Showing posts with label 2020 USDA Kentucky Guidelines. Show all posts
Showing posts with label 2020 USDA Kentucky Guidelines. Show all posts



More info below about Kentucky Rural Development Loans

Kentucky Rural Housing USDA Home Loan Frequently Asked Questions 

Kentucky USDA Rural Housing Mortgage Lender: USDA Rural Housing Loan helps elderly woman become...

Kentucky USDA Rural Housing Mortgage Lender: USDA Rural Housing Loan helps elderly woman become...: USDA helps elderly WV woman become a first-time homeowner :  One 71-year-old woman from St. Albans is finally a homeowner thanks to a pr...

How long do interest rate locks last on a Kentucky mortgage loan?

Q: I am pretty sure I already know the answer to this question but here it goes anyway. My wife and I plan to move into a different house/condo in two years. Is it possible to lock into a rate now that would hold for a couple years? What is the maximum time limit to hold a rate lock?
A: That’s a great idea! We wish we could lock in these interest rates for two years or even more, but most lenders’ interest rate locks are for 30, 45, 60 or 90 days. Frequently, you get the lowest interest rate with the shortest rate lock. You can call around and see what lenders in your area are offering, but it’s unlikely that you’ll find any lender willing to give you a rate lock that extends past those days.
In some new-construction scenarios, home builders will work with lenders to offer their home buyers a longer rate lock period. While the costs for the longer term rate lock may be absorbed by the builder, that builder then knows that the buyer has been approved for a loan and that the loan interest rate is somewhat certain. This certainty would mean that the buyer should be able to close on the loan without issues.
When new-construction buyers sign a contract for a home, the home might not be delivered for a year or so. That home buyer may be able to afford the home given today’s interest rates but not tomorrow’s if rates go sky high. Typically, builders get a preferred lender to offer a type of loan product that would allow the rates to go up a tad but would give the home buyer the benefit of a lower interest rate if rates drop down.
But we haven’t seen a two-year rate lock, even in a new home building scenario. Having said that, some lenders will allow you to buy a rate lock so you might find a lender willing to give a 365 day rate lock or even longer, but that lender will charge you a fee (sometimes it’s significant) to lock that rate.
From your standpoint, you have to determine whether the cost of locking the rate is worth it. We can’t tell you what a lender would charge for the lock, but we know that the longer you want to lock in the rate the higher the fee. And, if you add that to the annual cost of the mortgage, it’s going to push that super-low rate a lot higher.
Here’s the thing: If you look all the way back to 1993 (according to Freddie Mac data), when mortgage interest rates fell a bit below 7% for the first time since 1971, we’ve had incredibly low interest rates. Over the past 10 years, mortgage interest rates have barely been above 5 percent. According to Freddie Mac data, the last time they were over 5 percent, was April 2010.
In other words, it’s likely that interest rates will still be low in two years, and if they’re not, you can refinance when they fall again. That’s the smart move.
How long do interest rate locks last on a Kentucky mortgage loan?

Mortgage Forbearance: Guidelines for Homeowners - NerdWallet

Mortgage Forbearance: Guidelines for Homeowners - NerdWallet

I am still getting a lot of questions in regard to forbearances so I am going to repeat and update some information.
  • Who Qualifies for Forbearances? Anyone suffering financial hardship b/c of the COVID-19 crisis. Some servicers will take the borrower’s word but many will request “proof” of some sort. Borrowers who are not in financial peril should be careful about claiming they are, as they risk fraud charges.
  • How Do I Obtain a Forbearance? Borrowers need to contact their servicer and apply for it. They should not simply stop making payments.
  • Do I Have to Pay Back Missed Payments? Yes – without a doubt. Some servicers will want all of the missed payments repaid as soon as the forbearance ends; some will want to restructure entire loans; and some will want to set up repayment over a period of months. Servicers will most likely try to work out the repayment system when borrowers apply for forbearances.
  • Does It Matter What Type of Mortgage I Have? Yes. Forbearances will be easier to obtain for conforming (Fannie/Freddie), FHA and VA loans. Jumbo and non-QM borrowers, however, will have a more difficult time obtaining forbearances b/c the government does not have as much influence over those channels.
  • How Will a Forbearance Affect My Credit? If borrowers obtain a formal approval for a forbearance, it should not affect their credit. If borrowers just stop making payments, however, without getting an approval from their servicer, it will likely impact their credit – severely. There is a caveat here too: while credit reports will not show late payments when borrowers get their forbearances approved, future lenders will be able to see if a borrower obtained a forbearance in many cases, and that could affect credit decisions. This is something we saw with loan modifications after the 2008 crisis.
  • Should I Go Through With My Purchase or Refinance If I Am Likely to Seek a Forbearance? Absolutely not. Not only will it be extremely difficult for borrowers to obtain a formal forbearance approval for a recently funded loan, missing payments on newly funded loans put the originating lender in extreme financial peril.

Here is a short article from Nerd Wallet with additional


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