Kentucky First Time Home Buyer Questions to Ask Your Lender?

via Kentucky First Time Home Buyer Questions to Ask Your Lender?

 

There are basically 4 mortgage programs for first time home buyers in Kentucky to consider:

1. FHA LOANS IN KENTUCKY

Kentucky FHA loans are a popular choice in Jefferson County Kentucky first time home buyers
because they allow the least down payment of 3.5%, vs Fannie Mae which now requires a 5% investment on primary residences.

The current credit score requirements center around the 580 score for most FHA loans in Kentucky,
Even though FHA insure a mortgage loan down to a 500 credit score or lower sometimes, it is very
difficult to find a lender that will approve the loan with scores below 620. Keep that in mind.

The house payment will need to be around 30% of your gross monthly income. For example if
you gross around $3000 a month, then the maximum mortgage payment you would qualify
would be $1000 a month. If the loan comes back as an accept, the debt to income ratio can be
substantially higher than the 31% rule.

All FHA loans are pre-approved through an AUS, an automated underwriting system upfront
that will dictate your loan approval. The software underwriting engine looks at your credit, income, assets and figures your loan approval and will recommend an accept, refer/eligible, or refer/ineligible, or out of scope.

Most FHA investors will want a Accept on your underwriting findings to do a loan. It it comes back
referred, then there are additional conditions or overlays that could stop your loan from being approved.

2. Kentucky VA Home Loans

Kentucky VA loans require no down payment but you must have a VA certificate of Eligibility issued by the Veterans Administration to purchase a home using your VA loan entitlement.

The current credit score that most Kentucky VA lenders want is 500. There can be no bankruptcies or
foreclosures in the last two years with good reestablished credit.

The maximum debt to income ratio is 41% with a residual income of around $1000 a month after you pay all your bills. For example, if you make $4000 gross monthly, then the maximum house payment
along with your other household bills would be set at $3000 a month so as you have the $1000 residual income requirement met. There are some variances on the residual income to whereas it is based on the number of people living in the household and which state you live in.

3. Kentucky USDA/Rural Housing:

Kentucky USDA or Rural Housing loans are not available in the more highly populated counties in Kentucky .The counties of Jefferson and Fayette Counties, parts of Boone, Kenton and Campbell, parts of Mccracken County, and parts of Bowling Green, Richmond, Frankfort, Hopkinsville, and Owensboro  and Henderson County. are not eligible for USDA loans.

Kentucky USDA loans require no down payment and are subject to income and property eligibility requirements by County..

Check Kentucky USDA Income Limits Here”—–>>>>

Check Kentucky USDA Property Eligibility Limits Here—>>>>

All Kentucky Rural Housing Loans are ran through GUS, Guarantee Underwriting System, an
online to determine your loan approval The Automated Underwriting engine will come back with an Accept, Refer, or Ineligible.
Most Kentucky USDA mortgage investors want an Accept on the initial underwriting approval to do the loan or at least a 620 to 640 score to do a manual underwrite on the loan.
640 is the score that most USDA lenders want, but USDA will go down to a 580 credit score in their
guidelines but it is very difficult to get approved. If you have a score below 640 and trying to go USDA, work on getting your credit scores up first.

4. Kentucky Housing Corp or KHC

KHC is used for mostly applicants in urban areas of Kentucky that don’t have access to USDA or other government agencies to buy a home with no down payment.

A minimum of 3.5% down payment is required with this loan. Down payment assistance loans are available from $4500-$6,000, and are paid back over a period of ten years. They are typically offered to buyers with limited cash reserves and carry an interest rate of 1 to 5.5%. These loans can make a critical difference to buyers for whom the down payment is an obstacle. Buyers whose 3.5% down payment is less than the $6000 limit may choose to use the remainder of a down payment loan to pay closing costs, further reducing the amount needed to bring to closing.

 

There are 4 basic things that a borrower needs to show a lender in order to get approved for a mortgage.

2020 Welcome Home Program for Kentucky Home Buyers.

via 2020 Welcome Home Program for Kentucky Home Buyers.

What is the Welcome Home Program?

