First-time home buyer

first-time home buyer mortgage Kentucky


Mortgage Revenue Bond (MRB) First Mortgage Products
Eligibility:  Must be a first-time home buyer, unless purchasing a single-family dwelling in a targeted county.  Purchase price can be no more
than $243,000 or $195,700 when any form of HOME DAP is used.  Gross annual household income must be within applicable limits in effect.
All non-borrowing occupants age 18 or older must disclose income and complete KHC Form 98.  Mortgage loan must be a new mortgage
loan, not a refinance.
KHC’s First Mortgage Government Loan Products
Federal Housing Administration (FHA)
 Minimum 620 credit score required.
 Financing to 96.50% of lesser of sales price or appraised value.
 All KHC DAPs and other KHC-approved secondary financing may be used.
 Maximum 6% seller-paid items.
 Maximum ratios of 40/45 with AUS approval.
 FHA’s Appraiser Independence began with case numbers on or after February 15, 2010.  Please see Mortgagee Letter 2009-28 for full
details.
 All borrowers must be scored by TOTAL.
 Lender must follow the FHA maximum mortgage limits for particular area – see https://entp.hud.gov/idapp/html/hicostlook.cfm.
 Must follow Upfront and Annual Mortgage Insurance Premiums Guidelines (see information below).
Upfront and Annual Mortgage Insurance Premiums
Loan Terms > 15 years
Beginning with case numbers assigned on or after Monday, October 4, 2010
LTV
Less than or Equal to 95%  1%  annual          .85 monthly
> 95%  1% annual          .90 monthly
Conventional
 Minimum 660 credit score required.
 Maximum loan-to-value (LTV) ratio is 80%.
 Maximum ratios 40/45 with AUS approval.
 No down payment assistance products may be used.  Borrower must meet down payment requirements with their own funds or a gift.
 Pre-purchase education required as per AUS findings
 Not available for manufactured housing.
 Appraiser Independence required (see page 3).
 KHC does not presently have a product for 81% LTV or greater.
Rural Housing Services (RHS)
 Minimum 620 credit score required.
 Financing to 100% of the appraised value, plus guarantee fee of 3.5%.
 All KHC DAP programs and other KHC-approved secondary financing may be used.
 No maximum on seller-paid items.
 Ratio requirements and guarantee fee per agency guidelines.
 KHC will accept Government Underwriting System (GUS) Findings.
Veteran’s Administration (VA)
 Minimum 620 credit score required.
 Maximum ratios 40/45% with AUS approval.
 Financing to 100% of the lesser of the appraised value or sale price.
 All KHC DAP programs and other KHC-approved secondary financing may be used.
 Maximum 4% seller-paid items.
 Follow agency guidelines for ratio requirements and funding fee.
KHC Program Guide – Real Estate Agents – November 8, 2010             Page – 1 of 5 Down Payment Assistance Programs
Second Mortgage Products
Down Payment Assistance Program (DAP) Guidelines
Only home buyers obtaining a Kentucky Housing Corporation first mortgage are eligible for DAP funds.
Zero Point or Regular Rate option on loans utilizing DAP.
Regular DAP
Reservations as of May 3, 2010
 Eligible Applicants – Households whose gross annual income does not
exceed KHC’s regular income guidelines and who are utilizing a KHC
loan.
 Eligible Properties – New and existing properties with a maximum
purchase price of $243,000.
 DAP Loan Amount – up to $4,000 in $100 increments; $500 minimum.
Must go maximum allowed LTV on first-mortgage amount.
 Interest Rate – 6%.
 Terms – Loan is repaid over a seven-year term.
Ratios – Ratios with AUS approval can go 40%/45%. May gross-up nontaxable income to help qualify for the loan.
 Forms
 DAP GFE and TIL must be on a separate form from the first mortgage
GFE and TIL.  Tool to create the GFE is available under Loan
Connection Services.
 DAP fees: $50 document prep to closing agent (VA borrower cannot
pay).  Recording fees – actual recording cost.
 KHC provides note and mortgage in closing documents set.
 Other
 Buyer or seller may use own funds to pay for repairs and payoff
existing debt; DAP funds may not be used.
HOME-Funded DAP Loans
Criteria  HOME DAP
HOME Family DAP
(Available on a limited basis)
HOME Special DAP
(Available on a limited basis)
Eligible
Applicants
Households whose gross annual income
does not exceed HOME Program income
guidelines.
First-time home buyers whose gross
annual household income does not exceed
HOME Program income guidelines and
who are a single- or two-parent household
with at least one dependent child under the
age of 18.
Households whose gross annual income
does not exceed HOME Program income
guidelines and who meet one of the
following:
 At least one of the home buyers is age
