How does consumer credit counseling effects things on a Kentucky FHA or USDA loan in Kentucky ?

 KENTUCKY FHA GUIDELINES FOR CONSUEMR CREDIT COUNSELING

(J) Credit Counseling/Payment Plan (APPROVE/ELIGIBLE)Participating in a consumer credit counseling program does not require a downgrade to a manual underwriting.No explanation or other documentation is needed.

 

(K) Credit Counseling/Payment Plan (MANUAL UW) Participating in a consumer credit counseling program does not disqualify a Borrower from obtaining an FHA-insured Mortgage, provided the Mortgagee documents that:

• one year of the payout period has elapsed under the plan;
• the Borrower’s payment performance has been satisfactory and all required payments have been made on time; and
• the Borrower has received written permission from the counseling agency to enter into the mortgage transaction.

 

 

KENTUCKY RURAL HOUSING USDA GUIDELINES FOR CONSUMER CREDIT COUNSELING 

CONSUMER CREDIT COUNSELING - DEBT MANAGEMENT PLANS

Credit counseling provides guidance and support to consumers which may include assistance to negotiate with creditors on behalf of the borrower to reduce interest rates, late fees, and agree upon a repayment plan. The credit score will reflect the degradation of credit due to participation in this plan. Credit accounts that are included in the repayment plan may continue to report as delinquent or as late pays. This is typical and will not be considered as recent adverse credit. Lenders must retain documentation to support the accounts included in the debt management plan and the applicable monthly payment. Lenders must include the monthly payment amount due for the counseling plan in the monthly liabilities. GUS Accept/Accept with Full Documentation files: No credit exception is required. GUS Refer, Refer with Caution, and manually underwritten files: The following must be documented and retained in the lender’s permanent loan file: •One year of the payment period of the debt management plan has elapsed; •All payments have been made on time; and •Written permission from the counseling agency to recommend the applicant as acandidate for a new mortgage loan debt. •No credit exception is required

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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/

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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Current Credit Score Requirements for Kentucky FHA, VA, USDA and Conventional Mortgages Loans in Kentucky!

 

 

KENTUCKY FHA MORTGAGE LOANS 👈👈👈 Read more at link

·         Minimum credit score: 620 AUS approved, 640 manuals

·         Non-Credit Qualifying Streamline refinances allowed

·         Gift funds allowed for down payment and closing costs

·         Cash out 80% LTV

 

 

KENTUCKY VA MORTGAGE LOANS 👈👈👈 Read more at link 

·         Minimum credit score: 620 AUS approved, 640 manuals

·         Cash-out up to 90% LTV

·         Foreclosure/Short Sale/Bankruptcy <2 years allowed with AUS Approval

 

 

KENTUCKY USDA MORTGAGE LOANS 👈👈👈 Read more at link

·         Minimum credit score: 640

·         100% maximum LTV

·         No maximum loan amount

·         Rate/Term refinances allowed

 

 

KENTUCKY CONVENTIONAL MORTGAGE LOANS 👈👈👈 Read more at link

·         620 min score

·         Fannie Mae

·         Freddie Mac

·         Standard and High Balance

·         HomeReady

·         HomePossible

***KEEP IN MIND..ALL MORTGAGE LENDERS HAVE DIFFERENT CREDIT SCORE REQUIREMENTS SO CHECK WITH YOUR LENDER FIRST. 

Can you get a Kentucky Mortgage Loan with Bad Credit or less than Perfect Credit?

Kentucky Mortgage Loan with Bad Credit

If you are looking to get a mortgage loan in 2020 in the state of Kentucky and you have past credit problems, there maybe some hope for Kentucky Home-buyers to buy a home of their own.

 Before we look at some possible home-buying programs, let's first look at what is considered Bad Credit, or less than perfect credit. 

Most of the times when borrowers say they have bad credit, they mean one of the following:

Past or Current Bankruptcies

Low credit scores or fico scores

Collections on credit report showing unpaid or paid.

Delinquent or behind on credit cards, mortgage, car loan payments

Foreclosure or short sale where they lost a home to default

Owe back taxes to the Federal Government.

Defaulted Student Loans

Delinquent Child Support Obligations
Disputed accounts on credit report

Below I have listed one of the most popular programs Kentucky Home Buyers need to consider when buying a home in 2020 if they have experienced some of the credit issues mentioned above:


When it comes to getting a mortgage loan with past credit problems, FHA is probably going to be your best bet.

