Wednesday, June 6, 2012

Kentucky USDA Rural Development Mortgage


Kentucky USDA Rural DevelopmentMortgage Overview

FeaturesBenefits
Down Payment is not requiredBorrowers without savings, or who wish to retain their savings qualify
100% financingMore Americans become homeowners
No reserves are requiredBuyers do not need to provide bank statements
Expanded qualifying ratiosBuyers with satisfactory credit may qualify with higher Debt-to-Income ratios to accommodate high cost housing areas, etc
Seller is allowed to pay Buyer’sClosing Cost (ask KentuckyUSDA Specialist for details)Reduces out of pocket costs for Buyers
Low minimum credit score (640 minimum credit score required)Buyers with non-traditional or no credit histories may qualify
Streamlined processing with 640 credit scoreNo explanations on credit with 640+ score
Very low monthly PMIAccording to a recent Administrative Notice (AN4557) sent out by USDA, starting October 1, 2011 the upfront guarantee fee will be 2.0% of the loan amount  with the addition of minimal monthly mortgage insurance of .30 basis points on all purchase transactions with the USDA No Money Down Mortgage.On a refinance transactions involving USDA Mortgages, the upfront guarantee fee will remain at 1.5% of the loan amount but will include the monthly mortgage insurance of .30 monthly mi
Generous income limits based on 115% US median (not HUD)Deductions are available for dependents, daycare, elderly households, etc. to assist more individuals and families in qualifying
No maximum purchase price limitBuyers choose the home that meets their needs and repayment ability
NOT just for first time buyersAll homebuyers are eligible for benefits
Modular Homes may be eligiblePurchases only (Manufactured Homes are NOT Eligible)
Education/training substitute for job tenureIncome history for ratios is waived.
USDA is the lowest payment loan option for buyers wanting aFIXED RateLow MI, very low 30 YEAR FIXED rates and very easy to qualify

Kentucky Guaranteed Rural Housing Loans

To be eligible, applicants must:
  • Have an adequate and dependable income;
  • Be a U.S. Citizen, qualified alien, or be legally admitted to the United States for permanent residence;
  • Have an adjusted annual household income that does not exceed the moderate income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. Applicants may be eligible to make certain adjustments to gross income – such as annual child care expenses and $480 for each minor child – in order to qualify.USDA Rural Developmentfield offices can provide information on the moderate income limits for the areas that fall within their jurisdiction, and can provide further guidance on calculating household income.
  • Have a credit history that indicates a reasonable willingness to meet obligations as they become due;
  • Have repayment ability based on the following ratios: Principle, Interest, Taxes, and Insurance (PITI) divided by gross monthly income must be equal to or less than 29 percent. Total debt divided by gross monthly income must be equal to, or less than, 41 percent.
A Kentucky USDA Guaranteed Loan is a Government Insured 100% Purchase Loan. 

Required Documents

  • Past two (2) years W-2 statements Two (2) years tax returns
  • Pay Stubs covering the last (30) thirty days
  • Two most recent monthly bank statements
  • Most recent transaction summary of 401K, IRA, or Mutual Fund Accounts
  • Copy of the purchase and sale agreement
  • If divorced...a fully executed divorce decree
  • A letter of explanation for any known credit problems
  
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ELIGIBLE PROPERTIES


Single family detached non-farm residences. 
The property must be located in a rural area, as designated by the local RHS office. 
The value of the site should not exceed 30% of the total value of the property. 
The property must be contiguous to and have access to a paved or all-weather surface street, road or driveway. 
The property must have dependable water and waste disposal systems that are approved by local authorities. A septic inspection will be required. 
Also, properties with cisterns and wells will require a county water test by the local authorities.

INELIGIBLE PROPERTIES

 No Manufactured Homes 
No in-ground swimming pools are permitted
 Properties located in a flood or mudslide zone are ineligible.
 Properties that are located in an area NOT designated as rural by RHS are ineligible. 
 2-4 Unit properties Condos & PUDs ineligible
Working farms & income producing properties or properties with farm-related outbuildings (barns) Co-ops are not permitted
Typically land can be maxed out at 5 acres with home


The only requirements for a USDA loan are as follows:

640 score needed
Property Must be in rural area 
Cannot make more than $74,500 for a family of four or less. Up to $98k for a family of five or more. This is total household income.
Does require an appraisal. 
You cannot currently own another home
Does not require a termite report

There are no prepayment penalties or extra fees. It is a Government backed loan, just like VA, FHA, Fannie Mae etc. 

Let me know any other questions. 




-- 

Joel Lobb
Senior  Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223

 phone: (502) 905-3708
 Fax:     (502) 327-9119

 Company ID #1364 | MB73346
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