Kentucky USDA Mortgage Guideline Updates

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

The Kentucky Rural Housing Program Guidelines for Bankruptcy, Foreclosure

The program requires a minimum of three years from the date of a bankruptcy, foreclosure, or short sale prior to the borrower being eligible for a USDA Loan. For a Chapter 7 bankruptcy, the borrower must allow three years from the discharge date prior to submitting a new loan request. For a Chapter 13 bankruptcy the waiting period is 12 months after the completion of the court ordered repayment plan. If the bankruptcy included a property, whether a primary residence or investment property, the earliest a new loan can be obtained is based on USDA Loan short sale and foreclosure guidelines.

When the borrower experienced either a short sale, foreclosure, or surrenders the property through the bankruptcy process, there will be a three year waiting period between the date of property transfer from the borrower to a new entity, and the date the new loan application can be processed. The most conservative stance by a USDA Loan Underwriter for defining the date of the negative occurrence is the legal recorded transfer date, which is the date the property has been transferred out of the borrowers name and either back to the bank that holds the mortgage note or a subsequent home buyer. From this date the borrower will not be eligible for a USDA Loan for a period of time no less than three years.

However, one of my investors will allow a Chapter 7 bankruptcy discharge date to be considered the date of foreclosure, provided the borrower didn't re-affirm the mortgage liability. This differs from when the property transfer date is recorded at the County Clerks Office. This is especially helpful in circumstances where the home owner legally removed their ownership rights to a property, through a Chapter 7 bankruptcy, but the mortgage lien holder was slow to transfer the mortgage back into the name of the bank or sell the property.

If the foreclosed property was secured by a government backed mortgage loan such as a FHA or VA Loan, the property transfer date is no longer considered the only variable in determining the timeframe for buying a new house. Another important date, is the date when the mortgage lender that held the mortgage note received compensation for their mortgage insurance claim through either The Department of Housing and Urban Development for a FHA Loan or The Veterans Administration for a VA Loan. The date of the mortgage insurance claim is identified through a CAIVRS search, which is required on all USDA Loans.

Joel Lobb (NMLS#57916)
Senior Loan Officer
Text/call 502-905-3708

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3

Louisville, KY 40223
Company ID #1364 | MB73346


kentuckyloan@gmail.com


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.


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

Kentucky USDA Rural Development Housing Guideline Changes for 2016

Kentucky Rural Housing Loans  has made changes to the program guidelines for guaranteed loans, which will include the changes described below.

The 1980-D and all associated publications are replaced by the 7 CFR Part 3555. All effective Administrative Notices must reflect "3555". The new handbook is the HB-1-3555 and can be accessed by clicking the link here.

FLOOD ZONES:

Existing properties located in a flood zone are now eligible as long as flood insurance is available through FEMA's NFIP program.

New or proposed homes in a flood zone must still meet additional flood zone requirements.

Flood coverage must cover the lesser of the total loan amount or maximum allowed by NFIP.Maximum deductible is $1000 or 1% of the face amount of the policy

HAZARD INSURANCE:

Maximum deductible is $1000 or 1% of the face amount of the policy

BUILDINGS/LAND:

The subject property cannot contain any land or buildings that will be used principally for income. Minimal income producing activity is allowed (a garden, but not a farm). The value of the buildings no longer needs to be deducted from the appraised value.

RESUBMISSION POLICY:

Any request to release GUS for data updates after the issuance of a Conditional Commitment will be treated as a new request, processed in date order of applications received.

RETAINING A DWELLING:

Current homeowners are eligible for a guaranteed loan if ALL of the following are met:

                Applicants are not financially responsible for another RD direct or guaranteed loan at closing.

                Current home no longer meets applicants' needs.

                Occupy the subject as primary residence.

                Applicants are without resources or credit to obtain home.

                Only one home may be retained.

Applicants must be financially qualified to own more than 1 home.

The commuting area restriction has been removed.

In order to meet the above requirement for the current home no longer meeting applicants' needs, the borrower must document a significant status change that requires immediate remedy. For example:

Severe overcrowding - Defined as more than 1.5 household members per room (not bedroom, just room)*, document overcrowding has existed for more than 90 days and will persist for 9 months into the future.