The Welcome Home Program (WHP) offers grants to fund reasonable down payments and closing costs incurred in conjunction with the acquisition or construction of owner-occupied housing by low- and moderate-income homebuyers. The grants are limited to $5,000 per homebuyer and Members are subject to an aggregate limit of $200,000 per offering. All funds are reserved for specific homebuyers purchasing specific homes and cannot be transferred to other homebuyers or to other homes. Welcome Home funds will be available for reservation on a first-come, first-served basis beginning at 8:00 AM ET on March 3, 2020, and will remain available until all funds have been reserved.

 

Who Can Use the WHP?

The FHLB has established a set-aside of Affordable Housing Program (AHP) funds to help create homeownership. These funds are available to Members as grants to assist their mortgage loan applicants in the home buying process. This is our most widely used program, ideally suited to the needs of community lenders and their customers.

 

What are the Program Requirements?

Below is an abbreviated list of program eligibility requirements:

• The total income for all occupants must be at or below 80 percent of the Mortgage Revenue Bond (MRB) limit for the county and state where the property is located. The FHLB has an Income and Affordability Workbook to assist in determining household income eligibility.
• Homebuyers must contribute at least $500 of their own funds towards down payment and/or closing costs.
• WHP applicants do not have to be first-time homebuyers. However, all first-time homebuyers are required to complete a homeownership counseling program.
• WHP grant funds are intended only for homebuyers who qualify for the first mortgage based on their own merit. Co-signors and co-borrowers are not allowed unless they will occupy the home as their primary residence and their incomes are included in determining eligibility.
• WHP grant funds may be used in conjunction with other local, state and federal funding sources and with the FHLB Cincinnati’s Community Investment Cash Advance Programs.
• The Member who reserves the WHP funds must originate the first loan, but the loan may close in the name of a third party.
• The interest rate for the first mortgage may not exceed 7.50 percent.
• The interest rate for the second mortgage may not exceed 11.00 percent.
• Only second mortgages provided by formal organizations, community development financial institutions, housing finance agencies, non-profit organizations, etc. are acceptable.

All eligible property assisted with WHP funds is subject to a five-year retention mechanism (Retention Agreement), which may require the household to repay all, or a portion, of the subsidy, if the home is sold or refinanced within five years from the closing of the transaction.

 

How Do I Apply?

Information for Homebuyers

Reserving WHP Funds

Homebuyers must apply with one of our Member institutions. Click here to search our Member Directory.

Members may reserve funds via the Welcome Home Program link through the FHLB’s Members Only portal by submitting an online Reservation Request with supporting documentation. Instructions for accessing Members Only may be found here.

The FHLB will perform a preliminary review of the Reservation Request and the documentation submitted to determine eligibility of the homebuyer, availability of funds in the program, and availability of funds for the Member. If any of the information is incomplete, additional documentation or information may be required. Note: The Reservation Request will be denied upon receipt if a fully executed loan application is not included.

Written notification will be provided to the Member as to the homebuyer’s eligibility. Submission of a Reservation Request does not constitute an approval of funds. Funds are reserved only upon written notification of approval from the FHLB.

Please allow four weeks for the FHLB to review the Reservation Request and supporting documentation.

Disbursing WHP Funds

Welcome Home funds will only be disbursed after closing. The FHLB has some general guidance and specific instructions that Members and Closing Agents should use in closing mortgages using Welcome Home funds. Funds will be disbursed only to the extent they are required to fill the gap for down payment, closing costs, and counseling fees.

Members may submit a Request for Payment of Reserved Funding with supporting documentation via the Welcome Home Program link through the FHLB’s Members Only portal. Submission of a Request for Payment of Reserved Funding is not an approval of funds disbursement. Once the Request for Payment of Reserved Funding has been reviewed and approved, funds will be disbursed to the Member.

In the event the FHLB determines that funds were used for an ineligible expense, the grant will be reduced by the amount of the ineligible expense unless the household brings adequate funds to the closing to cover the amount of the ineligible expense. Under no circumstances will cash back to the homebuyer be permitted.

Please allow four to six weeks for the FHLB to review the Request for Payment of Reserved Funding and supporting documentation.

