Chapter 13 bankruptcy can impact your ability to qualify for various Kentucky mortgage loan programs like FHA, VA, USDA, and Fannie Mae

.Here are the details for each program regarding waiting times, credit score requirements, down payment, and qualification criteria after a Chapter 13 bankruptcy:

1. Kentucky FHA Loan after Chapter 13 Bankruptcy:

   • Waiting Time: Typically, you'll need to wait at least two years after the discharge date of your Chapter 13 bankruptcy before applying for an FHA loan.
   • Credit Score: FHA loans are known for their flexibility with credit scores. While there's no specific minimum score, a higher score (usually around 580 or above) can help you qualify for better terms.
   • Down Payment: The down payment requirement for an FHA loan after Chapter 13 bankruptcy is relatively low, usually starting at 3.5% of the purchase price.
   • Qualification with Chapter 13 Bankruptcy: To qualify, you must demonstrate that you've made all Chapter 13 payments on time for at least one year and receive approval from the bankruptcy court to take on new debt.

2. Kentucky VA Loan after Chapter 13 Bankruptcy:

   • Waiting Time: The waiting time for a VA loan after Chapter 13 bankruptcy is generally two years from the discharge date.
   • Credit Score: VA loans also have flexible credit score requirements, with many lenders looking for scores around 620 or higher.
   • Down Payment: VA loans are known for offering zero-down financing, but eligibility depends on your military service record and whether you've used your VA loan benefits before.
   • Qualification with Chapter 13 Bankruptcy: Similar to FHA, you'll need to demonstrate a consistent payment history under your Chapter 13 plan and receive approval from the bankruptcy court.

3. Kentucky USDA Loan after Chapter 13 Bankruptcy:

   • Waiting Time: USDA loans typically require a waiting period of three years from the discharge date of your Chapter 13 bankruptcy.
   • Credit Score: While there's no official minimum credit score, most lenders look for scores of 640 or higher for USDA loans.
   • Down Payment: USDA loans offer low to no down payment options, making them attractive for eligible borrowers in rural areas.
   • Qualification with Chapter 13 Bankruptcy: You'll need to show that you've been making timely payments under your Chapter 13 plan for at least one year and obtain approval from the bankruptcy court.

4. Kentucky Fannie Mae Loan after Chapter 13 Bankruptcy:

   • Waiting Time: Fannie Mae typically requires a waiting period of two years from the discharge date of your Chapter 13 bankruptcy.
   • Credit Score: Fannie Mae loans often have stricter credit score requirements compared to FHA, VA, and USDA loans. A score of around 620 or higher is generally needed.
   • Down Payment: Down payment requirements vary based on the type of Fannie Mae loan you apply for, but they can range from 3% to 20%.
   • Qualification with Chapter 13 Bankruptcy: You'll need to demonstrate responsible financial management after bankruptcy, including rebuilding your credit and showing a stable income.

In all cases, it's essential to work with a knowledgeable mortgage broker like Joel Lobb, who can guide you through the specific requirements and help you navigate the loan application process after a Chapter 13 bankruptcy.

Hope your day is full of sunshine

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

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 Fannie Mae Guideline Updates On Student Loan

Fannie Mae Updates Selling Guide Fannie Mae has announced updates to the April Selling Guide (SEL-2017-04) to include the following.  All changes but one; noted below, are effective immediately. Student Loan Payment Calculation If a payment amount is provided on the credit report, that amount can be used for qualifying purposes. Note: we have confirmed with Fannie Mae that this will include income based repayment options reporting to credit that are not fully amortizing. If the credit report does not identify a payment amount (or reflects $0), we can use either 1% of the outstanding student loan balance, or a calculated payment that will fully amortize the loan based on the documented loan repayment terms. Note: The DU messaging when an installment debt on the loan application does not include a monthly payment will be updated in a future release to reflect this new policy. Until then, we may disregard the statement in the message specifying the previous policy and follow the new policy.  Debts Paid by Others Requirements will be simplified for excluding non-mortgage debts from the debt-to-income ratio. Non-mortgage debts include debt such as installment loans, student loans, and other monthly debts as defined in the Guide. If documentation is obtained that a non-mortgage debt has been satisfactorily paid by another party for the past 12 months, then the debt can be excluded from the debt-to-income ratio. This policy applies regardless of whether the other party is obligated on the debt. Note: The DU message on omitted debts will require documentation to support the omission of the debt, but will not reference the documentation requirements specified as DU is not able to identify if the debt was omitted as a result of the new policy. This policy does not apply if the other party is an interested party to the subject   transaction (such as the seller or realtor). For more information see the Fannie Mae Student Debt Solutions Fact Sheet    Fannie Mae Student Loan Cash-out Refinance Features LLPA is waived for loans that meet the student loan cash-out refinance requirements. Features Requirements Requirements Shown are New or Aligns with C/O or LCO Guidelines Student Loans Eligible for Payoff At least one student loan must be paid off. Loan proceeds must be paid directly to the student loan servicer at closing. Only student loans for which the borrower is personally obligated can be paid through the  transaction. Student loan debt must be paid in full with the proceeds – partial payments of student loan debt are not permitted. New Policy Eligibility The standard cash-out refinance LTV, CLTV, and HCLTV ratios apply per the Eligibility Matrix.Max is 80% Aligns with cash-out refinance Underwriting Method DU only New policy Maximum Cash Back Lesser of 2% or $2k (over and above the student loan payoff) Aligns with limited cash-out refinance Mortgage Payoff 1st mortgage and purchase-money seconds Aligns with limited cash-out refinance Other Requirements Property cannot be listed for sale at time of disbursement Payoff of taxes ineligible unless escrow account is established Payoff of delinquent taxes ineligible Aligns with limited cash-out refinance