What is the minimum Credit Score Needed to Buy a House and get a Kentucky Mortgage Loan?

Credit Score Needed to Buy a House and get a Kentucky Mortgage?

Conventional Loan

• At least 3%-5% down• Closing costs will vary on which rate you choose and the lender. Typically, the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.

Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.

The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home. Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.
Kentucky USDA Rural Housing Program

If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.

 
Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.

 
They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.

They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in a rural area

A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern Kentucky. There is a map link below to see the qualifying areas.

There is also a max household income limits with most cutoff starting at 109,500 for a family of four, and up to $136,000 for a family of five or more.

The income limits change every spring, so make sure and check to see what updated income limits are.
USDA requires 3 years removed from bankruptcy and foreclosure
There is no max USDA loan limit.

 

Kentucky FHA Loan

FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment and will go down to a 580-credit score.

 
The current mortgage insurance requirements are kind of steep when compared to USDA, VA, but the rates are usually good so it can counteract the high mi premiums. As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.

 
The mi premiums are for life of loan like USDA.

 
FHA requires 2 years removed from bankruptcy and 3 years removed from foreclosure. 

 

Kentucky VA Loan

VA loans are for veterans and active-duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2% for first time use, and 3% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.

 
VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit and no max loan limits in Kentucky

 
Most VA lenders I work with will want a 580-credit score, even though VA says in their guidelines there is no minimum score, good luck finding a lender
VA requires 2 years removed from bankruptcy or foreclosure
Clear Caviars needed to for a VA loan.

 

Kentucky Down Payment Assistance

This type of loan is administered by KHC in the state of Kentucky. They typically have $10,000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years.

Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.

KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs. The conventional loan requirements at KHC requires 660 credit score.
The max debt to income ratios is set at 40% and 50% respectively.

Joel Lobb (NMLS#57916)
Senior Loan Officer
Text/call 502-905-3708

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3

Louisville, KY 40223
Company ID #1364 | MB73346


kentuckyloan@gmail.com


If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.


Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant

Equal Opportunity Lender. NMLS#57916


http://www.nmlsconsumeraccess.org/

Kentucky USDA Rural Development Loans for 2023 Upfront Mortgage Insurance and Annual Fee Changes for Conditional Commitments

KENTUCKY USDA RURAL HOUSING CONDITIONAL COMMITMENT FOR 2023 

With the start of Fiscal Year 2023 (FY) soon approaching, please take a few minutes to review the Single-Family Housing Guaranteed Loan Program (SFHGLP) Conditional Commitment process. We hope you find this information helpful.

FY 2023 will begin October 1, 2022 and ends at the close of business September 30, 2023.

Fee Structures:

An upfront guarantee fee of 1.00 percent and an annual fee of .35 percent will apply to both purchase and refinance transactions for Kentucky USDA Rural Development Loans for 2023

Issuance of :

At the beginning of each fiscal year, funding for the guaranteed loan program is not available for a short period of time – approximately two weeks. USDA anticipates this brief lapse in funding to continue for FY 2023. During the temporary lapse in funding, Rural Development - Rural Housing Service (RHS) will issue Conditional Commitments (Form RD 3555-18/18E) “subject to the availability of commitment authority” for purchase and refinance transactions. The issued Conditional Commitment will include the following:

"Funds are not presently available for this Conditional Commitment. The Rural Development-Rural Housing Service (RHS) obligation under this Conditional Commitment is contingent upon the availability of an appropriation from which payment for contract purposes can be made. No legal liability on the part of RHS for any payment on this Conditional Commitment may arise until funds are made available to RHS for this Conditional Commitment and until the Lender receives notice of such availability, to be confirmed in writing by RHS.  More specifically, this Conditional Commitment is subject to RHS receiving sufficient funds (in the Program Funds Control System for the Single Family Housing Guaranteed Loan Program for the Type of Assistance and State of application submission) to fund this and all prior eligible outstanding applications in their entirety in the time and date order received. When such funds become available, RHS will notify the lender, and the guarantee process will continue subject to all applicable Agency regulations and conditions set forth in this Conditional Commitment. RHS will not reserve loan funds for applications in process during this timeframe. Lenders may close the loan as scheduled. The lender will assume all risk of loss for the loan until RHS obligates funds and the Loan Note Guarantee is subsequently issued. When the lender requests the Loan Note Guarantee, the lender must certify to the Agency, using the process provided in this commitment, that there have been no adverse changes to the borrower's financial condition since the date the Conditional Commitment was issued by the Agency. The lender will submit the appropriate guarantee fee at the time they request the Loan Note Guarantee. The loan will be subject to an annual fee of 0.35 percent over the average scheduled unpaid principal balance of the loan. The Agency will not be able to issue the Loan Note Guarantee until these conditions are met and funding is obligated."