62 or older; or
 At least one member of the household
has a permanent disability and is
receiving disability income.
Eligible
Properties
For HOME, HOME Family, and HOME Special DAPs:
 Existing (previously occupied) property only up to a maximum purchase price of $195,700.
 Property cannot be located within 3,000 feet of an airport runway.
 If house was built before January 1, 1978 and has extensive lead-based paint problems, property will not be eligible for programs.
Maximum
DAP Loan
Amount
Minimum of $1,000 up to a maximum of
$4,500 based on need.  Must go maximum
on first mortgage amount.
Up to a maximum of $10,000 based on minimum ratios of 29/41 (minimum $4,600).
Loan Terms  For HOME, HOME Family, and HOME Special DAPs:
Second mortgage loan forgiven over 5 years; no monthly repayment required.
Forms  For HOME, HOME Family, and HOME Special DAPs:
 DAP GFE—Tool to create this form is available under Loan
Connection Services.
 DAP fees:
 $50 document prep to closing agent.
 Recording fees – actual recording cost.
 KHC provides note and mortgage in closing documents set.
 All liquid assets must be listed on the loan application.
 All loans require Notification to Seller (KHC Form 95.)
 All loans require an HQS Inspection
 HQS Inspection Form (Form 89) will be printed with KHC forms.
 Full HQS Inspection Form is available on KHC’s Web site.
 Lead-Based Paint Requirements – If house was built before January
1, 1978, borrower must receive Lead-Based Paint pamphlet and sign
HOME Lead-Based Paint Notice (KHC revised Form 96) as of or
before the contract date.  (Purchase contracts that have the same
language as Form 96 are acceptable.)
Credit
 May gross up non-taxable income 15% to
help qualify for loan.
 Ratios 29%/41% or 40%/45% with AUS approval.
 Must gross up non-taxable income 15%.
 All household occupants (18 years and older) with income must be included on the loan
and be credit-ready.
Other   When using DU/LP, down payment assistance funds with payments deferred five years or more must be entered in DU/LP as
subordinate financing instead of gifts.
 Borrowers must use all their own funds before any source of HOME DAP funds are used.  However, borrower can retain reserves of
their own funds equal to two months’ housing payments (PITI).
 Borrower may use their funds to pay off existing debt to qualify.
 The seller must pay for any required repairs.  Final inspection can be paid by borrower or seller.
 HOME funds cannot be used with REOs.
 Lender must disclose any Secondary Financing on a separate GFE and HUD-1 as of January 1, 2010.
KHC Program Guide – Real Estate Agents – November 8, 2010          Page – 2 of 5 KENTUCKY HOUSING CORPORATION
2010 GROSS ANNUAL HOUSEHOLD INCOME LIMITS
Effective November 8, 2010
The income limitations listed below are imposed by federal law.
Failure to comply with them may create adverse consequences for Kentucky Housing Corporation and its bondholders.
Funding Source:  New Bond Funds (Purchase Price Limit – $243,000)
Person(s) per household (1 or 2) (3 or more) Person(s) per household (1 or 2) (3 or more)
Anderson
67,360  77,470
Jefferson
74,160  86,520
Ballard
64,320  75,040
Jessamine
67,220  77,310
Barren
58,200  67,900
Kenton
83,400  97,300
Boone
83,400  97,300
Larue
66,720 77,840
Bourbon
78,600 91,700
Laurel
53,000 60,950
Boyd
58,200  67,900
Livingston
61,440  71,680
Boyle
66,360 77,420
Lyon
62,040 72,380
Bracken
83,400 97,300  Madison
66,480 77,560
Bullitt
74,160  86,520  Marshall
67,560  78,820
Caldwell
54,840  63,980  McCracken
64,920  75,740
Calloway
62,040  72,380  McLean
67,320 78,540
Campbell
83,400  97,300  Meade
62,280  72,660
Carroll
68,400 79,800  Mercer
66,960  78,120
Christian
63,000  73,500  Muhlenberg
53,000 60,950
Clark
78,600 91,700
Nelson
67,080 78,260
Daviess
67,620  78,540  Oldham
74,160  86,520
Edmonson
64,560 75,320
Pendleton
83,400 97,300
Fayette
67,220  77,310
Scott
78,600 91,700
Franklin
67,180  77,260
Shelby
75,770  87,135
Gallatin
83,400 97,300
Simpson
66,120  77,140
Garrard
64,080 74,760
Spencer
74,160 86,520
Grant
64,920 75,740
Taylor
53,000  61,740
Graves
58,440  68,180
Trigg
63,000  73,500
Greenup
58,200  67,900
Trimble
74,160 86,520
Hancock
67,320  78,540
Union
66,960  78,120
Hardin
66,720  77,840  Warren
64,560  75,320
Harrison
65,400 76,300  Webster
73,680 85,960
Henderson
68,040  78,250  Woodford
67,220  77,310
Henry
74,160 86,520
    
For all other counties not listed above:  63,600 (1 or 2 persons) or 74,200 (3 or more persons)
Funding Source:  New Construction Program for Single Parents, Disabled, and Elderly Households
Income Limit
$28,000 for households of 1-2 persons or $33,000 for households of 3 or more people
Purchase Price Lim