Kentucky FHA Loan Guidelines


hud-100-incentive-program-fha-home-loan-group-1gdsgdsgdfgdHere is my Top 5 List for getting a Kentucky FHA Mortgage Loan: 1.A Low Down Payment –  Kentucky FHA Mortgage Loans only require a 3.5% down payment. And what makes that even more attractive is tha…

Source: Kentucky FHA Loan Guidelines

 

FHA Guidelines: How to Qualify for an FHA Loan

The first step to qualifying for an FHA loan is to work with a loan officer at an FHA approved lender. General FHA guidelines that the loan officer will discuss with you include:

  • Documenting an employment history over the last two years. FHA guidelines consider the last two years of employment and look at a steady pay history or employment with the same employer.
  • Providing a valid social security number and proof that you’re a resident of the United States. There are exceptions for resident aliens, but these exceptions will vary by lender.
  • Producing the necessary down payment. FHA loans require a minimum down payment of 3.5% when buying a home — but the down payment may be a gift under certain conditions.
  • Performing the necessary due diligence. The property will need to be inspected by an FHA appraiser and an FHA approved appraisal must be done.
  • Assessing how much you can afford. Although there is some flexibility, the total monthly mortgage payment generally should not exceed 30-32% of your gross monthly income.
  • Assessing your level of debt. Your total debt should not be more than 43% of your gross monthly income. Again, there is some flexibility with this number, but this is a good guideline.
    • Note from mortgage professional, Albert Bui, “the 43% DTI to income is mainly a guideline max for many loans out on the market to comply with certain qualified mortgages (QM) guidelines however in reality the max on FHA I’ve seen is 46.99% on the front ratio (housing payment only) and 56.99% on the backend when factoring in all other obligations. So this means you can borrow up to 46.99% on the front ratio for your housing payment but it doesn’t mean the borrower should max it out, rather they “can.”
  • Knowing your credit score. Minimum credit scores now apply with FHA loans and can vary by lender. A credit score of 580 and above requires a 3.5% down payment, and a credit score of 500-579 requires a 10% down payment. Credit score requirements will vary by lender.
    • According to Mr. Bui, “a 3.5% down payment is the min however there are many down payment assistance (DPA) programs that will either grant you the 3.5% for free with no repayment’s, offer the borrower a 3.5% community 2nd loan that is silent (no payment) and may be forgivable after a certain period of time, or a 2nd that has a silent payment but is due at a certain period of time or payoff in the future. So you can bring in as little as $0.00 with qualifying income or additional requirements.”
  • Disclosing prior bankruptcies. If you have had a bankruptcy that has been discharged, the waiting period is 2 years.
  • Disclosing prior foreclosures. If you have had a foreclosure, the waiting period is 3 years, and you must have good credit

https://www.biggerpockets.com/users/Fin_savvy

Kentucky Mortgage Resources to help save your home and get current on your mortgage


State

Approved Foreclosure Intervention/Default Counselors and Legal Aid Directory
Complete List of agencies, contact information, and the counties they serve

Better Business Bureau
The Better Business Bureau offers the “Reliability Report” which serves as a business report card.  Consumers are encouraged to check the report before they do business with an unfamiliar company.
http://www.bbb.org

Kentucky Attorney General
The state’s Attorney General protects consumers from crimes of all types.
Consumer protection:  (888) 432-9257
Identity theft:  (800) 804-7556
http://ag.ky.gov/

Kentucky Cabinet for Health and Family Services
Food stamps, health care, Medicaid, child care assistance, child support, heating and utility assistance.
http://chfs.ky.gov

Kentucky Department of Financial Institutions
The state’s Department of Financial Institutions supervises the financial services industry.

Beginning January 1, 2009, all mortgagees shall provide the “Notification to Homeowners of the Kentucky Homeownership Protection Center” document to all Kentucky borrowers, as required by KRS 286.2-020. This form is available to download by going to http://www.kfi.ky.gov/nondepository/khpc.htm.

Consumers can call to check background and license status of their loan officer, file a complaint or to report fraud.
(502) 573-3390
(800) 223-2579
http://www.kfi.ky.gov


National

U.S. Department of Agriculture-Rural Development Office
1-800-793-8861
www.rurdev.usda.gov

U.S. Department of Housing and Urban Development (HUD)
www.hud.gov

U.S. Department of Veterans Affairs (Veterans Administration)
1-800-827-1000
www.va.gov

Fannie Mae
1-800-7FANNIE (1-800-732-6643)
Freddie Mac
Information on how to buy a home and avoid foreclosure as well as financial calculators and budgeting tools.
http://www.freddiemac.com/avoidforeclosure/who_to_contact_for_help.html#sources

Calculators and tools: http://www.freddiemac.com/corporate/buyown/english/calcs_tools/

Federal Trade Commission
Consumer protection, information and complaint procedures.
1-877-FTC-HELP (1-877-382-4357)
TTY: 1-866-653-4261
Main site: www.ftc.gov/
Credit repair facts: www.ftc.gov/bcp/conlin/pubs/credit/repair

National Foundation for Credit Counseling
Consumer debt advice
www.nfcc.org.

Annual Credit Reports
www.annualcreditreports.com

Equifax
Credit reports, credit fraud protection and credit dispute information.
www.equifax.com

Experian
Credit reports, credit fraud protection and credit dispute information.
www.experian.com/

TransUnion
Credit reports, credit fraud protection and credit dispute information.
www.transunion.com

Internal Revenue Service
For Individuals: 1-800-829-1040
For Businesses: 1-800-829-4933
For Hearing Impaired: 1-800-829-4059 (TDD)
Hours of Operation: Monday through Friday, 7 a.m. to 10 p.m. local time (Alaska & Hawaii follow Pacific Time)
www.irs.gov


Local

Counselors
The Kentucky Homeownership Protection Center works with counseling agencies to provide foreclosure prevention and intervention counseling services to Kentucky residents. If you are in danger of foreclosure or need budgeting and credit help, contact the Protection Center. A representative will call you to schedule an appointment with a counselor in your area at no cost to you.

Dial 2-1-1
Some areas of Kentucky have 2-1-1 service which you can call for additional services. Where available, 2-1-1 can help locate the services you need including food, utilities, medical care, toiletries, household items, furniture and security deposits for rental units.

The Salvation Army
The Salvation Army may have funding available to assist homeowners who are behind on their mortgage payments. Visit the Salvation Army Web site to find a location near you.

Churches
Contact your church to find out if they have services available. Churches will often assist parishioners in need.Image