Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky FHA Mortgage Information

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky FHA Mortgage Information: How to Qualify For a Kentucky FHA Mortgage Loan 1. Low Down Payment   –  FHA Mortgage Loans only require a 3.5% down payment. And what m...

Student-Loan Freeze Led to Big Credit-Score Gains

 

Student-Loan Freeze Led to Big Credit-Score Gains, N.Y. Fed Says

• Some 30 million student borrowers saw scores rise, study says
• Freeze is set to expire on Aug. 31 but Biden may extend it

Share of Borrowers by Credit Score

Credit scores for student loan borrowers increased dramatically

Here are some key takeaways from the New York Fed report.

Better Credit Scores

The share of student-loan balances held by subprime borrowers fell to 26% in 2021, from 36% in 2019. That’s primarily because loans owed to the federal government that were delinquent before the pandemic were marked as current under the forbearance policy, putting millions of households on a sounder financial footing. 

“The end of forbearance will have impacts on credit scores, borrowing, and household cash flow over the coming year for the 38 million federal borrowers that have benefited from the pause,” the New York Fed researchers wrote. “Some borrowers will enter delinquency or default.”

Growing Balances

With repayments on hold, about two-thirds of student-debt holders had balances that were growing or flat at the end of 2021, compared with just 48% in 2019. That’s an increase of roughly 3.2 million borrowers.  

There was also a shift in the typical size of debts, with larger loans accounting for a bigger share of the total. At the same time, 5.4 million people who were recorded as having student debt outstanding at the end of 2019 no longer owed anything by the end of 2021.

Loan Shifts

Since the pandemic, larger debts have increased as a share of total loans

Source: Federal Reserve Bank of New York Consumer Credit Panel / Equifax

DC Debt Leader

On average, student borrowers in and around the nation’s capital owed the most at the end of 2021. Washington DC topped the list, with an average debt of $53,769, while Maryland ranked second and Virginia fifth. 

Student Loans by State

Average balances vary widely across states

Source: Federal Reserve Bank of New York Consumer Credit Panel / Equifax

Note: As of Q4 2021, average balance

“Of the ten states (not including D.C.) with the largest median balance, seven belong to the Southern Census region (Georgia, Maryland, Virginia, North Carolina, South Carolina, Alabama, and Tennessee),” the report found.

Top 10 Student Loan Debt

Seven of top-10 largest belong to the Southern Census region

Source: Federal Reserve Bank of New York Consumer Credit Panel / Equifax

Note: Ranked by median loan amount

Once the forebearence period ends, loan amounts are anticipated to rise and delinquency rates across states in the South are expected to have worse outcomes.

 

 

https://www.bloomberg.com/news/articles/2022-08-09/student-loan-freeze-raised-credit-scores-dramatically-ny-fed

Kentucky FHA Acceptable Sources of Heat for Appraisals

Kentucky FHA Acceptable Sources of Heat for A FHA Mortgage Loan Approval

Many people ask me what types of heat sources are okay for homes where the borrower is using FHA to finance the property.

Here’s the information – and by the way, USDA (Rural Housing) uses FHA rules listed below as their heat source guidelines too.

General Guidelines

• All habitable rooms must have a heat source

• Certain areas of the country do not require a heat source if normal for the area (i.e., Hawaii, certain counties in Florida)

Wood Stoves & Solar Systems

• Acceptable with certification that they were installed according to manufacturer’s recommendations.

• Must ALSO have a conventional heat source in all living areas.

• Must also have a heat source to maintain 50 degrees F in rooms where plumbing is located.

(Example: electric baseboard heat in bathroom, kitchen and basement/crawl space where plumbing pipes are located.)

Floor Heaters

• Acceptable

• If needs repairs or insufficient heat source for home, will require upgrade to conventional heat system.

Non-conventional Heating Systems

• Space heaters or non-conventional heat sources must comply with local codes.

• If does not comply, conventional heating system must be installed.