The application processing workflow is as follows:

Rural Development will continue to accept complete guaranteed loan applications for purchase and refinance loan transactions from approved lenders;

Rural Development will process, approve, and issue Conditional Commitments for those applications that are eligible “subject to the availability of commitment authority”;

Lenders may close loans as scheduled;

When funds become available, Rural Development will utilize the Electronic Customer File (ECF) system to advance the file to “Obligate Application” for Conditional Commitments that were issued for loans subject to the availability of commitment authority;

Once loans are obligated, Rural Development may process lender’s Loan Note Guarantee requests when the loan closing is verified, and all conditions of the Conditional Commitment are satisfied;

Lenders assume all loss default risk for the loan until Rural Development is able to obligate the loan and issue the Loan Note Guarantee.  

Thank you for your participation in the USDA Single Family Housing Guaranteed Program. We look forward to serving you in FY 2023!

Questions regarding this announcement may be directed to sfhgld.program@usda.gov or (833) 314-0168.

Thank you for your support of the Single-Family Housing Guaranteed Loan Program! 

Kentucky Mortgage Approval Underwriting Myths Debunked for FHA, VA, USDA and Fannie Mae

 Mortgage Approval Underwriting Myths Debunked

Getting approved for a loan is not as hard as some make it. The 3C approach breaks it down in its simplest form so no need to overthink or complicate with “what if’s” or variable situations and these factors are the same in every state. They all have to line up for your loan to be approved but here there are in order of significance

Capacity - No matter if your credit is in 800’s the ability to afford a loan (capacity aka DTI) is the MOST important C and why most applications either get denied or reduced. Income is EVERYTHING.

To get a conforming (FHA / VA / Conventional) loan you need 2yrs of verifiable Full time income even if it’s pieced together with different employers with 2yrs W2’s and your most recent paystub if you’re an employee and OT and/or bonus cannot be used if you’ve been with your employer for less than 2yrs.

If you have part time employment as well that income cannot be used unless you’ve worked both jobs for at least 2yrs UNLESS your P/T job is the exact same as your F/T job and your hours are not variable then in most cases you can get an exception if you’ve been there for at least 1yr. If you’re self employed 2 most recent tax returns with positive income on line 31 of your schedule C.

If homeownership is your goal, then don’t be cheap and have a certified tax preparer prepare your taxes because it’s likely you’ll need certain docs to get approved only they can provide. Also DO NOT write off all your income to avoid paying the IRS taxes because this will disqualify you from a loan and you’ll have to get a more expensive loan with a bigger down payment.


Credit - many people think this is the most important but it’s not but it is important. With a high enough capacity (low DTI) I’ve seen clients with minimum scores get approved. FHA requires 580, VA does not have a minimum score requirement and while some lenders can do down in the 500’s generally most lenders do not go below 580, and conventional requires 620.

Having said all that just because you meet the minimum score does not mean you’ll get an approval before credit profile (positive tradeline history, collection activity, credit usage) is what matters most. I’ve seen applicants with 680+ get denied for conventional loans because they have a poor credit profile or low capacity (higher DTI).

FHA is a little more forgiving which is why they are easier loans to get than conventional. Obviously the higher the score, the better the chances are for approval but high scores aren’t needed if capacity and collateral are strong.

Collateral - aka down payment. Underwriters request either 1 bank statement for FHA or 2 bank statements for conventional and all they are looking for is verification of cash to close, large deposit (FHA more than 1% of loan amount deposited in 1 deposit) activity and reserves if needed, not spending habits. Large purchases are irrelevant and NSF’s can be explained with an explanation letter. The higher the down payment in percentages (3.5 or 5%, 10%, 15%, 20% etc…) not dollars ($2000 or $5000 more than required) then the lower the risk and higher chance of approval especially for conventional loans. Plus dollars don’t noticeably reduce your monthly payment but percentages do.

