fee structure (paid monthly from the borrower’s escrow account) for purchase and refinance loans will increase as follows (no change to the one-time upfront fee at this time):

Can I get an USDA Mortgage Loan after bankruptcy?

Criteria for USDA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for three years or more, you are eligible to apply for an USDA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an Kentucky USDA loan application.

What are the USDA Down Payment Requirements?

USDA Mortgages have no down payment requirement. Other loan programs don’t allow this.

What types of property are eligible?

While USDA Mortgage Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and single family residences.

What is the maximum amount that I can borrow?

The maximum amount for an Kentucky USDA Mortgage Loans are determined by:

Maximum loan amount: The is no set maximum loan amount allowed for an USDA Mortgage. Instead, your debt-to-income ratios will dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Loan income limits for your area can be found at here.

Maximum financing: The maximum USDA Mortgage amount will be 100% of the appraised value of the home.

What kinds of loans does USDA offer?

Fixed rate loans – All USDA loans are fixed-rate mortgages. In a fixed rate mortgage, your interest rate stays the same during the whole loan period, normally 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your monthly payment will be, and you can plan for it.

What is Considered a Rural Area by the USDA?

Rural areas include open country and places with population of 10,000 or less and—under certain conditions—towns and cities. There is an automated rural area eligibility calculator at:http://eligibility.sc.egov.usda.gov.

Kentucky USDA Loans

What are USDA Home Loans?

USDA stands for United States Department of Agriculture. A USDA Mortgage provides a low-cost insured home mortgage loan that suits a variety of options. A USDA mortgage is likely the best home loan option if you want to purchase a home with no down payment. If you’re unsure about your credit rating, or have concerns about a down payment when you’re doing a home loan comparison, ENG Lending’s USDA Rural Mortgage Loans can give you piece of mind with zero-down, super low closing costs and no monthly mortgage insurance.

What Types of Loans does USDA offer in Kentucky?

Currently, there are two kinds of USDA Home Loans available in Kentucky for single family households:

USDA Guaranteed Rural Housing Loans

USDA Guaranteed Home Mortgage Loans are the most common type of USDA Loanin Kentucky and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. Area income limits for this program can be viewed here. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate.

USDA Direct Rural Housing Loans

USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain homeownership, as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to see area income limits for this program.

What factors determine if I am eligible for a USDA Loan in Kentucky?

To be eligible for A USDA Rural Loan in Kentucky, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (29% ratio). Your credit background will be fairly considered. A 620 FICO credit score is required to obtain a USDA Rural Housing Loan approval through ENG Lending. You must also have enough income to pay your housing costs plus all additional monthly debt (41% ratio). These ratios can be exceeded somewhat with compensating factors. Applicants for loans may have an income of up to 115% of the median income for the area. Maximum USDA Guaranteed Loan income limits for your area can be found at here. Maximum USDA Direct Loan income limits for your area can be found at here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.

What is the maximum amount that I can borrow?

The maximum amount for an USDA home loan is determined by:

Maximum Loan Amount: The is no set maximum loan amount allowed for USDA Rural Home Loans. Instead, your debt-to-income ratios will dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for your area can be found at here.

Maximum financing: The maximum USDA Rural Development Loan amount is 102% of the appraised value of the home (100% plus the 2% USDA RD Loan guarantee fee).

How much money will I need for the down payment and closing costs?

USDA Rural Development Mortgage Loans require no down payment and they allow for the closing costs to be included in the loan amount (appraisal permitting).

What property types are allowed for USDA Rural Loan Mortgages?

While USDA Mortgage Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and single family residences.

if you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.

 

 

 

 

 

 

 

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

 

Text or call phone: (502) 905-3708

 

email me at kentuckyloan@gmail.com

 

 

 

http://www.mylouisvillekentuckymortgage.com/

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only.  The posted information does not guarantee approval, nor does it comprise full underwriting guidelines.  This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the views of my employer. Not all products or services mentioned on this site may fit all people

Fill out my form! 

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Posted By Blogger to Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage at 5/01/2017 08:02:00 AM