Propane Tanks

• Must be located a safe distance from the home.

• Must have ownership of propane tank UNLESS only leased tanks are available and normal for the area.

• Propane furnaces located in crawl space or basement is not acceptable.

I’m sure I have not covered every possibility but give me a call if you have any questions or reservations about listing a home that you think may not have an acceptable source of heat.

https://birminghamappraisalblog.com/faqs/what-is-the-fha-rule-for-heating-and-cooling-systems/

Kentucky USDA Rural Housing Mortgage Lender: Credit Scores - Everything you need to know

Kentucky USDA Rural Housing Mortgage Lender: Credit Scores - Everything you need to know: https://www.kyjustice.org/topics/money-debt/credit-reports

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Louisville Kentucky First Time Home Buyer Programs

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Louisville Kentucky First Time Home Buyer Programs: Kentucky First Time Home Buyer Programs If you are a potential Louisville Kentucky First Time home buyer first time home buyer in ...

Louisville Kentucky VA Home Loan Mortgage Lender: Kentucky VA Home Pest Termites Inspection Fees and...

Louisville Kentucky VA Home Loan Mortgage Lender: Kentucky VA Home Pest Termites Inspection Fees and...:  Veterans Benefits Administration Circular 26-22-11 Department of Veterans Affairs June 15, 2022 Washington, D.C. 20420 Pest Inspection Fees...

Kentucky VA Home Pest Termites Inspection Fees and Repairs cost for Veterans

 Veterans Benefits Administration Circular 26-22-11

Department of Veterans Affairs June 15, 2022 Washington, D.C. 20420

Pest Inspection Fees and Repair Costs

1. Purpose. This Circular addresses the Department of Veterans Affairs policies regarding wood destroying pest inspection fees and repair costs.

2. Background. Historically, VA has authorized, as a local variance, that Veterans may be charged for a wood destroying pest inspection report in a limited number of states and territories.1 Localities susceptible to termites and other wood destroying pests, however, are on the rise. Accordingly, VA requires, as a Minimum Property Requirement, a wood destroying pest inspection report for certain properties located in an area on the Termite Infestation Probability Map2 where the probability of termite infestation is “very heavy” or “moderate to heavy.”3 If applicable, the VA Notice of Value (NOV) will be conditioned for this requirement and MPR repairs identified on a wood destroying pest inspection report must be completed prior to guaranty.4

3. Action. Effective immediately, VA is authorizing in advance, as a local variance, that Veterans may be charged wood destroying pest inspection fees, where required by the NOV. Veterans may also pay for any repairs required to ensure compliance with MPRs. Veterans are encouraged to negotiate the cost of the wood destroying pest inspection and repairs with the seller.

a. Documentation for Audit Purposes. An itemized invoice identifying the Veteran and the property is required to verify the cost on the Closing Disclosure Statement (CD). Lenders should include the invoice(s) to support the cost of the inspection and any repairs in the loan file if the loan is selected for Full File Loan Review (FFLR).

4. Paperwork Reduction Act. The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. § 3501-3520) and assigned OMB control number 2900-0515. In accordance with the Paperwork Reduction Act, VA may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number

1 38 C.F.R. § 36.4313(d)(1)(ix).

2 https://basc.pnnl.gov/images/termite-infestation-probability-map-adapted-2021-international-residential-code-irc-figure.

3 VA Lenders Handbook, Chapter 13, Topic 8.c.

4 38 U.S.C. § 3704(a), 38 C.F.R. § 36.4351.

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/

 

Louisville Metro Down Payment Assistance Program

 

Down Payment Assistance Program

Applications for this program will reopen on Monday, July 18.

The Louisville Metro Down Payment Assistance Program provides low- to moderate-income homebuyers with down payment and closing cost assistance for purchasing a home in the Louisville Metro area. Funds can be applied to the purchase of an existing or newly constructed home and are NOT limited to first-time homebuyers.