Overlays - additional restrictions some lenders have in addition to standard mortgage guidelines. If your lender is telling you anything more is required than what’s posted above it’s because they have overlays which make it more difficult to get approved with them.
Example - Veteran’s United will not take credit scores under 620 = OVERLAY

If you want a personalized answer for your unique situation call, text, or email me or visit my website below:

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916


American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364



Text/call: 502-905-3708

email: kentuckyloan@gmail.com

https://kentuckyloan.blogspot.com/

CONFIDENTIALITY NOTICE: This message is covered by the Electronic Communications Privacy Act, Title 18, United States Code, §§ 2510-2521. This e-mail and any attached files are deemed privileged and confidential, and are intended solely for the use of the individual(s) or entity to whom this e-mail is addressed. If you are not one of the named recipient(s) or believe that you have received this message in error, please delete this e-mail and any attached files from all locations in your computer, server, network, etc., and notify the sender IMMEDIATELY at 502-327-9770. Any other use, re-creation, dissemination, forwarding, or copying of this e-mail and any attached files is strictly prohibited and may be unlawful. Receipt by anyone other than the named recipient(s) is not a waiver of any attorney-client, work product, or other applicable privilege. E-mail is an informal method of communication and is subject to possible data corruption, either accidentally or intentionally. Therefore, it is normally inappropriate to rely on legal advice contained in an e-mail without obtaining further confirmation of said advice.

100% Financing Zero Down Payment Kentucky Mortgage Home Loans for Kentucky First time Home Buyers: Kentucky USDA Rural Housing Mortgage Lender: How t...

100% Financing Zero Down Payment Kentucky Mortgage Home Loans for Kentucky First time Home Buyers: Kentucky USDA Rural Housing Mortgage Lender: How t...: Kentucky USDA Rural Housing Mortgage Lender: How to Apply & Get Approved for The Kentucky USDA ... : Who can apply for this program? A n...

Kentucky FHA loans vs Kentucky USDA Loans for Kentucky Home buyers.

Criteria	Loan Type
	FHA	USDA
Down Payment	3.5%	0% – None
PMI	.85%	0.35%
Funding Fee *	1.75	1.0
Limits (loan)	Per County	None
Limits (income)	None	YES -per county,etc
Restricted location	None	YES
Credit score	580 down to 3.5% 500 score with 10% down payment	no minimum score

There are a few other points that put the Kentucky USDA loan at an advantage over the Kentucky FHA mortgage program such as the appraisal value. USDA appraisal value is normally higher than the selling price. If the appraisal value is more than the purchase price, this becomes an additional advantage for borrowers as the USDA will permit you to roll in closing costs.

Essentially the only issues that could be considered as drawbacks of the USDA loan are the restriction of location and the USDA RD income limits. The location must be in a designated rural area with a total population of 20,000. This can be a setback for those who do not want to drive farther to get to work in the city. But buyers should check their location in detail, please click here for the USDA housing map. Many populated locations just outside of the big cities are USDA rural housing approved - locations just outside of Louisville, Ky, Lexington Kentucky, and Northern Kentucky Counties..

Additionally, the USDA ‘s income limit imposed on would-be borrowers is currently set at 115% of the median or average income of the area where your home is to be situated. That means for those who have a higher income than the average in town would have to opt for mortgage loans under the FHA or through a conventional lender if they so decide to live in a rural area.

Regarding the rates as well as the guidelines in qualifying potential borrowers, the FHA and USDA are just about equally matched, and they are currently at historic low rates. However, the USDA, unlike the FHA, allows borrowers to finance the whole purchase price and include any closing expenses as well into the loan.

Lastly, all USDA guaranteed loans have a 30-year fixed rate term. This can be very advantageous mainly when the homeowner eventually starts earning more than the required 115% median, the rate is fixed and even after 10 years only, will practically be insignificant compared to other monthly expenses at this time.

The funding fee in both governments backed programs are incorporated (rolled into) into the overall loan.

Apply for FREE Below for your Kentucky FHA Mortgage loan or USDA Loan:

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

http://mylouisvillekentuckymortgage.com 

Fill out my form!

Mortgage Overlays Explained

Overlays Explained

By Realty Times Published Dec 15, 2021 11:18 am

What’s an Overlay? An Overlay is a mortgage industry term that highlights an additional qualifying requirement(s) beyond what the guidelines issued by Fannie Mae and Freddie Mac. FHA, VA and USDA loans can also have overlays. These guidelines are set forth for several reasons, but one is to provide lenders with mortgage program stability as well as allowing lenders to sell loans, either individually or ‘in bulk.