*Based on USDA's clarification of 1.5 per room, we do not anticipate many of these scenarios being acceptable and approved.

TRADELINE REQUIREMENT:

One borrower must have 3 trade lines that have existed for 12 months. If this requirement cannot be met, an accept decision must be downgraded to a refer and treated as a manual underwrite.

VERIFICATION OF RENT:

Scores 680 and above OR GUS accept = No VOR required.

Scores 679 and below = VOR required.

COLLECTIONS:

Determine if the total outstanding balance of all collections accounts and charge offs of all applicants is equal to or greater than $2,000. Unless excluded by state law, collection accounts and charge offs of a non-purchasing spouse in a community property state are included in the cumulative balance of all collections and charge offs.

Remove all medical collections and medical charge off accounts from the total balance. Medical collections and medical charge off accounts must be clearly identifiable on the credit report.

If the remaining outstanding balance of collection accounts and charge offs are equal to or greater than $2,000, any of the following actions will apply:

Payment in full of all collection accounts and charge offs at or prior to closing.

Payment arrangements are made with each creditor for each collection account and charge offs remaining outstanding. A letter from the creditor or evidence on the credit report is required to validate the payment arrangements. The agreed upon monthly payment for each outstanding collection account and charge off will be included in the borrower's debt-to-income ratio.

In the absence of a payment arrangement, the lender will utilize in the debt-to-income ratio a calculated monthly payment. For each collection and charge off utilize 5% of the outstanding balance to represent the monthly payment.

STUDENT LOANS:

Include the greater of 1% of the outstanding loan balance or the verified fixed payment reflected on the credit report.

Exception: Monthly payment amounts listed on the credit report, which are less than one percent of the outstanding balance may be used when evidence from the loan servicer is obtained indicating; 1)the applicant is on a fixed repayment plan not subject to change under the terms of the current agreement and 2) and the monthly payment amount due. Fixed payments have a monthly amount that is not subject to change through the fixed repayment time frame. Income Based Repayment (IBR) plans, graduated plans, adjustable rates, interest only and deferred plans are examples of repayment plans that are subject to change and do not qualify for the exception.

EXCLUDING INSTALLMENT PAYMENTS:

Long-term obligations with more than 10 months repayment remaining, including all installment loans, revolving charge accounts, alimony, child support or separate maintenance payments, student loans and other continuing obligations. GUS will determine if the debt can be excluded. If GUS does not exclude the debt, we cannot override it and exclude.

DEBT WITH NO PAYMENT REPORTED:

Use the greater of 5% of the balance or $10.

Current payment from current monthly statement.

TRANSCRIPTS:

All household members must have 2 years IRS tax return transcripts pulled  even if they are not a borrower on the loan. Transcripts for all household members are required prior to submission to USDA for conditional commitment. If the household member(s) is not a borrower on the loan, a separate 4506T form will be required.

If any adult member of the household is not presently employed but there is a recent history of such employment, that person's income will be considered in the calculation of annual household income. If the person involved is not presently employed and does not intend to resume employment in the foreseeable future, or if interest assistance is involved, during the term of the Interest Assistance Agreement, the applicant(s) and the person involved must sign a statement to such. The statement will be filed in the permanent loan file.

GIFT FUNDS:

Household members now can provide gifts.

TAX EXEMPT INCOME:

May be grossed up 25% for repayment income, cannot be grossed up for household income.

PROPERTY:

30% land value restriction has been removed.

Cannot include income producing land or buildings that use used principally for income purposes. No reduction of value is required for outbuildings.

No active farms are commercial enterprises.

Home based operations are allowed (home daycare).

Shared Driveways and private roads must have a recorded agreement/easement.

Swimming pool restrictions have been removed. Value reduction no longer required.

ADVERSE CREDIT SEASONING:

If any of these items exist on the credit report or other documentation provided, the loan is ineligible for USDA financing with Platinum Mortgage.

Foreclosure within 3 years of application date

Chapter 7 BK within 3 years of application date

Chapter 13 BK within 12 months of application date

Late mortgage payments if any mortgage trade line during the most recent 12 months of application date shows 1 or more late payments of greater than 30 days.

Late rent payments paid 30 or more days late within the last 12 months of application date.

