Kentucky USDA Rural Housing Changes for Below


USDA Advance Copy Notice HB-1-3555 Chapter 11


USDA has announced that Chapter 11 of the HB-1-3555 will be updated and an advanced copy has been provided.  Changes will become effective after USDA issues a Special Procedure Notice.

  • Clarification was added that revolving accounts with no outstanding balance are not required to be closed.
  • USDA eliminated guidelines provided that a retained property that has been rented for 24 months or longer may be omitted from the DTI, and
  • Added guidance that the income received from rents may only be included in the repayment calculation if the property has been rented for 24 mo. or more.
  • Guidelines were added that monthly payment for borrowers in debt management plans must be included in the DTI.
  • The calculation guidelines for Non-Fixed Student Loan Payments were updated removing the requirement for the greater of calculation to be used and added guidance for when the payment amount is zero.
  • Additional guidance was added that compensating factors supporting Debt Ratio Waivers for manually underwritten loans must be documented.
  • Clarification was added that federal, state and local taxes don’t need to be included in the DTI unless there is a payment plan in place.

Refer to the Advance Copy Notice HB-1-3555 Chapter 11 and Chapter 11: Ratio Analysis