Think about that for a moment. If there were no secondary market at some point the mortgage company would run out of money to lend. When a lender makes a loan, it draws down some money from its credit line and replenishes that credit line once the loan(s) is sold. This process occurs over and over again.

Overlays can also be used to target a specific type or class of borrower. To reduce risk, a lender might ask for a greater down payment than is originally required. Let’s look at credit scores as an example. While Fannie might ask for a minimum credit score to be 680 a lender might decide to up the ante a bit and set the minimum score at 700.

Catering to different groups means catering to a particular market or class of borrower. One lender may continue to stand firm with a 680 score while another decides 700 is better. Many borrowers may not know about this dynamic. This can mean applying for a mortgage at a mortgage company, getting declined and thinking that all lenders are the same and stop their search for a new home. All they really needed to do was to continue shopping for a lender who would approve the very same loan, just without the harsher overlays.

If a lender asks for a 680 score your loan officer will know where to send a loan with a sub-700 FICO. These overlays can be placed on both conventional as well as government-backed mortgages. The government-backed mortgages are those underwritten to FHA, VA and USDA program guidelines.

Overlays can come and go over time. A lender might set forth a new overlay and then a year later remove it or even enhance it. It’s completely up to the individual lender as long as the loan is approved using established guidelines. What lenders can’t do is weaken guidelines. There are no overlays to drop the minimum score requirement from 680 to 650, for example. Doing so would mean the mortgage didn’t meet program guidelines and the loan could no longer be sold. Overlays help protect the lender while at the same time providing borrowers with additional choices.

Finally, lenders can’t dilute loan program requirements. In other words, lenders can’t apply an overlay to lessen the requirements. Reducing approval requirements means the loan won’t have the minimum features that secondary markets require. If a lender does in fact reduce the requirements the loan can still be made, it’s just that the lender can expect to keep the loan in its own possession for the life of the loan.

One important concept you should familiarize yourself with is the “lender overlay,” which is essentially an expanded guideline (or set of guidelines) on top of what Fannie Mae, Freddie Mac, or the FHA/VA will allow.

Think of it as a second coat of paint, applied after the primer. The primer is the bare minimum necessary, but you don’t see people driving around too often without that second coat.

The same goes for mortgages. Fannie Mae, Freddie Mac, and the FHA/VA all set underwriting guidelines for residential mortgages, but they don’t actually lend directly to consumers.

Their job is to purchase and/or securitize the home loans that fit their guidelines, which is why they exist to begin with. Essentially, to keep the mortgage market liquid.

By doing so, lenders are able to sell their loans more easily, knowing they fit certain pre-determined criteria, which allows them to originate more loans via that increased liquidity.

Written by David Reed for www.RealtyTimes.com Copyright © 2022 Realty Times All Rights Reserved. Reed is from Austin, Texas and is the author of The Real Estate Investor’s Guide to Financing, Your Guide to VA Loans and Decoding the New Mortgage Market. A Senior Loan Officer and Mortgage Executive for more than 20 years, he has also appeared on CNN, CNBC, Fox Business, Fox and Friends and the Today In New York show.

100% Financing Zero Down Payment Kentucky Mortgage Home Loans for Kentucky First time Home Buyers: Common Kentucky Mortgage Myths Busted!My credit sc...

100% Financing Zero Down Payment Kentucky Mortgage Home Loans for Kentucky First time Home Buyers: Common Kentucky Mortgage Myths Busted!My credit sc...: Common Kentucky Mortgage Myths Busted! My credit score or fico score  is too low:  Most people’s credit scores are better than they think. A...