They're the most lenient on credit scores, down payment requirements and credit history when it comes to qualifying for a Kentucky Home Loan.

I have listed below some of the requirements you must overcome to get approved for a Kentucky FHA home loan.

Kentucky FHA Mortgage Loans:

The credit score requirements for Kentucky FHA home loans:

FHA says on paper in their written guidelines that they will insure a FHA loan down to 500 - 579 with a 10% down payment or 580+ with a 3.5% down payment. However, in the real world of lending in the secondary market, most lenders will not adhere to these guidelines.

Most FHA investors will want a 620 middle credit score, but they're a few that will go by the written FHA guidelines above for credit scores, but very few. Your best bet is to get with a loan officer and get your scores up to at least 580 so you can have a better shot of getting approved and access to more FHA lenders.

Be aware there are a lot of credit scores out there, but each lender must pull their own credit report and credit scores to determine your creditworthiness. I would shop around first to see what the requirements are for each FHA lender before they pulled your credit report.

Mortgage lenders use the FICO score model below for each credit bureau when they look at your credit scores.

MyFICO is now selling additional score versions to the public.  These include three scores most often used by mortgage lenders:

• Experian FICO Score 2  (also known as EX-98 or Risk Model v2)
• Transunion FICO Score 4  (also known as TU-04 or Transunion FICO Risk Score Classic 04)
• Equifax FICO Score 5  (also known as EQ-04 or Beacon 5).  

Bankruptcy Requirements for Kentucky FHA Home Loans:

FHA states in their published guidelines that if you had a Chapter 7 Bankruptcy, you must wait 2 years from the discharge date to reapply for a FHA insured mortgage loan. 

If you had a Chapter 13 Bankruptcy and have a 12 month on-time payment history with the courts, you can potentially get approved for a FHA loan if you get permission from the trustee and qualify with the Chapter 13 payment plan in your debt to income ratio. If you have been in the plan for over 12 months, and have a good pay history, you can submit your paperwork for FHA approval. 

For example, let's say you have been in the Chapter 13 repayment plan for 3 years and you want to buy a home using FHA financing. You could go ahead and petition the Chapter 13 trustee for approval from the courts to get a home loan. The trustee of the Chapter 13 courts will want to know your new loan payment with the home loan, so make sure you know how much  you want to borrow before you apply ,. 

Collections on Credit Report Requirements for Kentucky FHA Home Loans:

: 

• If the credit report shows a cumulative balance of $2,000 or more for collection accounts: 
• The debt(s) must be paid in full prior to or at closing, or 
• Payment arrangements must be made with the creditor and the monthly payment included in the DTI, or 
• A monthly payment of 5% of the outstanding balances of each collection must be included in the borrower’s DTI. 
• Collection accounts of non-borrowing spouses in a community property state must be included in the $2,000 cumulative balance and analyzed as part of the Borrower’s ability to pay all collection accounts. Community property states are Arizona, California, Texas, Washington, and Wisconsin
• Medical collections and charge offs are excluded from this
  guidance.B. Judgments – Loans for borrowers with outstanding judgments are
  generally not acceptable unless the following documentation is obtained.
  a. Judgment must be on the credit report that is linked to the TOTAL
  Scorecard findings and the findings must be “approve/eligible” or
  “accept/accept.”
  b. If the judgment will not be paid off and released prior to the
  closing, evidence of a payment agreement may be considered. The
  payment agreement must be in writing and provided at the time of
  underwriting. Crescent will require evidence that 12 months
  satisfactory payments have been made as scheduled. Borrowers
  may not pre-pay scheduled payments in order to meet this
  requirement. The monthly payment must be considered in the
  borrower’s debt-to-income ratio for qualifying.
  c. Any judgments that are discovered in the processing of the loan
  that ARE NOT on the credit report linked to the TOTAL findings
  require the loan to be manually downgraded to “refer” status.
  Crescent does not approve loans that must be manually
  downgraded.
  d. A subordination agreement will be required for any judgment that
  is also a lien against the borrower and/or the subject property.
  C. Disputed Accounts – Because disputed accounts are not generally
  considered in the borrower’s credit report FHA will now require loans of
  borrowers who have derogatory disputed accounts with cumulative
  balances of $1000 or more (excluding medical) to be downgraded to
  “refer” findings and manually underwritten. As you are aware, Crescent
  does not approve loans that require manual underwriting.
  NOTE 1: Disputed derogatory credit account of a non-purchasing spouse
  in a community property state are not included in the cumulative balance
  for purposes of determining if the mortgage application must be
  downgraded to a “refer.”
  NOTE 2: Disputed medical collections are excluded from the $1000 limit
  as are derogatory credit accounts resulting from identity theft, credit theft
  unauthorized use, etc. However, documentation must be provided to
  conclusively support the disputed status. Documentation might entail
  police reports, letters from the creditor, etc.
  II. ML 2013-26 – Back to Work-Extenuating Circumstances
  The guidance provided in ML 13-26 requires loans to be manually
  underwritten. For this reason Crescent cannot approve loans that need these
  credit underwriting leniencies. III. ML 2013-29 – Application of Unused Funds from