Down Payment Assistance is in the form of a partially forgivable loan with 0% interest. Homebuyers must occupy the purchased home as their primary residence for a period of 5 – 15 years, depending upon the amount of assistance received. By the end of that specified period, 50% of the loan shall be forgiven. The remaining balance is not due until the sale of that home.   The maximum amount of assistance per homebuyer will be no more than 20% of the purchase price, but also based on the need the individual buyer. Section 8 Homeownership clients are encouraged to apply.  

Goals of the Down Payment Assistance Program

• Encourage homeownership, throughout Louisville Metro, which is economical to low-moderate income consumers in order to assist in preventing future foreclosures.
• Encourage mixed-income neighborhoods and the de-concentration of poverty.
• Encourage homeownership in Metro’s Neighborhood Revitalization Strategy Area – Russell.
• Assist homebuyers in becoming informed consumers in order to successfully navigate real estate transactions and understand the responsibility of homeownership.
• Encourage reinvestment in Louisville Metro’s vacant and abandoned properties.

Eligibility

• Household income at or below 80% of the area median income.

Persons in Household	1	2	3	4	5	6
80% AMI	$47,450	$54,200	$61,000	$67,750	$73,200	$78,600

 

• Homebuyer(s) already pre-approved for a mortgage from a local financial institution.
• Homebuyer(s) credit - no unpaid collections, past due balances or un-discharged bankruptcies. (Exception: Medical collections up to $10,000.00.)
• Homebuyer(s) has at least $1,500 in savings.
• Homes eligible for assistance must meet the Home Ownership Value Limits below.

Existing Homes

1-unit	2-unit (duplex)	3-unit (triplex)	4-unit (fourplex)
$220,000	$249,000	$302,000	$374,000

 

New Homes

1-unit	2-unit (duplex)	3-unit (triplex)	4-unit (fourplex)
$257,000	$329,000	$399,000	$494,000

 

How to Apply

1. Complete homebuyer counseling (6-hr minimum) from a HUD-approved counseling agency. If applying with co-applicant, both must complete. Married couples must apply as co-applicants.
2. Apply to the Down Payment Assistance Program by clicking the green button below. Please allow 30 days for Metro review and verification.
3. Homebuyer(s) receives letter of eligibility, stating entrance or denial into Homebuyer Assistance Program.
4. Homebuyer(s) engages Realtor to assist in home search.
5. Upon an accepted sales contract, homebuyer(s) submits Home Purchase Packet, executed sales contract, and primary loan documents to Metro.
6. Metro staff underwrites the loan and presents to the Case Review Board.
7. Homebuyer(s) receives conditional commitment letter from Metro, stating the amount of assistance available to purchase that home.
8. Metro Office of Housing inspector coordinates with Realtor. Home must receive a passing inspection in order to receive Metro assistance.
9. Lender, Realtor, and Metro coordinate with the homebuyer to close on the home.
10. To apply now, click here

 LOUISVILLE, Ky. Low to moderate-income homebuyers in the Louisville Metro who are seeking assistance with down payments and closing costs can now apply for the city’s Down Payment Assistance Program.

Applications for the program reopened on July 18 for the purchase of an existing or newly constructed home, according to Louisville Metro Government.

A release states program funds are not limited to first-time homebuyers.

The funds will be used as a partially-forgivable loan with 0% interest, where homeowners will need to occupy their purchased home for a period of five to 15 years.

Following that period, 50% of the loan will be forgiven, and the rest of the balance will not be due until the sale of the home.

Officials said the Down Payment Assistance Program encourages home ownership in the Louisville Metro and assisting potential homebuyers in making real estate transactions to understand the responsibilities of homeownership.

The program is available to residents with a household income at or below 80% of the area median income, homebuyers who are already pre-approved for a mortgage and have no unpaid collections or past due balances on their credit.

For more information and how to apply, click or tap here.

Applicant Resources 

DPA Brochure Program Handbook
DPA FAQs

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/

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