Showing posts with label 502 USDA. Show all posts
Showing posts with label 502 USDA. Show all posts

Kentucky USDA and Rural Housing Loan Information


Kentucky USDA and Rural Housing Loan Information

Kentucky USDA and Rural Housing Loan Information



 Frequently Asked Questions For Kentucky USDA Qualifying Criteria




1 What is the guarantee?


USDA Rural Development provides the full faith and assurance of the U.S

Government that any financial loss resulting from servicing the loan will be

reimbursed in full up to an amount not exceeding 90% of the original loan

amount. All loss up to an amount not exceeding 35% of the original loan is fully

reimbursed. Losses exceeding 35% are 85% reimbursed.


2 What is the advantage to the customer?

100 percent financing, fixed interest rate, no first time homeowner requirement, and no restrictions on size or design are a few advantages.


3 What are the eligibility requirements?


Have adequate and dependable income (up to 115 percent of adjusted area median

income), have acceptable credit, do not own a dwelling in the local commuting

area, US Citizen or permanent resident, have the ability to personally occupy the

home on a permanent basis, and do not have funds for a 20% down payment loan

plus closing and moving expenses.


4. What is the maximum loan amount?


The Loan amount is limited by the market value and repayment ability.


5.  What is the maximum Loan to Value?

It can be up to 100% LTV plus the Agency guarantee fee


9 What is the Guarantee Fee?

The upfront guarantee fee is 1 percent of the “Total” loan amount. The Lender also has an annual fee of .35 percent based on principal.


10 What are the qualifying ratios?


PITI Ratio 29 percent, TD Ratio 41 percent
Higher ratios may be approved with compensating factors through the Automated Underwriting System Called GUS.


11 Do we show deferred student loans in the debt ratio?


Deferred student loans must be included in the debt ratio calculations for

Guaranteed Loans regardless of the deferment period.


12 What is the minimum credit score?


Under certain criteria, middle credit score of 680 and above no comment required.

For middle credit score of 679 and below document circumstances were

temporary in nature beyond the applicants control and have been removed. In

most cases, loans will not be guaranteed for applicants who have a middle credit

the score of 581 & below. 






13 What about location?


The dwelling must be located in eligible rural area (See eligibility site)

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do


14 What about refinancing?
Limited to existing USDA Rural Development guaranteed or direct loans.

15 Can loans include acreage? 


Possibly. The acreage must not contain any income producing facilities and the value of acreage may not exceed 30% of the total property value.


17 What about an in-ground swimming pool?


In-ground pools permitted if the value is NOT financed; Appraiser must document

value.


18 What are the required inspections?


Property must meet HUD Handbook 4905.1 & 4150.2. A FHA roster appraiser

can verify adequacy/working order of electrical, plumbing, heating, water & waste

disposal on existing dwellings.


19 Will the USDA Rural Development issue a letter asking the Approved Lender to make a loan?



No. This is the Approved Lender’s loan. They underwrite the loan and decide if

it meets their standards and Agency standards before submitting them.


21 Are seller concessions allowed?


Yes. Rural Development does not restrict the amount of seller concessions.


22 Who approves the Appraiser? The appraiser must be licensed by the State to complete appraisals.



24 Are alternate documents verifying income allowed?


Yes. Paycheck stubs, payroll earnings statements and W-2 tax forms for previous

2 tax years, and telephone verification of employment.



 

Kentucky USDA and Rural Housing Loan Information





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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




Example:






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




Co-ops




Mixed-use




Condotels




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




None




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




Purchase




Rate/Term Refinance on existing USDA loan