Saturday, May 19, 2012

KHC Refinance Products

KHC Refinance Products

KHC Refinance Products

Bookmark and Share

To qualify for a KHC refinancing option, you must contact an approved lender and meet the requirements below:
FHA Credit Qualifying Streamline Refinance:
  • 640 minimum credit score
  • Appraisal required
  • Maximum LTV/CLTV 97.75 percent (125 percent CLTV)
  • 30-year term
  • FHA existing loan
FHA Rate/Term Refinance
  • 640 minimum credit score
  • Appraisal required
  • Maximum LTV/CLTV 97.75 percent (97.75 percent CLTV)
  • 30-year term
  • Conventional, RHS, VA, or FHA existing loans

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 DAPs 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 GUS findings, including reduced documentation and, with approval, expanded ratios up to 40/45%.

RHS Refinance Pilot Program - AN 4634
This RHS refinance pilot program will assist existing Guarantee borrowers to refinance their homes with greater speed and ease. Borrowers will be able to secure lower interest rates and payments without the need of obtaining a new appraisal or new property inspections.  Eligibility requirements are:

  • Must meet KHC and RHS Guarantee's household income limitations; AND
  • Must reside in eligible rural location and remain as principle residence; AND
  • Have made timely mortgage payments for the last 12 months and have a minimum 640 credit score;AND
  • New interest rate must be 1 percent below current interest rate.
More information can be found in our program guides.  Attend one of the upcoming Lender Regional Trainings to hear more specifics on this new program and our other new policies and programs.  S

Eligibility Requirements:

Must meet KHC and RHS Guarantee’s household income limitations.

Must reside in eligible rural location and remain as principle residence.

Must have made timely mortgage payments for the last 12 months and have a minimum 640 credit score.

New interest rate must be 1% below current interest rate.

Existing loan must be a 502 guaranteed loans only.

Ratio calculation not required.

Must be a manual underwrite and not processed through the Guaranteed Underwriting System (GUS).

Borrower must be employed at time of closing or have alternative sources of income, such as retirement, social

security, disability, alimony, or child support.

Refinance balance consists of: principal balance of loan + the full upfront guarantee fee + funds to close. The

applicable upfront fee is 1.5%. No cash out is permitted. Annual fee is applicable. For 2012 the annual fee is


Income: Verification of all sources for income eligibility only—not for repayment.

Streamlined Benefits:

KHC will follow current lender compensation guidelines.

No appraisal required.

Reduced documentation (customized checklist).

No credit or ratio underwriting.

Reduced fees with all closing costs rolled in to loan amount.

Quicker closings.

Homebuyer Tax Credit Benefits

A home buyer with a 3.75 percent interest rate on a fixed, 30-

year mortgage of $125,000 would pay approximately $4,687

in interest payments for the first year without an MCC.

With an MCC, 25% of that interest could be taken as a tax

credit against the homebuyer’s federal income taxes,

effectively reducing the monthly mortgage payments by

$64.61 per month. This effectively reduces the interest rate

from 3.75% to 2.81% as seen in the example below:

Terms MCC Without MCC

Mortgage Amount $125,000 $125,000

Interest Rate 2.81%** 3.75%

Term 30 Years 30 Years

Monthly P&I $514.28** 578.89

1st year Interest


$3,515** $4,687

*Borrowers are encouraged to consult an accountant for full details on

tax effects of this or any financial program.

**The interest rate and payment information includes the estimated

effects of the tax credit.

Households whose gross annual income does not exceed HOME Program income guidelines.



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.


DAP Loan


Minimum of $1,000 up to a maximum of $4,500 based on need. Must go maximum on first mortgage amount.

Loan Terms

Second mortgage loan forgiven over five years; no monthly repayment required.


DAP GFE – Tool to create this form is available under

Loan Connection Services.

DAP fees:

 $50 document prep to closing agent (VA borrower cannot


 Recording fees – actual recording cost.

KHC provides note and mortgage in closing documents


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

Credit language as Form 96 are acceptable.)

May gross up non-taxable income 15% to help qualify for loan.

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 HOME DAP is 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 DAP cannot be used with REOs or FHA 203K Streamline Program.

Lender must disclose any Secondary Financing on a separate GFE and HUD-1.

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*



Fill out my form!