Source: Kentucky Housing Loans with Government Shutdown
Partial Federal Government Shutdown
Affects Loan Programs
The partial shutdown of the federal government is affecting some of the first mortgage programs through Kentucky Housing Corporation (KHC).
RHS Guarantee Loans
- KHC will not purchase or close a loan without the RHS Conditional Commitment and tax transcripts.
Verification of Employment (VOE) on Conventional, FHA, and RHS Loans for Federal Employees
- KHC will require a VOE within 10 days prior to closing.
- The only exceptions will be conventional loans for military personnel who use their Leave and Earnings Statement (LES), or if their employment was validated by Desktop Underwriter (DU) service and follows all conditions.
- KHC will follow agency guidelines that are in place during the partial federal government shutdown.
Federal Tax Transcripts and Social Security Validation
- If federal tax transcripts or validation of social security numbers are required per underwriting, or are listed as an automated underwriting engines (AUS) finding within DU, then applicants will be required to provide copies prior to closing or purchase of a loan.
KHC Interest Rate Lock
If you have an existing interest-rate lock that will need an extension due to the partial federal government shutdown, please email your loan officer at the KHC lender handling your loan.
Here 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
Assets: Assets are not required; however, any assets disclosed must be supported with appropriate documentation Satisfactory explanation and documentation should be provided for large deposi…
Source: Bank Statement Basics for A Kentucky Mortgage Loan Approval for USDA, KHC, FHA, VA, Fannie Mae and Rural Housing Mortgage Loans
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