Kentucky Welcome Home Grant Income Limits for 2020

County	100% limits		80% limits
	1-2 Persons	3+ Persons	1-2 Persons	3+ Persons
Adair	$75,240	$87,780	$60,192	$70,224
Allen	$75,240	$87,780	$60,192	$70,224
Anderson	$68,800	$79,120	$55,040	$63,296
Ballard	$62,700	$72,105	$50,160	$57,684
Barren	$62,700	$72,105	$50,160	$57,684
Bath	$75,240	$87,780	$60,192	$70,224
Bell	$75,240	$87,780	$60,192	$70,224
Boone	$81,300	$93,495	$65,040	$74,796
Bourbon	$89,400	$104,300	$71,520	$83,440
Boyd	$62,700	$72,105	$50,160	$57,684
Boyle	$75,240	$87,780	$60,192	$70,224
Bracken	$97,560	$113,820	$78,048	$91,056
Breathitt	$75,240	$87,780	$60,192	$70,224
Breckinridge	$75,240	$87,780	$60,192	$70,224
Bullitt	$76,400	$87,860	$61,120	$70,288
Butler	$75,240	$87,780	$60,192	$70,224
Caldwell	$62,700	$72,105	$50,160	$57,684
Calloway	$62,700	$72,105	$50,160	$57,684
Campbell	$81,300	$93,495	$65,040	$74,796
Carlisle	$75,240	$87,780	$60,192	$70,224
Carroll	$75,240	$87,780	$60,192	$70,224
Carter	$75,240	$87,780	$60,192	$70,224
Casey	$75,240	$87,780	$60,192	$70,224
Christian	$60,900	$70,035	$48,720	$56,028
Clark	$89,400	$104,300	$71,520	$83,440
Clay	$75,240	$87,780	$60,192	$70,224
Clinton	$75,240	$87,780	$60,192	$70,224
Crittenden	$75,240	$87,780	$60,192	$70,224
Cumberland	$75,240	$87,780	$60,192	$70,224
Daviess	$68,500	$78,775	$54,800	$63,020
Edmonson	$75,240	$87,780	$60,192	$70,224
Elliott	$75,240	$87,780	$60,192	$70,224
Estill	$75,240	$87,780	$60,192	$70,224
Fayette	$74,500	$85,675	$59,600	$68,540
Fleming	$75,240	$87,780	$60,192	$70,224
Floyd	$75,240	$87,780	$60,192	$70,224
Franklin	$68,200	$78,430	$54,560	$62,744
Fulton	$75,240	$87,780	$60,192	$70,224
Gallatin	$97,560	$113,820	$78,048	$91,056
Garrard	$75,240	$87,780	$60,192	$70,224
Grant	$75,240	$87,780	$60,192	$70,224
Graves	$62,700	$72,105	$50,160	$57,684
Grayson	$75,240	$87,780	$60,192	$70,224
Green	$75,240	$87,780	$60,192	$70,224
Greenup	$62,700	$72,105	$50,160	$57,684
Hancock	$68,500	$78,775	$54,800	$63,020
Hardin	$67,600	$77,740	$54,080	$62,192
Harlan	$75,240	$87,780	$60,192	$70,224
Harrison	$75,240	$87,780	$60,192	$70,224
Hart	$75,240	$87,780	$60,192	$70,224
Henderson	$67,200	$77,280	$53,760	$61,824
Henry	$91,680	$106,960	$73,344	$85,568
Hickman	$75,240	$87,780	$60,192	$70,224
Hopkins	$75,240	$87,780	$60,192	$70,224
Jackson	$75,240	$87,780	$60,192	$70,224
Jefferson	$76,400	$87,860	$61,120	$70,288
Jessamine	$74,500	$85,675	$59,600	$68,540
Johnson	$75,240	$87,780	$60,192	$70,224