Kentucky Mortgage Forbearance Guidelines

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: Kentucky Mortgage Forbearance Guidelines for Fanni...: 

Conventional Mortgage Loans by Fannie Mae

Mortgage credit history for any mortgage which the borrower is obligated as borrower, co-borrower, or co-signer may be

considered acceptable if it meets one of the following:

 The borrower has made all payments due on time, prior to subject loan Note date, even though the loan was in

forbearance, or

 The borrower has not made one or more payments due, and the late payments or forbearance has been resolved

per one of these acceptable resolution plans:

Resolution Plans* Eligibility Requirements

Reinstatement ▪ Any missed payments must be made

▪ Funds to reinstate after application must be documented from eligible source

▪ Funds from the current transaction may not be used to reinstate mortgage

Repayment Plan ▪ Must have made 3 timely** payments under the repayment plan, or

▪ Repayment plan has been completed

▪ Funds from the current transaction may satisfy the existing mortgage in full

Payment Deferral ▪ Must have made 3 timely** payments after executing the deferral agreement

▪ Funds from the current transaction may satisfy the existing mortgage in full

Modification ▪ Must have made 3 timely** payments under trial modification

▪ Funds from the current transaction may satisfy the existing mortgage in full

Any Other Loss Mitigation Option ▪ Must have completed successfully or made a minimum of 3 timely payments

▪ Funds from the current transaction may satisfy the existing mortgage in full

*If loan was in forbearance, provide documentation from servicer showing the exit from forbearance into one of the

acceptable resolution plans.

** Payments cannot be made in advance to meet the 3 required payments.

 For purposes of determining acceptable mortgage payment history, missed payments under a COVID-19 forbearance

are not considered late payments.

 The above guidance does not apply to Freddie Mac Enhanced Refinance or Fannie Mae High LTV Refinance

transactions.

Fannie Mae FAQs: https://singlefamily.fanniemae.com/media/22326/display

Freddie Mac Bulletin 2020-17: https://guide.freddiemac.com/app/guide/bulletin/2020-17

Freddie Mac FAQs: https://sf.freddiemac.com/general/covid-19-selling-faq

VA ELIGIBILITY

 Borrowers must provide a Letter of Explanation (LOE) stating the circumstances behind the forbearance.

Documentation will be required to verify the items listed in the LOE have been resolved.

 If the forbearance was on a non-subject property, the forbearance must be resolved, and new payment (if

applicable) must be included in the DTI.

 A Veteran who was granted a forbearance and continues to make payments as agreed under the terms of original

note is not considered delinquent or late and will be treated as if not in forbearance status, provided that the

forbearance plan is terminated prior to closing.

Cash-Out Refinances

 Refinance of mortgages that are in a current forbearance status, where mortgage payments are not being made,

including mortgages under the CARES Act forbearance protection program, are not eligible. The forbearance plan

must be completed/terminated prior to closing.

 Borrower in forbearance with missed payments- Borrower must have made 6 consecutive months’ timely payments

post-forbearance, regardless of method of resolution of the forbearance.

 Missed payments due to COVID-19 forbearance cannot count toward seasoning. Borrower must have made six

consecutive monthly payments prior to the CARES Act forbearance or six consecutive payments will be required post

forbearance. In addition, loans that have been modified must meet seasoning requirements based on the modified

note first payment date. The new note date must be on or after the later of: The date that is 210 days after the date

on which the first modified monthly payment was due on the mortgage being refinanced, and the date on which 6

modified payments have been made on the mortgage being refinanced.

IRRRL Refinances

 Borrowers must be current at time of application (any skipped payments under a COVID-19 forbearance have since

been made).

 Borrower in forbearance with no missed payments- standard underwriting applies.

 Borrower in forbearance with missed payments- Borrower must have made 6 consecutive months’ timely payments

post-forbearance.

 Loans must still meet loan seasoning, fee recoupment, discount points, and net tangible benefit requirements.

 Missed payments due to COVID-19 forbearance cannot count toward seasoning. Borrower must have made six

consecutive monthly payments prior to the CARES Act forbearance or will need to make six consecutive payments

post forbearance. In addition, loans that have been modified must meet seasoning requirements based on the

modified note first payment date. The new note date must be on or after the later of: The date that is 210 days after

the date on which the first modified monthly payment was due on the mortgage being refinanced, and the date on

which 6 modified payments have been made on the mortgage being refinanced.

References VA Circular 26-20-25: https://www.benefits.va.gov/HOMELOANS/documents/circulars/26-20-25.pdf

FHA ELIGIBILITY

*NOTE: FHA Guidance is permanent, not temporary, and applies where a Forbearance Plan was granted due to COVID-19, Presidentially Declared major

disaster or other hardship. This new guidance has been included in the updated 4000.1 Handbook.

Payment

History

Documentation

When any mortgage reflects payments under a Modification or Forbearance Plan within 12 months prior to case number

assignment, obtain:

 Copy of Modification or Forbearance Plan* and

 Evidence the payment amount and the date of payments during the agreement

* A copy of Forbearance Plan due to the COVID-19 National Emergency is not required. Must be able to determine the reason for

forbearance.

