- Single parents with at least one dependent child under the age of 18 living in the home.
- At least one home buyer age 62 or older.
- One member of the household has a permanent disability and is receiving disability income.
- First-time home buyers, unless property is located in a targeted county.
- Interest rate is fixed at 2.5 percent without Down payment Assistance Program (DAP) or 3.0 percent with DAP.
- Maximum ratios 40/45.
- Executed purchase contract.
- Existing or new construction property (purchase price limit $115,000).
- Regular and Affordable DAP available.
- FHA, VA, and RHS first-mortgage programs.
- 640 credit score and AUS approval.
- Gross annual household income limit of $35,000 for all household sizes.
- All household occupants (18 years and older) with income must be included on loan and be credit ready.
- Follow the 45-day lock with current reservation extension policy.
- When making a reservation through Loan Connection Services select MRB as the funding source. It will default to the current market interest rate.
- Select an eligible household status (annual household income cannot exceed $35,000).
- Contact KHC to change the current market rate to the 2.50 percent without DAP or 3.00 percent with DAP interest rate. Please call Allison or Chris toll-free in Kentucky at (800) 633-8896 or (502) 564-7630, extensions 291 or 443, respectively.
- If funds are still available, the interest rate will be reduced to 2.50 or 3.00 percent.
- Print a new reservation confirmation.
- The lower interest rate is not guaranteed until the lender receives the updated reservation confirmation.
FIRST MORTGAGE QUICK REFERENCE CARD
To successfully originate KHC mortgages you should begin with prequalified
applicants and properties meeting FHA, VA, RHS, or FNMA 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 $243,000.
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
3. Do a quick check to see if below both MRB and Secondary Market income
limits. If household is over MRB income limits, then select the Secondary
Market funding source. If under both limits, check the interest rates and decide
accordingly. If rates are the same, use the table below to guide you to the right
funding source. Remember, when in doubt choose Secondary Market!
First-time home buyers in non targeted counties All home buyers in targeted counties
Purchase only: Conventional, FHA, VA, and RHS New Bond Special Funding
4. Does borrower require downpayment and closing costs assistance with their
Conventional, FHA, VA, or RHS first mortgage? If yes, then proceed to the DAP
Down payment Assistance Program (DAP)
Quick Reference Card
Only home buyers approved for a KHC first mortgage are eligible for DAP. All DAPs take a lien
position and require input into LP/DU as subordinate financing. DAP funds can never be used
to pay for repairs. All DAPS can be used on new or existing properties. Once the loan type and
KHC first mortgage funding source are determined, then borrower eligibility for one of three
available DAPS is determined.
1. To ensure Affordable DAP eligibility, the following requirements must be met:
• Household income is below the Affordable DAP income limits on page 12 of the
Secondary market Program Guide. If above household income limits proceed to #2.
• Must go maximum allowed LTV on the first mortgage.
The Affordable DAP goes up to $4,500 in $100 increments and is amortized over 10
years at 1 percent interest rate. The borrower must qualify with this second mortgage
2. Does the borrower or property meet one of the three Neighborhood DAP qualifiers?
• Is the property being purchased as an REO, foreclosure, bank-owned, or
short sale property?
• Has the property been marketed for six months or more?
• Has the borrower experienced a foreclosure, short sale, or deed-in-lieu in the
past and now credit qualifies?
If No, then proceed to #3. If yes to any of these, the borrower qualifies for the $10,000
Neighborhood DAP. Funds can be used toward the down payment orfor closing costs
and prepaids. Loan is amortized over 30 years at 1 percent interest rate. The borrower
must qualify with second mortgage payment.
3. Borrower is eligible for Regular DAP up to $6,000 in $100 increments. Regular DAP is
amortized over ten years at 5.5 percent. Must go to maximum LTV allowed on first
mortgage amount. Borrower must qualify with second mortgage payment.
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