Kentucky USDA Rural Development Loans


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USDA Rural Development mortgages for Kentucky Home buyers

The U.S. Department of Agriculture mortgage program is for Kentucky home buyers that have no money to put down, have a stable 2 year job history,  no bankruptcies or foreclosures in last 3 years and the new house payment should be close to or not more than 1/3 of your gross monthly income, this is called effective income.

There is also a test for compliance income meaning cannot make more than a certain amount to use the USDA loan program in Kentucky. Most Kentucky counties are limited to $82k for a household of four, and up to $109k household income for a family of five or more.

 

Thy used an automated underwriting system called GUS to pre-approved Kentucky home Buyers. If your score, middle credit score of the three main bureaus of experian, equifax, and trans union is below 640, you will automatically get downgraded to a refer and it will make it more difficult to get approved for the USDA loan.

I would suggest to get your scores up to 640 before submitting your loan application, however a lot of lenders including myself will go down to a 620 score, but be ready to hand over your blood type and other documents. ūüėāūüėā

You don’t have to be a Kentucky first time home buyer people with low to moderate incomes who want to buy a home in an eligible area. They typically don’t want you to own another piece of real estate and if you have access to 20% down payment they will not let you use the program.

 

This program is not intended for working farms, so if the property has farm income, i.e. crops, cattle, livestock, or other income this will not work for USDA loan programs.

They will do loans on mobile homes that meet FHA standards and that are brand new. They will not finance a used mobile home.

 

To¬†get a Kentucky USDA loan, you work with a bank or other lender. The loan is backed by the USDA. You must be within certain income requirements ‚ÄĒ which depend on your area ‚ÄĒ and agree to use the home solely as a primary residence.

 

Like Kentucky FHA loans , Kentucky Rural Development USDA mortgages have fees. There is an upfront guarantee fee, which can be as much as 1.0 percentile of the principal loan amount, which is added to your loan. You also will have to pay a mortgage insurance fee which is .35% and this is called the annual fee. This is way cheaper than mortgage insurance premiums of 1.75% and .85% for the same comparison.

I you have questions about qualifying as first time home buyer in Kentucky for a Rural Housing or USDA loan , please call, text, email or fill out free qualification below for your next mortgage loan pre-approval.
http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
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/

 

Kentucky USDA Mortgage Upfront Guarantee Fee and the monthly mortgage insurance Annual fee


via Kentucky USDA Mortgage Upfront Guarantee Fee and the monthly mortgage insurance Annual fee

 

 

 

USDA home loans in Kentucky are also known as the Rural Development Loan or RHS Loans. It is one of the best options for home buyers that are currently looking for a home outside the urban areas of Lexington, Louisville, Bowling Green and Northern Kentucky that requires No Money Down.
Another major advantage of this home loan is it’s the fixed interest rate.  The fixed interest rate insulate buyers from interest rate fluctuations. You’ll have the same monthly loan repayment throughout the life of your loan.
100 percent Financing Kentucky USDA Rural Development Loans will allow you to roll up some of your closing costs into your monthly mortgage. While it is impossible to avoid closing costs of the home purchase, it is possible to have the seller pay for some of these costs and or arranged for them to be added to your total loan with minimal impact on your monthly payments.

Eligibility for Kentucky USDA Loans

When applying for eligibility for 100% USDA loans, There are six factors taken into account:
  • Loan income restrictions¬†Most household income limits are set between $86k for a family of four and up to $115k for a family of five or more see map >>>>>http://www.rd.usda.gov/files/RD-GRHLimitMap.pdf
  • Credit score¬†¬†You have three credit scores, they throw and the high and low score and take the middle score of each of the three main credit bureaus, Experian, Equifax, and TransUnion. Most lenders will want a 640 middle credit score due to the fact that GUS(Guaranteed¬†Underwriting¬†System)¬†will not give you an automated approval upfront if the middle score is below the 640 threshold. You may get a refer eligible on the¬†initial¬†pre-approval but a lot of¬†lenders will not honor a refer eligible USDA file.
  • Property Ownership¬†(Do you own other Property) In most cases, USDA will not allow you to use their program to purchase another home if you already have a home in your name. In some extreme cases, they will waive this if certain exceptions are met. You can call or email me for more details on this matter. The USDA loans are only¬†available¬†for single-family primary residences. No¬†rental homes or working farms are allowed on the USDA Home Loan¬†Program
  • Residential Location¬†(USDA Eligibility: ¬†to¬†check ‚ě°ÔłŹ‚ě°ÔłŹ¬†click here¬†) Is the property located in an Eligible area. See link above for¬†eligibility¬†boundaries for counties in Kentucky
  • Debt to Income Ratios: If your credit score is above 640, GUS will typically limit your backend ratio to 45% of your total gross income. The front end ratio, or the housing ratio, usually is centered around 30% to 35% range, with compensating factors such as assets or money in the bank to cover your new house payment, disposable income, high credit scores, and no rent payment shock. Rent payment shock is where your new house payment is much larger than your current rent payment. This only comes into play on lower credit scores.
  • Assets¬† I have noticed that with 3 or 4 months reserves you can typically get a loan approved with lower credit scores with payment shock on the new loan. Additionally, if you have access to 20% down payment in your checking or savings account, they will make you use your own money. If the money is in a 401k or other tax-deferred savings accounts this will not factor in and you can use the USDA loan program.
  • I can explain this more in detail if you want to call or email me.

 

 

Joel Lobb Senior  Loan Officer

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3
Louisville, KY 40223
phone: (502) 905-3708
 Fax:     (502) 327-9119
Company ID #1364 | MB73346E
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.¬† NMLS#57916¬†http://www.nmlsconsumeraccess.org/
. 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.