Kenton	$81,300	$93,495	$65,040	$74,796
Knott	$75,240	$87,780	$60,192	$70,224
Knox	$75,240	$87,780	$60,192	$70,224
Larue	$81,120	$94,640	$64,896	$75,712
Laurel	$62,700	$72,105	$50,160	$57,684
Lawrence	$75,240	$87,780	$60,192	$70,224
Lee	$75,240	$87,780	$60,192	$70,224
Leslie	$75,240	$87,780	$60,192	$70,224
Letcher	$75,240	$87,780	$60,192	$70,224
Lewis	$75,240	$87,780	$60,192	$70,224
Lincoln	$75,240	$87,780	$60,192	$70,224
Livingston	$62,700	$72,105	$50,160	$57,684
Logan	$75,240	$87,780	$60,192	$70,224
Lyon	$63,600	$73,140	$50,880	$58,512
Madison	$75,240	$87,780	$60,192	$70,224
Magoffin	$75,240	$87,780	$60,192	$70,224
Marion	$75,240	$87,780	$60,192	$70,224
Marshall	$62,700	$72,105	$50,160	$57,684
Martin	$75,240	$87,780	$60,192	$70,224
Mason	$75,240	$87,780	$60,192	$70,224
McCracken	$62,700	$72,105	$50,160	$57,684
McCreary	$75,240	$87,780	$60,192	$70,224
McLean	$82,200	$95,900	$65,760	$76,720
Meade	$62,700	$72,105	$50,160	$57,684
Menifee	$75,240	$87,780	$60,192	$70,224
Mercer	$63,200	$72,680	$50,560	$58,144
Metcalfe	$75,240	$87,780	$60,192	$70,224
Monroe	$75,240	$87,780	$60,192	$70,224
Montgomery	$75,240	$87,780	$60,192	$70,224
Morgan	$75,240	$87,780	$60,192	$70,224
Muhlenberg	$62,700	$72,105	$50,160	$57,684
Nelson	$79,320	$92,540	$63,456	$74,032
Nicholas	$75,240	$87,780	$60,192	$70,224
Ohio	$75,240	$87,780	$60,192	$70,224
Oldham	$76,400	$87,860	$61,120	$70,288
Owen	$75,240	$87,780	$60,192	$70,224
Owsley	$75,240	$87,780	$60,192	$70,224
Pendleton	$97,560	$113,820	$78,048	$91,056
Perry	$75,240	$87,780	$60,192	$70,224
Pike	$75,240	$87,780	$60,192	$70,224
Powell	$75,240	$87,780	$60,192	$70,224
Pulaski	$75,240	$87,780	$60,192	$70,224
Robertson	$75,240	$87,780	$60,192	$70,224
Rockcastle	$75,240	$87,780	$60,192	$70,224
Rowan	$75,240	$87,780	$60,192	$70,224
Russell	$75,240	$87,780	$60,192	$70,224
Scott	$89,400	$104,300	$71,520	$83,440
Shelby	$76,200	$87,630	$60,960	$70,104
Simpson	$62,700	$72,105	$50,160	$57,684
Spencer	$91,680	$106,960	$73,344	$85,568
Taylor	$62,700	$72,105	$50,160	$57,684
Todd	$75,240	$87,780	$60,192	$70,224
Trigg	$60,900	$70,035	$48,720	$56,028
Trimble	$91,680	$106,960	$73,344	$85,568
Union	$62,700	$72,105	$50,160	$57,684
Warren	$62,700	$72,105	$50,160	$57,684
Washington	$75,240	$87,780	$60,192	$70,224
Wayne	$75,240	$87,780	$60,192	$70,224
Webster	$75,240	$87,780	$60,192	$70,224
Whitley	$75,240	$87,780	$60,192	$70,224
Wolfe	$75,240	$87,780	$60,192	$70,224
Woodford	$74,500	$85,675	$59,600	$68,540

