KHC Loan Programs

KHC Loan Programs



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KHC’s First Mortgage Loan Products


Federal Housing Administration (FHA)

•Minimum 640 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 rules apply. (see page 4)
•All borrowers must be scored by TOTAL and receive approve/eligible or accept/accept.
•Lender must follow the FHA maximum mortgage limits for particular area – see
Upfront and Annual Mortgage Insurance Premiums
30-Year Loan Term
LTV less than or equal to 95% 1.75% annual 1.20 monthly
LTV greater than 95% 1.75% annual 1.25 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.
• Federal Home Loan Bank monies allowed once borrower meets the 20% down payment requirement. Must be entered as
subordinate financing in DU/LP.
• Pre-purchase education required as per AUS findings.
• Not available for manufactured housing.
• Appraiser Independence required (see page 4).
• KHC does not presently have a product for 81% LTV or greater.

Rural Housing Services (RHS)
 Minimum 640 credit score required.
• Financing to 100% of the appraised value, plus guarantee fee of 2.0%/0.3% annual fee.
• 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, including reduced documentation and, with
approval, expanded ratios up to 40/45.

Veteran’s Administration (VA)

•Minimum 640 credit score required.
•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.
•Ratio requirements and funding fee per agency guidelines
Maximum ratios of 40/45% with AUS Approval


DOWN PAYMENT ASSISTANCE PROGRAM (DAP)

QUICK REFERENCE CARD



Only Homebuyers obtaining a KHC first mortgage are eligible for DAP. All DAPS take a lien
position & require input into LP/DU as subordinate financing. DAP funds can never be used to
pay for repairs. Once you have determined the loan type it’s time to see which of the two KHC
Down payment assistance programs your borrower is eligible for. Follow the easy steps
below….

1. Check to see the household income falls under the Affordable DAP Income Limits:
If yes then the borrower qualifies for the Affordable DAP up to $4,500. Affordable DAP
is amortized over 10 years at 1%. Must go to maximum LTV allowed on first mortgage
amount. Borrower must qualify with second mortgage payment. If no, then proceed to
Regular DAP.

2. Check to see if the applicant(s) income falls under the Secondary Market Income Limits.
If yes the borrower is eligible for Regular DAP up to $6,000 in $100.00 increments with
a minimum $500.00 loan amount. Regular DAP is amortized over 10 years at 5.50%.
Must go to maximum LTV allowed on first mortgage amount. Borrower must qualify with
second mortgage payment.



To successfully originate KHC mortgages you should begin with prequalified
applicants and properties meeting FHA, VA, RHS, or Fannie Mae Conventional
guidelines. The applicant (s) must be purchasing or refinancing a single family, one
unit, and owner-occupied property, located in Kentucky. Then follow the steps below….

1. The purchase price or refinance amount is at or below:

 $294,000 with Secondary Market
 $258,960 with MRB or KHC’s Homebuyer Tax Credit

2. The applicant (s) meet KHC’s simple credit overlays:

 680 credit score for Conventional
 640 credit score for FHA, VA, and RHS
 Max ratio caps of 40%/45%
 AUS Approval required except on RHS


 45-day Lock

4. Does borrower require down payment and closing costs assistance with their
Conventional, FHA, VA, or RHS first mortgage? If yes, then proceed to the DAP
REFERENCE CARD.