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.

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

Kentucky USDA Mortgage Guideline Updates

 USDA Home Loans Guide - https://www.moneygeek.com/mortgage/usda-loans/ 

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

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky First Time Home Buyer Questions Answered:: What will my mortgage rate be? We’ll begin with what always seems to be everyone’s number one concern, saving money. Similar to any other mo...

Kentucky First Time Home Buyer Questions Answered:

What will my mortgage rate be?

We’ll begin with what always seems to be everyone’s number one concern, saving money. Similar to any other monthly payments you’re attempting to negotiate, it depends on a lot of factors. But we can at least clear up a few items to give you an idea of how things will go. Ultimately, the more risk you present to the mortgage lender, the higher your mortgage rate. So, if you have poor credit and come in with a low, down payment, expect a higher interest rate relative to someone with a flawless credit history and a large down payment. The higher interest rate is intended to compensate the lender for the potential of greater risk of a missed payment as data proves those with questionable credit and low down payments are more likely to fall behind on their mortgages. The property itself can also affect mortgage rate pricing – if it’s a condo or multi-unit investment property, expect a higher rate, all else being equal. Then it’s up to you to take the time to shop around, as you would any other important purchase. Two borrowers with identical loan scenarios may receive completely different rates based on shopping alone. And someone worse off on paper could actually obtain a lower rate than a so-called prime borrower simply by taking the time to gather several quotes instead of just one. For the record, a Freddie Mac study proved that home buyers who obtained more than one quote received a lower rate. There is no single answer here, but the more time you put into improving your financial position, shopping different mortgage lenders, and familiarizing yourself with the process so you can effectively negotiate, the better off you’ll be. And of course, you can keep an eye on average mortgage rates to get a ballpark estimate of what’s currently being offered.  To sum it up, compare mortgage rates as you would anything you buy, but consider the fact that you could be paying your mortgage for the next 30 years. So put in even more time!

How long is my mortgage rate good for?

Once you do find that magic mortgage rate, you’ll probably be wondering how long it’s actually good for. If you’re not asking that question, you should be because rates aren’t set in stone unless you specifically ask them to be. By that, we mean locking in the mortgage rate you negotiate or agree upon with the lender so even if rates change from one day to the next, your rate won’t. Otherwise, you’re merely floating your mortgage rate, and thereby taking your chances. Without a rate lock, it’s really just a rate quote.  Lenders will often charge a fee to lock in an interest rate. Rates can generally be locked in for anywhere from 15 to 90 days or longer, with shorter lock periods cheaper than longer ones. But pay attention to the expiration date of your lock, because you will need to close the loan before that date or you will have to renew the lock.

How do you calculate a mortgage payment?

At some point in the mortgage process, you’re going to be searching for a mortgage calculator to figure out your proposed payment.  You can see how monthly payments on mortgage loans are truly calculated using the real math, or you can simply find a payment calculator that does all the work and tells you nothing about how it comes up with the final sum.  Just make sure you use a mortgage calculator that considers the entire housing payment, including taxes, insurance, HOA dues, and so forth. Otherwise, you’re not seeing the complete picture.

What is a mortgage refinance?

As the name implies, refinancing simply means obtaining new financing for something you already own (or partially own, like real estate).  It’s kind of like a balance transfer where you move your loan from one lender to another to get better terms, except it’s a mortgage payoff.of your old mortgage loan for a new mortgage loan. If you currently have a rate of 6% on your mortgage, but see that refinance rates are now 4%, a refinance could make sense and save you a lot of money over time. You’d essentially have the lender pay off your existing loan with a brand-new loan at the lower interest rate. There is also the cash-out refinance, which allows you to tap into your home equity while also changing the rate and term of your existing mortgage. So, if you currently owe $200,000, but your home is worth $500,000, you could potentially take out $100k cash and your new loan amount would be $300,000. Your monthly payments may not even go up if interest rates are favorable, and you’d have that cash to use for whatever you wish. Be sure to use a refinance calculator or payoff calculator to help guide your decision, and consider the loan term, otherwise known as your expected tenure in the property

How much will my housing payment really be?

Like we mentioned in the related question above, be sure to factor in all the elements that go into a mortgage payment, not just the principal and interest payment that you often see advertised.  It’s not enough to look at P&I (Principal & Interest), you have to consider the PITI (Principal, Interest, Taxes and Insurance). And sometimes even the “A” (Homeowners Association Assessments).  If you don’t consider the full housing payment, including property taxes and homeowners insurance (and maybe even private mortgage insurance) you might do yourself a disservice when it comes to determining how much you can afford during the home financing process. You can check out my mortgage affordability calculator to see where you stand. Whether you have an escrow account or not, mortgage lenders will qualify you by factoring in taxes and insurance, not just your monthly mortgage payment.

