Kentucky USDA RHS Rural Housing Mortgage Loans for 2020
Kentucky USDA Rural Program Guidelines
Borrower Eligibility
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U.S. citizens
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Permanent resident aliens
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First time homebuyers allowed
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Maximum 2 borrowers allowed
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Non-occupant co-borrowers NOT allowed
Commitment Fee
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USDA Rural Developmet charges a 1% Commitment Fee
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Commitment Fee can be financed into the loan
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Example:
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Purchase price – $100,000
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Loan amount – $101,040
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Commitment Fee – $1,000
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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
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No down payment is required
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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
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Must be in an eligible Kentucky USDA Rural Development Location
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Owner-occupied properties
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Existing attached & detached single family residences
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New construction with permanent financing only
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PUD’s (i.e. Townhomes)
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Condo-units. HUD, VA, FNMA or FHLMC approved project
Ineligible Properties
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Co-ops
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Mixed-use
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Condotels
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Manufactured homes
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Log cabin homes
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Single Family Homes where the Land value exceeds 30% of the appraised value AND can be sub divided.
Maximum Income Amount
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County specific. Reference the USDA website for adjusted household income limits
Maximum Loan-To-Value
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Maximum loan-to-value is 101%
Maximum Mortgage Amount
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None
Minimum Credit Score
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Middle Credit Score – 581 for each applicant for GUS automated underwriting approval
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Monthly Mortgage Insurance Premium (MIP) Requirements
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.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
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Kentucky USDA Rural Development often won’t allow applicants to own other properties
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Exceptions include when the other property owned is:
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Not owned in the local commuting area as the new property; or
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Not structurally sound and/or functionally adequate
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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
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Owner occupied only
Qualifying Ratios
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29/41% debt-to-income (DTI) – Target
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Higher dti allowed on Gus Approvals or With compensating factors such as:
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680 or higher credit score
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No or low “payment shock” – less than a 100% increase in proposed mortgage payment Vs. current rental housing expenses
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Fiscally sound use of credit
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Ability to accumulate savings
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Stable employment history with 2 or more in current position or continuous employment history with no job gaps
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Cash reserves available for use after settlement
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Career advancement as indicated by job training or additional education in the applicants profession
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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
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Low total debt
Seller Contribution
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Unlimited Contribution towards closing costs, prepaids, discount points, buydown fees, and upfront Commitment Fee
Transaction Types
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Purchase
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Rate/Term Refinance on existing USDA loan