How to get a USDA Rural Housing Loan in Kentucky?

How to Qualify for a USDA Rural Housing Loan in Kentucky 

Are you looking to buy a home in rural Kentucky with no down payment? A USDA rural housing loan could be your path to homeownership. This comprehensive guide covers everything you need to know about qualifying for USDA mortgage loans in Kentucky. It includes information on income limits, credit requirements, and the application process.

In this article, I will walk you through everything you need to know about qualifying for a USDA loan in Kentucky, the types of loans available, income limits, credit score requirements, and how to apply.

 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 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. 

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

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans

 Website: www.mylouisvillekentuckymortgage.com
 Address: 911 Barret Ave., Louisville, KY 40204

---

Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

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.

The USDA Rural Housing Loan Program, also known as an RHS loan, provides an affordable path to homeownership with zero down payment. This government-backed mortgage program is ideal for low-to-moderate-income families in Kentucky who want to purchase a primary residence in eligible rural areas.

In this guide, we’ll walk you through everything you need to know about qualifying for a USDA loan in Kentucky, the types of loans available, income limits, credit score requirements, and how to apply.

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 Rural Development Mortgage Guidelines

Kentucky Rural Development Mortgage Guide 

30 year fixed rate only for Purchases and Existing USDA loans Refinances.
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

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!

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

 

 

Text/call 502-905-3708

kentuckyloan@gmail.com

 

 

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.

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: USDA Proposed Rule – Significant Derogatory Credit...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: USDA Proposed Rule – Significant Derogatory Credit...:   

On September 19, 2024, a  Proposed Rule  was published in the Federal Register to amend the Single-Family Housing Guaranteed Loan Program ...

-  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Joel Lobb Mortgage loan officer COMPANY NMLS# 1738461   PERSONAL NMLS# 57916

Kentucky USDA Rural Housing Mortgage Qualifying Guidelines for 2024

ENTUCKY USDA RURAL HOUSING UNDERWRITING GUIDELINES Kentucky Rural Development Mortgage Guide No Down Payment Required, Zero NADA! – Kentucky Rural Housing USDA loans allow someone to buy a home without putting any money down. Lower Mortgage Insurance costs – Mortgage Insurance, is much lower on KY USDA loans than on FHA This can save you a lot of money. Would You Like to Get Prequalified or Apply For a Kentucky USDA Loan Now Property Eligibility – The home you want to finance with a KY USDA loan must be an eligible property. The property must be located in a rural area which is generally defined to have the following characteristics: Under certain conditions, towns and cities with populations between 10,000 and 25,000. The USDA makes the eligibility determination, which may be verified at the following link: http://eligibility.sc.egov.usda.gov/e.... Job History – Similar to all other mortgage loans, a two year employment history is required. You must show that you have been consistently employed for the past two years in order to qualify for Kentucky USDA financing; however in certain circumstances a small gap in employment may be permitted with a reasonable explanation. Additionally, if you have just completed schooling or military service and are newly employed but do not yet have a 2 year history, your income may also be eligible. 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: https://kentuckyusdaloan.com/check-pr...

DTI Ratio or debt to income ratios. One of the main criteria in determining if you will be approved or not is your debt-to-income ratio. While you must not make too much money, you also must not have too much debt. Your debt-to-income ratio is how much monthly debt you have (only those debts which show on your credit report are counted) compared to your qualifying income. Credit Score – The minimum credit score for a Kentucky USDA Mortgage Loan goes down to a 581 credit score, however most loans get approved at 640 or higher .varies from lender to lender, but most want to see at least a 640 credit score for you to be approved. Mortgage Insurance – USDA loans have their own version of mortgage insurance. It is called the “Guaranteed Fee” and works similarly to FHA loans which have an upfront and monthly mortgage insurance premium (MIP). With USDA loans, there is a 1.00% upfront guarantee fee which may be financed on top of your loan, and a 0.35% annual guarantee fee that is divided into 12 payments each year. The amount of your annual fee (paid monthly) adjusts each year and goes down as your loan balance does. Use our USDA calculator to get an idea of what your monthly payment will be Joel Lobb is a Licensed Mortgage Originator: NMLS #57916. State of Kentucky Only Mortgage Loans!! Legal Disclaimer This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans. All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines American Mortgage Solutions, Inc. 10602 Timberwood Circle Suite 3 Louisville, KY 40223 Company ID #1364 | MB73346 Text/call 502-905-3708 kentuckyloan@gmail.com Equal Opportunity Lender http://www.nmlsconsumeraccess.org/ 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. Kentucky USDA Rural Development Links Below for Qualifying: https://kentuckyusdaloan.com/income-l... https://kentuckyusdaloan.com/check-pr... https://kentuckyusdaloan.com/2018/12/... https://kentuckyusdaloan.com/category... https://kentuckyusdaloan.com/2018/10/...

No Credit Score USDA Borrower in Kentucky

 Kentucky Rural Housing USDA Borrower with No Credit Score

Question:

My USDA client has no credit score and filed Chapter 13 in 2019. Would USDA accept this?

Answer:

USDA allows no-score Borrowers, so this file would be a manual underwrite. You will need to build a non-traditional credit and also meet all of the manual underwriting requirements.

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.

References:

HB-1-3555 Attachment 10-A

4000.1 II.A.5

Joel Lobb  Mortgage Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708
fax: 502-327-9119
email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574
Get Approved Now Click Here

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).

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.

August 16, 2023

USDA Proposed Rule - Manufactured Housing Provisions

On August 16, 2023, a Proposed Rule was published in the Federal Register seeking comments on proposed changes to Handbook 1-3550 and Handbook 1-3555 that would make existing manufactured homes, which meet specific criteria, eligible for financing.

Used manufactured homes and mobile homes used Kentucky USDA loan may be possible in near future for the Kentucky USDA Rural Housing Loan Program.

In addition, the proposal reduces regulatory burdens related to manufactured housing requirements and provides flexibilities for energy efficient manufactured and modular homes located in land lease communities operating on a non-profit basis.

Comments on the proposed rule must be received on or before October 16, 2023. Comments are invited through the Federal eRulemaking Portal at www.regulations.gov.

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