When is the first mortgage payment due?

This depends on when you close your home loan and if you pay prepaid interest at  closing.  For example, if you close late in the month, chances are your first mortgage payment will be due in just over 30 days.  Conversely, if you close early in the month, you might not make your first payment for nearly 60 days. That can be nice if you’ve got moving expenses and renovation costs to worry about, or if your checking account is a little light.

What credit score do I need to get approved?

It depends what type of mortgage you’re attempting to get, and also what down payment you have, or if it’s a purchase or a refinance.  The good news is that there are a lot of mortgage programs available for those with low credit scores, including VA loans and FHA mortgages.  For example, the FHA goes as low as 500 FICO, Fannie and Freddie 620, and the USDA and VA don’t technically have a minimum credit score, though most lenders want at least 620/640. If you’re in good shape financially, a poor credit score may not actually be a roadblock. But you can save a lot of money if you have excellent credit via the lower interest rate you receive for being a better borrower. Simply put, loan rates are lower if you’ve got a higher credit score.

How large of a mortgage can I afford?

Here you’ll need to consider home values, how much you make, what your other monthly liabilities are, what you’ve got in your savings account, and what your down payment will be in order to come up with your loan amount. From there, you can calculate your debt-to-income ratio, which is very important in terms of qualifying for a mortgage.  This is a fairly involved process, so it’s tough to just estimate what you can afford or provide some quick calculation. There’s also your comfort level to consider. How much home are you comfortable financing? And don’t forget the property taxes and insurance, as well as routine maintenance costs, which can make your total housing obligations much more expensive!

Do I even qualify for a mortgage?

This is an important question to consider. Are you actually eligible for a mortgage or are you simply wasting your time and the lender’s?  While requirements do vary, most lenders require two years of credit history or clean rental history, and steady employment, along with some assets in the bank. As mentioned, if you are looking to purchase a new home, getting that pre-qualification, or better yet, pre-approval, is a good way to find out if the real thing (a loan application) is worth your while. However, even if you are pre-qualified or pre-approved, things can and do come up that turn a conditional approval into a denial letter, such as an undisclosed credit card, personal loan, auto loan, or pesky student loans. Many lenders will also verify employment and credit and income, prior to loan closing to make sure nothing has changed.  Simply, your loan is not 100% done until it funds.

Why might I be denied a mortgage?

There are probably endless reasons why you could be denied a mortgage, and likely new ones being realized every day. It’s a complicated business, really. With so much money at stake and so much risk to lenders if they don’t do their due diligence, you can bet you’ll be vetted pretty thoroughly.  If anything doesn’t look right, with you or the property, it’s not out of the realm of possibilities to be flat out denied. Those aforementioned undisclosed student loans or credit cards can also come back to bite you, either by limiting how much you can borrow or by pushing your credit scores down below acceptable levels. That doesn’t mean give up, it just means you might have to go back to the drawing board and improve your credit score, reduce some debts, or find a new lender willing to work with you. It also highlights the importance of preparation!

What documents do I need to provide to get a home loan?

In short, a lot of them, from tax returns to pay stubs to bank statements and other financials like a brokerage account if using assets from such a source. This process is becoming less paperwork intensive thanks to new technologies like single source validation, but it’s still quite cumbersome. You’ll also have to sign lots of loan disclosures, credit authorization forms, letters of explanation, and so on.  While it can be frustrating and time consuming, do your best to get any documentation requests back to the lender ASAP to ensure that you will close your home loan on time. And make sure you always send all pages of documents to avoid re-requests.

What type of mortgage should I get?

There are a lot of loan options, including fixed-rate mortgages and adjustable-rate mortgages, along with conventional loans and government loans, such as FHA and VA. While most borrowers just default to the 30-year fixed-rate mortgage loan, there are plenty of other loan programs available, and some may result in significant savings depending on your plans. For example, a 5/1 ARM might come with an interest rate 0.75% below a 30-year fixed, and it’s still fixed for the first five years, adjusting every year thereafter. You might want to start with the fixed-rate versus ARM comparison, then go from there. If you’re comfortable with an ARM, you can explore the many options available. If you know a fixed rate is the only way to go with a home loan, you can determine whether a shorter-term option like the 15-year fixed is in your budget and best interest. Also consider the FHA vs. conventional pros and cons to ensure you’ve covered all your bases if trying to decide between those two loan types.

How big of a down payment do I need?

