Kentucky USDA RHS Rural Housing Mortgage Loans for 2020

Kentucky USDA RHS Rural Housing Mortgage Loans for 2020
Kentucky USDA Rural Program Guidelines

Borrower Eligibility

U.S. citizens

Permanent resident aliens

First time homebuyers allowed

Maximum 2 borrowers allowed

Non-occupant co-borrowers NOT allowed

Commitment Fee

USDA Rural Developmet charges a 1% Commitment Fee

Commitment Fee can be financed into the loan


Purchase price – $100,000

Loan amount – $101,040

Commitment Fee – $1,000

Maximum financed loan amount = $101,040 ($100,000 [purchase price]/.98)

This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA

Downpayment Requirement

No down payment is required

If borrower has adequate assets (i.e. 20% of the property purchase price) to obtain conventional financing the borrower may be ineligible for the USDA Rural Development Loan

Eligible Properties

Must be in an eligible Kentucky USDA Rural Development Location

Owner-occupied properties

Existing attached & detached single family residences

New construction with permanent financing only

PUD’s (i.e. Townhomes)

Condo-units. HUD, VA, FNMA or FHLMC approved project

Ineligible Properties




Manufactured homes

Log cabin homes

Single Family Homes where the Land value exceeds 30% of the appraised value AND can be sub divided.

Maximum Income Amount

County specific. Reference the USDA website for adjusted household income limits

Maximum Loan-To-Value

Maximum loan-to-value is 101%

Maximum Mortgage Amount


Minimum Credit Score

Middle Credit Score – 581 for each applicant for GUS automated underwriting approval

Monthly Mortgage Insurance Premium (MIP) Requirements

.35 basis points USDA Loan require a monthly mortgage insurance premium. For example on a $100,000.00 it would be $ a month 29.16

Multiple Property Ownership

Kentucky USDA Rural Development often won’t allow applicants to own other properties

Exceptions include when the other property owned is:

Not owned in the local commuting area as the new property; or

Not structurally sound and/or functionally adequate

Manufactured home not on permanent foundation

This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA

Occupancy Type

Owner occupied only

Qualifying Ratios

29/41% debt-to-income (DTI) – Target

Higher dti allowed on Gus Approvals or With compensating factors such as:

680 or higher credit score

No or low “payment shock” – less than a 100% increase in proposed mortgage payment Vs. current rental housing expenses

Fiscally sound use of credit

Ability to accumulate savings

Stable employment history with 2 or more in current position or continuous employment history with no job gaps

Cash reserves available for use after settlement

Career advancement as indicated by job training or additional education in the applicants profession

Trailing spouse income – as a result of a job transfer, the house is being purchased, prior to the secondary wage-earner obtaining employment. If the secondary wage-earner has an established history of employment and has a reasonable chance to obtain new employment in the area

Low total debt

Seller Contribution

Unlimited Contribution towards closing costs, prepaids, discount points, buydown fees, and upfront Commitment Fee

Transaction Types


Rate/Term Refinance on existing USDA loan