Borrowers that are or were in Forbearance

Maximum base loan amount for a Streamline of an owner-occupied primary residence and HUD-approved second home is

the lesser of:

 The outstanding principal balance of the existing mortgage (including suspended payments from forbearance) as of

the month prior to mortgage disbursement; plus:

o Interest due on the existing mortgage

o Late charges and escrow shortages

o MIP due on existing mortgage; or

 The original principal balance of the existing mortgage (including financed UFMIP)

 Less any refund of UFMIP

New FHA Insured Mortgage Eligibility

 Any active forbearance plan must be terminated.

 Borrowers granted forbearance but who continued to make all payments as agreed under the terms of original Note

are not considered delinquent. No additional payment seasoning post forbearance required.

 Borrowers granted forbearance but who did not continue to make payments require additional mortgage payment

seasoning post-forbearance that document satisfactory, consecutive monthly payments. See chart below for details:

Transaction Additional Requirements

Purchase Must make three consecutive payments* post-forbearance or

▪ If home sold prior to making three payments, must be manually underwritten

Cash-Out Refinance Must make 12 consecutive payments* post-forbearance

GNMA Seasoning: Loans that have been modified must meet seasoning

requirements based on the modified note first payment date.

No Cash Out Refinance Must make three consecutive payments* post-forbearance (six payments if

mortgage was modified after forbearance)

Simple Refinance Must make three consecutive payments* post-forbearance

*NOTE: The consecutive payments must be documented on the credit report and read by AUS to follow AUS approval.

Streamline Refinance  Missed payments under forbearance do not count toward mortgage

seasoning requirements

 If mortgage modified after forbearance, six payments under

modification required.

Non-Credit Qualifying

 At time of case number assignment, borrower has made three post

forbearance payments.

Credit Qualifying

 At time of case number assignment, borrower is still in mortgage

payment forbearance or has made less than three monthly payments,

and

 Has made all mortgage payments due within the month due for the six

months prior to forbearance

***ALL Streamlines: GNMA Seasoning: Loans that have been modified must

meet seasoning requirements based on the modified note first payment date.

References FHA Mortgagee Letter 2020-30:

  https://www.hud.gov/sites/dfiles/OCHCO/documents/2020-30hsgml.pdf

USDA ELIGIBILITY

 For each open mortgage, confirm the forbearance status and payment history.

 Borrowers who have a current mortgage that was placed in COVID-19 forbearance, but continued to make all

payments as scheduled, are not subject to additional seasoning.

 Purchases: Borrowers who missed any payments as allowed under the forbearance plan must have resumed

repayment of their mortgage loan for a period of at least 3 months prior to applying for a new loan.

 Refinances: the loan must have closed at least 12 months prior to the request to refinance, borrower must have

resumed making payments for a period of at least 3 months and have a total 180-day period of satisfactory

payments, excluding the time the loan was in forbearance.

References SFHGLP FAQs: https://www.rd.usda.gov/sites/default/files/RD-GRH-OriginationServicingFAQs.pdf

LOANS MADE TO BORROWERS POST-FORBEARANCE

The guidance herein is based on Agency and Investor eligibility. The below is a summary and not all-inclusive of Agency announcements. For full

Agency guidance see the Resources section under each program section below.

IN ALL CASES THE FOLLOWING REQUIREMENTS APPLY:

 BORROWER MAY NOT BE IN FORBEARANCE ON THE SUBJECT PROPERTY MORTGAGE OR ANY OTHER NON-SUBJECT PROPERTY

MORTGAGES AT THE TIME OF LOAN CLOSING.

 Explanation from Borrower(s) for forbearance reason and how any hardship has been overcome is required. If borrower faced hardship,

documentation supporting resolution is required. (e.g. borrower was furloughed for a time and is now back to work and employer

documentation supports).

 Payment history required for most recent 12-months to see payment made dates to determine if borrower skipped any payments.

 Documentation from servicer that forbearance has ended.

 Asset sourcing to document funds for any lump-sum payments made to reinstate/bring mortgage current- 2 months consecutive

statements required.

 If borrower entered into modification/work out plan rather than reinstating the forbearance, a copy of plan must be obtained. See

applicable Agency guidance for eligibility in this case.

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

 

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