Short-sale or Foreclosure Guidelines for a Kentucky FHA Loan:

If you have experienced a short-sale or foreclosure, FHA states that you must wait 3 years from the date of the sale to obtain FHA financing again. And important note is this: The waiting period starts not when you were discharged from the home or bankruptcy, the waiting period starts when the home is sold and the deed transferred at the courthouse. 

This is important to remember because a lot of people think it starts when they vacate the home or when there bankruptcy is discharged if the mortgage was in the bankruptcy, but it does not!!! The date used to end the waiting period starts when the deed is transferred at the courthouse from the owner to back to bank or whomever buys the home in the default. 

Delinquent Federal Debt (Taxes, Student Loans) Kentucky FHA Loan Requirements:

If you have a delinquency with the Federal Government, this could hurt your chances of getting approved for a FHA backed Mortgage Loan. Here is why:

All FHA participants are ran through the CAVIRS Alert System administered by HUD to check to see if the mortgage applicant is delinquent  to the Federal Government. This usually arises from an IRS income tax lien, over-payment on a social security claim, or lastly, a defaulted student loan. 

A lot of the times FHA borrower don't realize that if they don't pay there Federal backed student loans, they go into default and this will hold you up from getting a FHA loan or possibly they will hold your tax refund. 

If you have been delinquent on your student loans, you have to call and get on a 9 month repayment plan with them and they will clear you of your CAVIRS Alert. The payment plan can be as little as 5 or $10 a month, but the important thing is to get started so this will improve your credit rating too along with releasing the liens against you for other federal assistance like tax refunds, social security payments and benefits to name just a few. 

I have done many FHA loans in Kentucky where they have rehabbed their Student loans if they are backed by Federal government and got them loan after 9 months. 

If you happen to have an agreement already worked-out with the IRS or student loan creditors, sometimes we can take that arrangement and get you approved sometime with FHA depending on the lender. 

Child Support Obligations Kentucky FHA Loan Requirements:

If the credit report shows a delinquent child support agreement, the FHA Government Underwriter will want to see the current child support agreement and what the monthly payment is so as to make sure they have your debt to income ratio figured correctly. You can have a delinquency report of child support on your credit report and still get an FHA loan. 

 It is okay to be paying child support ,a lot of times it shows on a borrower's pay stubs, and if so, we simply use that child support obligation to use for debt to income ratio qualifying. 

As you can see, it is quite possible to buy a home in Kentucky with past bad credit. I work with a lot of mortgage applicants that has experienced credit issues in the past, but with the right direction and guidance, I can possibly get you into a home in 2020. 

Put my 20 years of Kentucky Mortgage Experience to work for you . 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708
kentuckyloan@gmail.com

Labels: bad credit, Bankruptcy, child support, collections, credit, Credit Score, credit score and bankruptcy, Disputed Accounts, Fico Score, foreclosure, Judgements, kentucky mortgage bad credit, student loans

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/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

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.  

Louisville Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Zero Down Payment Home Loans | October 9, 2018 at 3:33 pm | Tags: deeds-in-lieu of foreclosure, fha foreclosure, fha mortgage, Foreclosure, foreclosure hud ky, foreclosures, housing, kentucky fha mortgage, Short Sale or Deed-in-Lieu | Categories: foreclosure, HUD Foreclosure, KY FHA LOANS | URL: https://wp.me/p1gxai-3iE