 

 

What is the Welcome Home Program?

The Welcome Home Program (WHP) offers grants to fund reasonable down payments and closing costs incurred in conjunction with the acquisition or construction of owner-occupied housing by low- and moderate-income homebuyers. The grants are limited to $7,500 for homebuyers who are honorably discharged veterans, active duty military personnel, reservists, or surviving spouses of service personnel and $5,000 for all other homebuyers. Members are subject to an aggregate limit of $200,000 per offering. All funds are reserved for specific homebuyers purchasing specific homes and cannot be transferred to other homebuyers or to other homes. Welcome Home funds will be available for reservation on a first-come, first-served basis beginning at 8:00 AM ET on March 2, 2020, and will remain available until all funds have been reserved.

 

Who Can Use the WHP?

The FHLB has established a set-aside of Affordable Housing Program (AHP) funds to help create homeownership. These funds are available to Members as grants to assist their mortgage loan applicants in the home buying process. This is our most widely used program, ideally suited to the needs of community lenders and their customers.

 

What are the Program Requirements?

Below is an abbreviated list of program eligibility requirements:

• The total income for all occupants must be at or below 80 percent of the Mortgage Revenue Bond (MRB) limit for the county and state where the property is located. The FHLB has an Income and Affordability Workbook to assist in determining household income eligibility.
• Homebuyers must contribute at least $500 of their own funds towards down payment and/or closing costs.
• WHP applicants do not have to be first-time homebuyers. However, all first-time homebuyers are required to complete a homeownership counseling program.
• WHP grant funds are intended only for homebuyers who qualify for the first mortgage based on their own merit. Co-signors and co-borrowers are not allowed unless they will occupy the home as their primary residence and their incomes are included in determining eligibility.
• WHP grant funds may be used in conjunction with other local, state and federal funding sources and with the FHLB Cincinnati’s Community Investment Cash Advance Programs.
• The Member who reserves the WHP funds must originate the first loan, but the loan may close in the name of a third party.
• The interest rate for the first mortgage may not exceed 7.50 percent.
• The interest rate for the second mortgage may not exceed 11.00 percent.
• Only second mortgages provided by formal organizations, community development financial institutions, housing finance agencies, non-profit organizations, etc. are acceptable.

All eligible property assisted with WHP funds is subject to a five-year retention mechanism (Retention Agreement), which may require the household to repay all, or a portion, of the subsidy, if the home is sold or refinanced within five years from the closing of the transaction.

 

How Do I Apply?

Information for Homebuyers

Reserving WHP Funds

Homebuyers must apply with one of our Member institutions. Click here to search our Member Directory.

Members may reserve funds via the Welcome Home Program link through the FHLB’s Members Only portal by submitting an online Reservation Request with supporting documentation. Instructions for accessing Members Only may be found here.

The FHLB will perform a preliminary review of the Reservation Request and the documentation submitted to determine eligibility of the homebuyer, availability of funds in the program, and availability of funds for the Member. If any of the information is incomplete, additional documentation or information may be required. Note: The Reservation Request will be denied upon receipt if a fully executed loan application is not included.

Written notification will be provided to the Member as to the homebuyer’s eligibility. Submission of a Reservation Request does not constitute an approval of funds. Funds are reserved only upon written notification of approval from the FHLB.

Please allow four weeks for the FHLB to review the Reservation Request and supporting documentation.

Disbursing WHP Funds

Welcome Home funds will only be disbursed after closing. The FHLB has some general guidance and specific instructions that Members and Closing Agents should use in closing mortgages using Welcome Home funds. Funds will be disbursed only to the extent they are required to fill the gap for down payment, closing costs, and counseling fees.

Members may submit a Request for Payment of Reserved Funding with supporting documentation via the Welcome Home Program link through the FHLB’s Members Only portal. Submission of a Request for Payment of Reserved Funding is not an approval of funds disbursement. Once the Request for Payment of Reserved Funding has been reviewed and approved, funds will be disbursed to the Member.

In the event the FHLB determines that funds were used for an ineligible expense, the grant will be reduced by the amount of the ineligible expense unless the household brings adequate funds to the closing to cover the amount of the ineligible expense. Under no circumstances will cash back to the homebuyer be permitted.

Please allow four to six weeks for the FHLB to review the Request for Payment of Reserved Funding and supporting documentation.

 

Additional Information and Technical Assistance

Documentation requested by the FHLB must be emailed to welcomehome@fhlbcin.com. Any documentation requiring an original signature must be mailed to:

FHLB Cincinnati
Welcome Home Program
P.O. Box 598
Cincinnati, OH 45201-0598

For more information or assistance, please contact the Housing & Community Investment Department at (513) 852- 7680 or toll-free (888) 345-2246 or email us at welcomehome@fhlbcin.com.

For assistance with Members Only, please contact the Service Desk at 800-781-3090.

 

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

 

 

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#57916http://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.