That depends on a lot of factors, including the purchase price of the home, the type of loan you choose, the property type, the occupancy type, your credit score, and so on. There are still zero down mortgage options available in certain situations, including for USDA and VA loans, and widely available 3% and 3.5% down options as well.  In short, you can still get a mortgage with a relatively small down payment, assuming it’s owner-occupied and not a vacation home or investment property. Just make sure you can afford the higher monthly payments!

Do I need to pay mortgage insurance?

Good question. The answer coincides with down payment and/or existing home equity, along with loan type. Basically, you want to be at or below 80% loan-to-value to avoid mortgage insurance entirely, at least when it comes to a home loan backed by Fannie Mae or Freddie Mac. That means a 20% down payment or greater when purchasing a home, or 20%+ equity when refinancing a mortgage. However, for a FHA loan, mortgage insurance is unavoidable, regardless of the loan to value.

What are mortgage points? Do I need to pay them?

The choice is yours when it comes to points, though it does depend on how the lender. Are they discount points or a loan origination fee?  Points paid by you, that are for a lender origination fee do not reduce the interest rate. They are a fee to compensate the lender for their cost to originate the mortgage loan. Discount points will reduce the loan interest rate. For every point paid, there is a corresponding reduction in interest rate charged.  Of course, these points can be paid directly and out-of-pocket, or indirectly via a higher mortgage rate and/or rolled into the loan. This is part of the negotiation process, and also your preference.

What closing costs are negotiable?

Closing costs will be fees assessed by and paid to your lender and fees assessed by your lender but paid to a third-party. Many closing costs may be negotiable, including some third-party fees that you can shop for like title insurance. Closing costs refer to fees both paid to the lender as well as fees assessed and paid to a third-party provider.  If you look at your Loan Estimate (LE), and provided settlement Service Provider list, you’ll actually see which services identified which you can shop for. Then there are the loan costs, which you may be able to negotiate with some lenders. In some instances, you may not be charged an outright fee, because it will be built into the rate, which also may be negotiated at times. You have every right to go through each and every fee and ask what it is and why it’s being charged. And the lender should have a reasonable response.

How quickly can I get a mortgage?

This is an easier mortgage question to answer, though it can still vary quite a bit. In general, you might be looking at anywhere from 30 to 45 days for a typical residential mortgage transaction, whether it’s a mortgage refinance or home purchase. Of course, stuff happens, a lot, so it’s not out of the ordinary for the process to take up to 60 days or even longer. At the same time, there are companies (and related technologies) that are trying to whittle the process down to a couple weeks, if not less. So, look forward to that in the future!

Do I really need a 20% down payment to purchase a home?

A. No. There are several other loan options available that allow you to put as little as 5%, 3%, or even 0% down. Just keep in mind that a conventional home loan with less than a 20% down payment typically requires Private Mortgage Insurance (PMI). FHA loans will require mortgage insurance premiums regardless of the down payment. Mortgage Insurance protects the lender from losing money if you end up not being able to pay the loan.

When should I lock in my interest rate?

A. This answer differs depending on whether you’re purchasing or refinancing a home. But of course, either way, you want to obtain the lowest rate possible on such a large amount of money.  If you’re refinancing, your application has to be credit-approved before you can lock in your rate. If you’re shopping for a home, your application has to be credit-approved and the seller has accepted your offer before you can lock in your rate.  Then, you’ll need to decide if you want to lock in today’s rate or keep an eye on rates in the days that follow.  Be sure to understand any fees associated with the rates you see advertised — not all are created equal, so you want to pay attention to the Annual Percentage Rate (APR), not just the interest rate.

How long does my pre-approval last?

A. Pre-approvals on average are good from 60 to 90 days, at which time, if you haven’t put an offer on a home and submitted a loan application, you’ll need to get pre-approved again.

When I purchase a new home, what exactly, are closing costs, and how much should I expect to pay?

A. When you decide to buy a home, you’ll spend more than just your down payment. You’ll also pay for things like recording fees, wire fees, or escrow account, origination fees, upfront insurance premiums and any “points” you buy to lower your interest rate. These expenses are collectively called closing costs, and you can expect them to run you anywhere from 2% to 5% of the purchase price of your home.

What type of mortgage should I choose?

A. This is entirely unique to your financial situation, what you want to buy, how long you plan to live in the home, and more. With options that range from a standard 30-year fixed-rate home loan to an adjustable-rate mortgage that lets you pay less in interest for the first few years, your best bet at finding the right loan is to speak with an expert. Our mortgage loan advisors can spend time understanding your needs and goals to assist you in determining the best loan program for 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

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

https://www.mylouisvillekentuckymortgage.com/