CREDIT SCORE:

A minimum of 2 scores required per borrower.

SELLER CONCESSIONS:

USDA has placed a limit of 6% for seller concessions.

DOCUMENT EXPIRATION:

All documents expire after 120 days for both existing and new construction.

POC ITEMS PAID BY CREDIT CARD:

If the applicant pays for application fee/closing cost/appraisal with a credit card and new charges are not reflected in the credit report balance these new charges must be included in the total balance and the payment must be recalculated. The new payment must be included in the DTI.

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Joel Lobb
Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc.

10602 Timberwood Circle, Suite 3

Louisville, KY 40223

 phone: (502) 905-3708

 Fax:     (502) 327-9119

kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

Kentucky USDA and Rural Housing Home Loan Eligibility Map Changes

Kentucky USDA Rural Housing Eligibility Map

Kentucky USDA Rural Housing Map

Click on map below and then

Type in your address below and hit go here to see if the home is in an eligible USDA Rural Housing Area for a Kentucky Property

👇

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

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.

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#57916http://www.nmlsconsumeraccess.org/

Call TOLL FREE to speak
with a USDA Loan Specialist
502-905-3708

 

Kentucky USDA and Rural Housing Credit Scores Guidelines

Kentucky USDA No Score Loan Guides

DTI: 29/41 Maximum no exceptions.
Rent: 12 months 0 x 30 on Rent. 12 months cancelled checks or VOR if institution. Or a four Non Traditional Trade Lines may be substituted with underwriting
approval.
Credit: No delinquent or derogatory past or current credit. Regardless of size or type.
No open collections or judgments (exceptions granted upon review only
and only based on overall profile of the loan).
Job Time: 2 years of consecutive work/education with no gaps.
Alternative Trades: 3 Non Traditional Trades with Rent or 4 Non Traditional Trades with No Rent. 0 x 30 and must have 12 month history on each trade.
Pricing: 3.00 negative adjustment to price.
Miscellaneous: Required to have 2 months bank statements and/or 401k asset Account with 2 month Reserves. FTHB Education is required.
Minimum Loan: $30,000
Residual Incomer per Family/Geographic: Borrowers must have residual income left over after their loan closes, see table below for what is required:
Family Size
1
$450
2
$755
3
909
4
1,025
5
1,062
Over 5 Add $80 for each additional family member up to 7

Kentucky Rural Housing and USDA 620-639 Credit Score Loan Guides:

DTI: 29/41 Maximum no exceptions.
Rent: 12 months 0 x 30 on Rent. 12 months cancelled checks or VOR if institution. Or a four Non Traditional Trade Lines may be substituted with underwriting
approval.
Credit: 3 Trade Lines seasoned for 12 months with high balances of a minimum $500. No delinquency in last 12 months regardless of size or type.
No open collections or judgments (exceptions granted upon review only and only based on overall profile of the loan)
Alternative Trades: May be needed if credit is thin or needed to be strengthened overall credit quality.
May require four non-traditional trades if no Rent History.
Job Time: 2 years of consecutive work/education with no gaps.
Pricing: 1.50 negative adjustments to pricing.
Miscellaneous: Required to have 2 months bank statements and/or 401k asset Account with 2
months reserves.
Minimum Loan: $30,000

Kentucky USDA and Rural Housing Manual Underwrite with GUS Refer Scores >=640:

DTI: 29/41 Maximum no exceptions.
Rent: 12 months 0 x 30 on Rent. 12 months cancelled checks or VOR if institution. OR a four Non Traditional Trade Lines may be substituted with underwriting
Approval if no rent history is available.
Credit: 3 Trade Lines seasoned for 12 months with high balances of a minimum $500.
OR if payment shock <=25% and traditional trade lines cannot be supplied we can accept 3 alternative trade lines with 12 month history and 0 x 30.
No delinquency in last 12 months regardless of size or type on any credit.
No open collections or judgments (exceptions granted upon review only and only based on overall profile of the loan)
Job Time: 2 years of consecutive work/education with no gaps.
Pricing: 2.00 negative adjustments to pricing.
Miscellaneous: Required to have 2 months bank statements and/or 401k asset Account with 2
months reserves. May be waived with strong compensating factors.
Minimum Loan: $30,000

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell