Kentucky VA Loan Guidelines


via Kentucky VA Loan Guidelines

Kentucky VA Loan Guidelines

Exception Maximum Loan

IRRRLs

  • Existing VA loan balance, plus
  • The cost of any energy efficiency improvements up to $6,000, plus
  • Allowable fees and charges, plus
  • Up to two discount points, plus
  • VA funding fee.

(Lenders must use VA Form 268923, IRRRL Worksheet, for the actual calculation.)

a. Does VA have Maximum Loan Amounts?
Unlike other home loanprograms, there are no maximum dollar amounts prescribed for VA-guaranteed loans. Limitations on VA loansize are primarily attributable to two factors:1.   Lenders who sell their VA loans in the secondary market must limit the size of those loans to the maximums prescribed by Government National Mortgage Association (GNMA) or whatever conduit they use to sell the loans.2.   VA limits the amount of the loan to the reasonable value of the property shown on the NOV plus the cost of energy efficiency improvements up to $6,000 plus the VA funding fee, with the following exceptions.

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3.  Maximum Loan, Continued

a. Does VA have Maximum Loan Amounts? (continued)
Exception Maximum Loan
Regular refinancing loan (cash-out)
  • 100 percent of the VA reasonable value, plus
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.
Loans to refinance are:

the veteran at an

interest rate higher

than that for the

proposed refinancing

loan.

The lesser of:

  • the VA reasonable value, or
  • the sum of the outstanding balance of the loan plus allowable closing costs and discounts, plus
  • (For construction loans, “balance of the loan” includes the balances of construction financing and lot liens, if any.)
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.
Graduated Payment Mortgage (GPM) loan on existing property
  • The VA reasonable value, minus
  • the highest amount of negative amortization, plus
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.

Reference:  See section 7 of chapter 7.

GPM loan on new home 97.5 percent lesser of:

  • the VA reasonable value or
  • the purchase price, plus
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.

Reference:  See section 7 of chapter 7.

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3.  Maximum Loan, Continued

b. Downpayment
Because VA loans can be for the full reasonable value of the property, no downpayment is required by VA except in the following circumstances:

  • If the purchase price exceeds the reasonable value of the property, a downpayment in the amount of the difference must be made in cash from the borrower’s own resources, and
  • VA requires a downpayment on all GPMs.

If a veteran has less than full entitlement available, a lender may require a downpayment in order to make the veteran a loan that meets GNMA or other secondary market requirements.  The “rule of thumb” for GNMA is that the VA guaranty, or a combination of VA guaranty plus downpayment and/or equity, must cover at least 25 percent of the loan.

4.  Maximum Guaranty on VA Loans

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
  • Subsection a has been updated to reflect the temporary increase in maximum potential guaranty for loans closed January 1, 2009, through December 31, 2011.
a. Maximum Guaranty Table
Public Law 110-389, the Veterans’ Benefits Improvement Act of 2008, signed October 10, 2008, provided a temporary increase in the maximum guaranty for loans closed January 1, 2009 through December 31, 2011.  The maximum guaranty now varies depending on the location of the property.  While VA does not have a maximum loan amount, there are effective “loan limits” for high-cost counties.  The limits are derived by considering both the median home price for a county and the Freddie Mac conforming loan limit.  To aid lenders in determining the maximum guaranty in high-cost counties, VA has created a Loan Limitchart, with instructions.  This will be updated yearly.

  • In general, maximum guaranty, assuming the veteran has full entitlement, is as shown in the table below.
Loan Amount Maximum Potential Guaranty Special Provisions
Up to $45,000 50 percent of the loan amount. Minimum guaranty of 25 percent on IRRRLs.
$45,001 to $56,250 $22,500 Minimum guaranty of 25 percent on IRRRLs.
$56,251 to $144,000 40 percent of the loan amount, with a maximum of $36,000. Minimum guaranty of 25 percent on IRRRLs.
$144,001 to $417,000 25 percent of the loan amount Minimum guaranty of 25 percent on IRRRLs.
Greater than $417,000 The lesser of:

  • 25 percent of the VA county loan limit, or
  • 25 percent of the loan amount

 

Minimum guaranty of 25 percent on IRRRLs

4.  Maximum Guaranty on VA Loans, Continued

a. Maximum Guaranty Table (continued) Note:  The percentage and amount of guaranty is based on the loan amount including the funding fee portion when the fee is paid from loan proceeds.For the maximum guaranty on loans for manufactured homes that are not permanently affixed (i.e., not considered real estate) see 38 U.S.C. 3712 and/or contact VA.

5.  Occupancy

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. The Law on Occupancy
The law requires a veteran obtaining a VA-guaranteed loan to certify that he or she intends to personally occupy the property as his or her home.  As of the date of certification, the veteran must either

  • personally live in the property as his or her home, or
  • intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time.

The above requirement applies to all types of VA-guaranteed loans except IRRRLs.  For IRRRLs, the veteran need only certify that he or she previously occupied the property as his or her home.

 

Example:  A veteran living in a home purchased with a VA loan is transferred to a duty station overseas.  The veteran rents out the home.  He/she may refinance the VA loan with an IRRRL based on previous occupancy of the home.

b. What is a “Reasonable Time?”
Occupancy within a “reasonable time” means within 60 days after the loan closing.  More than 60 days may be considered reasonable if both of the following conditions are met:

  • the veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and
  • there is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on a specific future date.

Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA.

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5.  Occupancy, Continued

c. When Can a Spouse Satisfy the Occupancy Requirement?
Occupancy (or intention to occupy) by the spouse satisfies the occupancy requirement for a veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time.Occupancy by the spouse may satisfy the requirement if the veteran cannot personally occupy the dwelling within a reasonable time due to distant employment other than military service. In these specific cases, consult your Regional Loan Center (RLC) to determine if this type of occupancy meets VA requirements.Note:  The cost of maintaining separate living arrangements should be considered in underwriting the loan.For an IRRRL, a certification that the spouse previously occupied the dwelling as a home will satisfy the requirement.

No family member or person other than the veteran’s spouse can satisfy the occupancy requirement for the veteran.

d. Occupancy Requirements
for Deployed
Active Duty Servicemembers
Single or married servicemembers, while deployed from their permanent duty station, are considered to be in a temporary duty status and able to meet the occupancy requirement.  This is true without regard to whether or not a spouse will be available to occupy the property prior to the veteran’s return from deployment.
e. Occupancy After Retirement
If the veteran states that he or she will retire within 12 months and wants a loan to purchase a home in the retirement location

  • verify the veteran’s eligibility for retirement on the specified date, and

– Include a copy of the veteran’s application for retirement submitted to his or her employer.

  • carefully consider the applicant’s income after retirement.

– If retirement income alone is insufficient, obtain firm commitments from an employer that meet the usual stability of income requirements.

Note:  Only retirement on a specific date within 12 months qualifies.  Retirement “within the next few years” or “in the near future” is not sufficient.

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5.  Occupancy, Continued

f. Delayed Occupancy Due to Property Repairs or Improvements
Home improvements or refinancing loans for extensive changes to the property which will prevent the veteran from occupying the property while the work is being completed, constitute exceptions to the “reasonable time” requirement. The veteran must certify that he or she intends to occupy or reoccupy the property as a home upon completion of the substantial improvements or repairs.
g. Intermittent Occupancy
The veteran need not maintain a physical presence at the property on a daily basis.  However, occupancy “as the veteran’s home” implies that the home is located within reasonable proximity of the veteran’s place of employment.  If the veteran’s employment requires the veteran’s absence from home a substantial amount of time, the following two conditions must be met:

  • the veteran must have a history of continuous residence in the community, and
  • there must be no indication that the veteran has established, intends to establish, or may be required to establish, a principal residence elsewhere.

Use of the property as a seasonal vacation home does not satisfy the occupancy requirement.

h. Unusual Circumstances
Discuss unusual circumstances of occupancy with the appropriate VA office or submit a description of the circumstances to the VA office for prior approval.

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5.  Occupancy, Continued

i. The Certification
The veteran certifies that the occupancy requirement is met by checking the appropriate occupancy block and signing:

  • VA Form 26-1802a, HUD/VA Addendum to the Uniform Residential Loan Application, at the time of loan application (prior approval loans only), and
  • VA Form 26-1820, Report and Certification of Loan Disbursement, at the time of loan closing (all loans).

This satisfies the lender’s obligation to obtain the veteran’s occupancy certification.

The lender may accept the occupancy certification at face value unless there is specific information indicating the veteran will not occupy the property as a home or does not intend to occupy within a reasonable time after loan closing.

Where doubt exists, the test is whether a reasonable basis exists for concluding that the veteran can and will occupy the property as certified.  Contact the appropriate VA office if the lender cannot resolve issues involving the veteran’s intent by applying this test.

6.  Interest Rates

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Requirement
VA no longer prescribes interest rates for VA-guaranteed loans.  The interest rate is negotiated between the veteran-borrower and the lender to allow the veteran to obtain the best available rate.
b. Changes to the Agreed Upon Interest Rate
The lender and borrower are expected to honor any lock-in or other agreements they have entered into which impact the interest rate on the loan.  VA does not object to changes in the agreed upon rate, as long as no lender/borrower agreements are violated.  The following procedures apply in such cases.Any increase in the interest rate of more than one percent requires

  • re-underwriting to ascertain the veteran’s continued ability to qualify for the loan,
  • documentation of the change, and
  • a new or corrected Uniform Residential Loan Application, (URLA) with any corrections initialed and dated by the borrower.

Reference:  For prior approval loans, see section 4 of chapter 5.

7. Discount Points

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Requirement
Veterans may pay reasonable discount points on VA-guaranteed loans.  The amount of discount points is whatever the borrower and lender agree upon.  Discount points can be based on the principal amount of the loan after adding the VA funding fee, if the funding fee will be paid from loan proceeds.
b. When Can Points be Included in the Loan?
Discount points may be rolled into the loan only in the case of refinancing loans, subject to the following limitations:Interest Rate Reduction Refinancing Loans A maximum of two discount points can be rolled into the loan.If the borrower pays more than two points, the remainder must be paid in cash.

Refinancing of Construction Loans, etc.

Loans to refinance are:

  • a construction loan,
  • an installment land sales contract, or
  • a loan assumed by the veteran at an interest rate higher than that for the proposed refinancing loan

Any reasonable amount of discount points may be rolled into the loan as long as the sum of the outstanding balance of the loan plus allowable closing costs and discount points does not exceed the VA reasonable value.

Reference:  See the maximum loan limitations in section 3 of this chapter.

Cash-out Refinancing Loans

While discount points cannot specifically be included in the loan amount, the borrower can receive cash from loan proceeds, subject to maximum loan limits (See section 3 of this chapter).  The cash received by the borrower can be used for any purpose acceptable to the lender, including payment of reasonable discount points.

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7. Discount Points, Continued

c. Changes to the Agreed Upon Discount Points
The lender and borrower are expected to honor any agreements they have entered into which impact the discount points paid on the loan.  VA does not object to changes in the agreed upon points, as long as no lender/borrower agreements are violated.  The following procedures apply in such cases.Any increase in discount points requires

  • verification that the borrower has sufficient assets to cover the increase,
  • documentation of the change, and
  • a new or corrected URLA with any corrections initialed and dated by the borrower

Reference:  For prior approval loans, see section 4 of chapter 5.

8.  Maturity

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Maximum Maturity
  • Amortized loans:  30 years and 32 days,
  • Nonamortized loans: 5 years.

In addition, every loan must be repayable within the estimated economic life of the property securing the loan.

The period for repayment of a loan is measured from the date of the note or other evidence of indebtedness.

b. Maturity Extending Beyond the Maximum
VA regulations provide that any amounts, which fall due beyond the maximum maturity automatically, fall due on the maximum maturity date. Thus, if a lender inadvertently makes a loan that exceeds the maximum maturity, it may still be subject to guaranty.However, the regulations also limit the amount that can be collected as a final installment, such as, they prohibit excessive ballooning.  The holder of a loan that violates this provision may desire to correct the situation through means which are legally proper in the jurisdiction.

9.  Amortization

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Requirement
All VA loans must be amortized if the maturity date is beyond 5 years from the date of the loan.  Loans with terms less than 5 years are considered term loans and need not be amortized.Generally, for amortized VA loans:

  • payments must be approximately equal,
  • principal must be reduced at least once annually, and
  • the final installment must not exceed two times the average of the preceding installments.

Exceptions to these requirements are made in the case of

  • GPMs – See section 7 of chapter 7,
  • GEMs – See section 8 of chapter 7,
  • alternative amortization plans prior approved by VA, and
  • construction loans.
b. Alternative Amortization Plans
Certain amortization plans which do not meet the requirements described in section a above may be used if approved in advance by VA.  A lender may submit an amortization plan to VA for prior approval if the plan:

  • is generally recognized; that is, is used extensively by established lending institutions, but
  • does not meet the requirements of approximately equal periodic payments and a reduction in principal not less often than annually.

Exception:  GPMs and GEMs.

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9.  Amortization, Continued

c. Special Provisions for Construction Loans
See “Amortization” in section 2 of chapter 7.
d. Standard and Springfield Plans
The Standard and Springfield plans satisfy VA amortization requirements.

  • The Standard plan provides for equal payments over the life of the loan.  The amount applied to interest decreases, with a corresponding increase in the amount applied to principal.
  • The Springfield plan provides for gradually decreasing payments over the life of the loan.  The amount applied to interest decreases, while the amount applied to principal remains constant.

10.  Eligible Geographic Locations for the Secured Property

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Where Can the Property be Located?
Real property securing a VA-guaranteed loan must be located in the United States, its territories, or possessions (Puerto Rico, Guam, Virgin Islands, American Samoa and the Northern Mariana Islands).

11.  What Does a VA Guaranty Mean to the Lender?

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
  • Subsection e has been updated to note that evidence of guaranty is issued through VA’s webLGY system.
a. Protection Against Loss
VA guarantees a portion of the loan, identified on the VA Loan Guaranty Certificate (LGC) by percentage and dollar amounts.  If a loss ultimately occurs on the loan, VA will reimburse the loan holder for all or part of such loss

  • limited by the stated percentage and dollar amount of the guaranty,
  • limited by any VA maximums for reasonable and customary foreclosure expenses, and
  • subject to the lender’s compliance with applicable law and regulations.
b. Lender Responsibility
It is the lender’s responsibility to comply with all laws and regulations related to the VA Loan Guaranty Program, and thereby prevent VA’s denial or reduction of a payment on a future claim.  A lender can accomplish this by ensuring that its employees who perform work related to VA lending

  • understand and comply with VA policies, procedures and regulations, and applicable law, and
  • direct questions to VA when issues arise that are not addressed in this handbook or other materials provided by VA.
c. When is a Loan that was Closed Automatically Guaranteed?
A loan is automatically guaranteed by VA upon closing (prior to issuance of the LGC) provided the loan was made by

  • a supervised or a nonsupervised lender with automatic authority, and
  • the lender complied with applicable law and regulations.

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11.  What Does a VA Guaranty Mean to the Lender?, Continued

d. When is a Prior Approval Loan Guaranteed?
A prior approval loan is also guaranteed by VA upon closing (prior to issuance of the LGC) provided

  • the closed loan matches the proposed loan upon which the Certificate of Commitment was based, and
  • the lender complied with applicable law and regulations.
e. What is Evidence of Guaranty?
Evidence of guaranty is VA Form 26-1899, Loan Guaranty Certificate, which is generated electronically via VA’s webLGY application.  The LGC represents tangible proof to the lender that VA’s guaranty is given in good faith.  It is contingent upon:

  • the veteran, property and purpose of the loan being eligible,
  • no fraud or material misrepresentation on the part of the lender, and
  • the lender’s compliance with applicable law and regulations.

For example, VA may deny or reduce payment on a future claim based on the lender or holder’s noncompliance whether or not VA has issued evidence of guaranty on the loan.

The LGC also has an audit indicator that, if noted Yes, lets the lender know the case has been identified for full review.  In these instances, the lender then needs to submit a complete loan origination package to the appropriate VA office for review.  Packages should be submitted within 15 days of the LGC being generated.

f. Total Loss of Guaranty
Willful fraud or material misrepresentation by the lender or holder, or by an agent of either, will relieve VA of liability for payment of any claim on the loan.  VA also has no liability in the case of

  • forgery on the note, mortgage, loan application, or other loan documents, or
  • a Certificate of Eligibility or discharge papers that are counterfeited, falsified, or not issued by the Government.

A holder of a VA loan who acquired the loan without notice or knowledge of fraud or material misrepresentation in procuring the guaranty will not be denied payment of any claim on the loan by reason of such fraud or material misrepresentation.

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11.  What Does a VA Guaranty Mean to the Lender?, Continued

g. Partial Loss of Guaranty
A holder of a VA loan who fails to comply with applicable laws and regulations may receive only partial payment of a claim if VA’s liability increases due to the holder’s noncompliance.  Material misrepresentation which is not willful has the same consequence.No claim will be paid on such loan until the amount of any increase in VA’s liability is known.  The burden of proof is on the holder to establish that VA’s increased liability is not due to the holder’s noncompliance or misrepresentation.Examples of noncompliance with applicable law and regulations which may lead to an increase in VA’s liability include:

  • failure to obtain and retain the required lien on property to secure the loan,
  • failure to include the power to substitute trustees,
  • failure to procure and maintain insurance coverage,
  • failure to advise VA as to default,
  • failure to provide notice of intention to begin foreclosure action,
  • failure to provide notice to VA in any suit or action, or notice of sale,
  • improper release, conveyance, substitution or exchange of security,
  • lack of legal capacity of a party to the transaction,
  • failure to assure that escrowed/earmarked funds are expended in accordance with the agreement, and
  • failure to take into consideration limitations upon the quantum or quality of the estate or property.

12.  Post-Guaranty Issues

Change Date
April 10, 2009, Change 9

  • This section has been changed to reflect present procedures, correct hyperlinks, and make minor grammatical edits.
a. Corrections to LGCs
LGCs are generated using data entered from several sources, including the VA Funding Fee Payment System (VA FFPS).  If a lender discovers an error in reported data, such as date of loan closing, beforethey have generated the LGC, they must access the VA FFPS system to make the correction.  This will then result in the correct closing date being shown when the LGC is obtained. If the error is discovered after the LGC has been generated, lenders will need to contact the appropriate VA RLC for assistance.  An LGC with minor typographical errors that do not compromise accurate identification of the loan is valid.
b. Replacement of Missing LGC with Duplicate
A lender may obtain duplicate LGCs at any time simply by accessing the system and reprinting the LGC.
c. Transfer of Loans
It is not necessary to notify VA of the assignment of a guaranteed loan.
d. Loan Assumptions
The assumption of VA-guaranteed loans for which commitments were made on or after March 1, 1988, requires the approval of VA (or certain lenders on VA’s behalf).

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12.  Post-Guaranty Issues, Continued

e. Paid-in-Full Loans
Holders of VA-guaranteed loans are required to electronically report the date the loan was paid-in-full in the VA Loan Electronic Reporting Interface (VALERI) system. Lenders are required to report paid-in-full loans to VA upon full satisfaction of the loan by payment or otherwise. Lenders/servicers are not required to mail LGCs to VA when a loan is terminated. Since this information will now be reported through VALERI, there is no need to have the actual LGC returned to VA upon termination of the loan.
f. Maintenance of Loan Records
Lenders must maintain copies of all loan origination records onVA-guaranteed home loans for at least 2 years from the date of loan closing.  Even if the loan is sold, the original lender must maintain these records (or legible copies) for the required period.Loan origination records include:

  • the loan application (including any preliminary application),
  • verifications of employment and deposit,
  • all credit reports (including preliminary credit reports),
  • copies of each sales contract and addendum,
  • letters of explanation for adverse credit items, discrepancies and the like,
  • direct references from creditors,
  • correspondence with employers,
  • appraisal and compliance inspection reports,
  • reports on termite and other inspections of the property,
  • builder change orders, and
  • all closing papers and documents.

Lenders must make these records accessible to VA personnel conducting audit reviews.

Residual Income for a Kentucky VA Loan Approval
Residual income is the amount of income remaining after housing expenses, income taxes, long-term obligations and other expenses have been deducted from the borrower’s total gross pay. VA requires a specific amount of monthly residual income be available for the borrower’s use. This amount is based on the family size, location of the property and loan amount.

  • Federal, state and local taxes must be entered in DU or LP. Taxes should be calculated using the most recently published tax charts by the IRS and state or local taxing authorities. Click here for Tax tables.
  • Maintenance and utility costs may be estimated at 14 cents per square foot.

Minimum Residual Income with DTI <=41% 

http://www.mylouisvillekentuckymortgage.com/p/va-loans.html

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/
 
http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 

 

 

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2018 Kentucky First Time Home Buyer Loan Programs


via 2018 Kentucky First Time Home Buyer Loan Programs

 

Getting a mortgage for a home can seem like a complicated and mysterious process. Just like any good investment, you should never buy anything that you don’t understand.  Knowing how the mortgage lending system works will relieve much of the stress and anxiety associated with making what is most likely the largest purchase of your entire life. This article will help you understand…

What You Need To Know About A Mortgage… BEFORE You Get One!!!

Qualifying for a Mortgage

Home LoansMortgage companies are in business to make money by lending money that is secured by an asset large enough to sell and recover their capital if the borrower is no longer able or willing to pay the payments. They are not in the business of owning property and would rather not have to foreclose on a loan, repossess the property and sell it to recapture their capital. This does happen but it is not their primary business. They would rather have their borrowers make their payments so that they could collect the interest and move on down the road. To increase their odds of that happening, mortgage companies look at several areas of your financial history to determine if you will meet their standards. This is called Qualifying for a Mortgage.

What the mortgage company finds when they look at these areas will help determine the type of mortgage that is available to you and the interest rate you will pay on the money that you borrow.

The areas that they are interested in looking at are:

Job History

Lenders want to know if you have been in your current job and/or profession for at least two years. They also want to know if you are retired or self-employed.

Income

TaxesMortgage lenders want to know how much your monthly income is before taxes are taken out (Gross Monthly Income). Typically you will be asked to provide check stubs for the last 30 days and Federal Tax Returns or W-2’s for the last two years to prove your income.

If you are self-employed and it is difficult for you to prove your gross income to the lender you may be able to get a “stated income” loan. If that is the route that you take, your income must be “reasonable” for your profession. Since stated income loans are riskier for the lender you will generally have a higher interest rate.

Credit History

Mortgage lenders really like it if you have a history of paying your bills on time. This is reflected in your credit report and FICO score. If you have “bad credit”, you are NOT automatically disqualified from getting a mortgage. Lower credit scores will increase the interest rate that you will be required to pay and sometimes that increase will be quite significant.

Debt Load

You can have an awesome job with an income to make Bill Gates jealous and a great credit score but if you have already acquired too much long term debt you may not qualify for the loan you want.

assetsAssets

Mortgage lenders will want to check your bank accounts to make sure that you have the cash necessary to pay the down payment and closing costs and that you have “reserves” available to make the loan payment. Often, the lender will require 3-6 months reserves. (Reserves can be in a 401K or other retirement account that you can pull the money out of)

Requested Loan Amount

The loan you are requesting will need to be proportional to your ability to make the payments. Be reasonable with your house buying expectations – don’t expect to buy a lot more house than you can afford. The recent housing bust defined the term “house poor” and got a lot of people into financial trouble. Again, mortgage lenders would much rather you make your monthly house payments because everyone loses if they have to foreclose.

Determining YOUR Mortgage Interest Rate

The market place determines the range of interest rates available for any mortgage and the lending rates change daily. The specific interest rate you will pay is based on how well qualified you are and the type of loan you want.

Interest rates are typically based on the answers to these questions:

How Good Is Your Credit Score? 

FICO ScoreThe most widely used score is the FICO score, the credit score created by Fair Isaac Corporation. Lenders use the FICO Score to help them make billions of credit decisions every day. Fair Isaac calculates the FICO Score based solely on information in consumer credit reports maintained by the credit reporting agencies.

FICO credit scores range from 300 to 850. That FICO Score is calculated by a mathematical equation that evaluates many types of information from your credit report, at that agency. By comparing this information to the patterns in hundreds of thousands of past credit reports, the FICO Score estimates your level of future credit risk.

With the top end of the credit score being 850, anything above about 720 is considered excellent. Some local lenders set 740 as the benchmark for their preferred interest rates. Having a lower credit score DOES NOT mean you will not get a loan. You may qualify BUT your interest rate will be higher than someone with better credit.

How Big Is Your Down-Payment?

down-paymentThe Down-Payment is the amount of your own money you are going to put into buying the property. The more money you put into the property on the front end, the lower the risk of you not paying the payments. The amount of your down payment also directly affects the amount of your loan (purchase price – down payment = loan amount). This is called the Loan to Value Ratio (LTV).

The LTV is the percentage of the value of the house that the mortgage will cover (loan amount / purchase price x 100). For example, the property you are interested in buying is selling for $100,000. You have $20,000 for the down-payment and want a mortgage for the other $80,000. The LTV for this mortgage is 80%.

Similar to the LTV is the Combined Loan to Value Ratio (CLTV). The CLTV is used when 2 loans are used to finance the home purchase. You may see or hear terms like “80-20” or “80-15-5”. This refers to the 1st lien percentage (80), the 2nd lien percentage (20 or 15) and the down payment percentage (5).

How Much Debt Do You Currently Have?

It only makes sense that the more debt you have the riskier the loan is for the lender. There is a finite amount of income in all of our households and it all gets allocated every month. Lenders use a “debt-to-income” ratio to determine how qualified you are for the loan based on how much debt you already have.

debt_to_income_ratioYour Debt to Income Ratio (DTI) is the percentage of your income that you owe in debt on a monthly basis. For example, if you make $5,000 per month, and have debt payments (car loans, credit cards, student loans, etc.) of $2,000, your DTI ratio is 40%. The higher this ratio is, the less likely you will be to qualify for a low interest rate.

Conventional loans typically have a qualifying ratio of 28/36. FHA loans will sometimes allow for a higher debt load of 29/41 qualifying ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to your mortgage. That includes the loan principal and interestprivate mortgage insuranceproperty taxeshomeowners insurance, and homeowner’s association dues.

The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes monthly payments for carsboatsmotorcycleschild support payments and monthly credit card payments.

 Example:  of a 28/36 qualifying ratio:

Gross monthly income of $5,000 x .28 = $1400 can be applied to housing.

Gross monthly income of $5,000 x .36 = $1,800 can be applied to recurring debt plus housing expenses

Example: of a 29/41 qualifying ratio:

Gross monthly income of $5,000 x .29 = $1,450 can be applied to housing.

Gross monthly income of $5,000 x .41 = $2,050 can be applied to recurring debt plus housing expenses

These are just general guidelines and everyone’s personal finances are unique. To get the real answer about how well you qualify and to determine how large a mortgage a local lender will offer contact one of our preferred lenders and visit with a loan officer.

Here is a KEY point to remember…

FICO KEYYour credit score is THE most vital piece of information

when qualifying for a loan.

I am a Dave Ramsey fan and I believe in paying cash but even Dave concedes when it comes to buying a house. In Financial Peace Dave calls the FICO score an “I love debt score” and brags about not having one. He even tells a story about trying to rent an apartment and he couldn’t because he doesn’t have a FICO score. He then says, “I can’t rent an apartment because I don’t have a FICO score… I could write a check and buy the whole complex but I can’t rent an apartment because I don’t have a credit score!” Which is a great story for someone that CAN write a check and buy the whole complex… The rest of us need to maintain a really good credit score.

If you’re ready to buy a new home

and want to shop around for the best deal on a mortgage…

Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping. In addition, the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.

What Type of Loan Are You Looking For?

40 year fixed, 30 year fixed, 20 year fixed, 15 year fixed, 10 Year Fixed, Adjustable Rate, etc. All of these loan types have different interest rate ranges.

Locking Your Interest Rate

Once you have completed a loan application, determined what type of loan you want and qualified for that loan you can “lock” the interest rate for that loan. Locking the Interest Rate means, for the period of the “lock” you are guaranteed that interest rate. Lock periods are typically 15, 30 or 60 days, although you may be able to get an extended lock period.

Rate LockOnce you lock your interest rate:

If you do not close on the loan before the lock period expires, you will NOT have a guaranteed interest rate anymore. And, the longer the lock period, the higher the rate will be. For example, a 15 day lock may be at 5.125%, a 30 day lock at 5.25%, and a 60 day lock at 5.375%. So, before locking your loan, be sure you are not locking for too long a time or for too short a time.

Interest rates fluctuate daily and may go up or down. By locking your rate, you are betting that rates will go up in the future.

 What does “Buying Down” the Interest Rate Mean?

You can reduce the interest rate on your mortgage by paying “points” at closing. A point is 1% of the value of the loan, so a point on a $200,000 loan is $2,000. If you “buy down” you loan to a lower interest rate you will have lower monthly payments and pay less interest over the life of the loan. However, “buying down” you loan to a lower interest rate means more money out of your pocket on the front end when you close the loan. You should do the math and weigh each side of the equation before making a decision about buying down the interest rate or not.

What Are The Closing Costs and Fees?

Closing CostsThere are four types of closing costs and fees…

Those charged by the mortgage company and/or mortgage broker, those charged by 3rd party vendors, those charged by the Title Company, Escrow Company or Escrow Attorney and Pre-Paid Charges.

Lender Fees

These can include loan origination fees and Broker fees which are usually a percentage of the loan amount; administrative fees and application fees, processing fees and underwriting fees. These last fees usually run from $100 to $500, and ALL of them are negotiable.

3rd Party Vendor charges

These are charges collected by the lender and paid to outside companies that provide a service. These are not usually negotiable and can include appraisal charges, flood certification fees, courier charges, document prep fees, mortgage lender attorney fees, etc.

Title Company charges

These are the fees charged by the Title Company, Escrow Company or Escrow Attorney. They are usually set by the state and are not negotiable. These charges include title insurance, attorney fees, state/county/city registration fees, etc.

Pre-Paid Charges

If the lender will be establishing an escrow account to pay taxes and insurance, the buyer will pre-pay taxes and insurance to establish an escrow account and will pre-pay the interest on the loan until the end of the month in which the loan closes.

 Does The Closing Date Really Matter?

The day you choose to close determines the amount of pre-paid interest you will have to pay. Closing at the end of the month means that you will pay less pre-paid interest. For example, if you close on October 1st you will pay 31 days of pre-paid interest. If you close on October 31st you will pay 1 day of pre-paid interest.

When Is My First Payment Due?

It doesn’t matter what day of the month you close on, you will not have your first loan payment due until a month has passed. So, if you close in October, your first payment is due in December – you get November for free!

What Is PMI?

pmi-basics1Private Mortgage Insurance (PMI) is required on all loans that have a LTV greater than 80%. PMI is an insurance premium that you pay every month as part of your monthly payment. However, PMI is not intended to protect you. PMI is insurance coverage that protects the mortgage lender against default on the loan. If you stop making your payments, the mortgage lender is paid a percentage of the loan amount (usually 25% to 35%) by the insurance company.

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Customer Testimonials

We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel’s website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services.

Angela Forsythe

“We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel’s website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him.” September 2016

Monica Leinhardt

“We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan.

Kayle Griffin

“Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010

Tim Beck

“Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.”

September 1, 2010 Nancy Nalley
“I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them.

August 23, 2012 Jon ClarK

“Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011

RICHARD VOLZ , Residential Sales , Remax Foursquare Realty
“When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgeable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say’s they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!”

August 21, 2010
Stacie Drake

 

“We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else.”

Melody Glasscock March 2014

 
Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn’t expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS.
Cee Bellisle August 2017

Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours.

 

Anderson Johnson April 2018

 

 

We moved from Michigan to Northern Kentucky area and we were really impressed. We got a USDA loan no money down and closed in less than 3.5 weeks. We shopped around online with other lenders but Joel was always first to respond and his rates were just a little better than other lenders. He kept us informed through the process along with our realtor and there was absolutely no surprises like we heard from other co-workers and friends that they experienced in their loan process. We have already referred another co-worker to Joel . He’s AWESOME!

Patty Kingston June 2018

 

Louisville Kentucky VA FIXED PROGRAM GUIDELINES


via Louisville Kentucky VA FIXED PROGRAM GUIDELINES

 

Down Payment And Closing Cost Assistance Kentucky Housing HHF DAP Funds 


KHC Loan Programs

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MRB

  • All MRB Kentucky Housing first mortgage loans are for a 30-year term at a fixed rate of interest.
  • The home you purchase through Kentucky Housing must be the only residential property you own and you must occupy the home as your principal residence while the loan debt is still outstanding.
  • To qualify, you must meet KHC’s regular MRB income guidelines, make a down payment or qualify for down payment assistance, be a US citizen or legal alien and have an acceptable credit history.
  • Some MRB KHC loans are subject to a federal recapture tax. Recapture is a federal income tax that the borrowers may have to pay if they have considerable growth in their income and they sell or transfer their KHC-financed home within 9 years.  However, KHC has implemented a Recapture Tax Guarantee Program for all loans that close after October 1, 2006.  The Recapture Tax Guarantee Program will reimburse homeowners if they are subject to pay the Federal Recapture Tax on their KHC mortgage loan upon the sale of their home.

Conventional

  • Insured by approved mortgage insurance company.
  • Minimum credit score of 660 or better.
  • Quick turnaround time, 20 percent down payment and no up-front or monthly mortgage insurance.

FHA

  • Insured by the Federal Housing Administration.
  • Down payments as little as 3.5 percent.
  • Can use DAP for 3.5 percent down payment requirement.
  • Upfront and monthly mortgage insurance.
  • Minimum credit score of 620.

VA

  • Guaranteed by the Veterans Administration for qualified military veterans.
  • No down payment if the property appraises for the sale price or greater.
  • Credit underwriting is flexible.
  • Minimum credit score of 620.
  • No monthly mortgage insurance payments.

RHS

  • Guaranteed by Rural Housing Services (RHS).
  • Home must be located in a rural area as defined by RHS.
  • No down payment if the property appraises for the sale price or greater.
  • Minimum credit score of 620.

GNMA Secondary Market

  • All GNMA KHC first mortgage loans are for a 30-year term at a fixed rate of interest.
  • The home you purchase through KHC must be occupied as your principle residence while the loan debt is outstanding.
  • To qualify, you must meet KHC’s GNMA income guidelines, make a down payment, or qualify for down payment assistance, be a U.S. citizen or legal alien and have an acceptable credit history.

FHA

  • Insured by the Federal Housing Administration.
  • Down payments as little as 3.5 percent.
  • Can use DAP for 3.5 percent down payment requirement.
  • Upfront and monthly mortgage insurance.
  • Minimum credit score of 620.

VA

  • Guaranteed by the Veterans Administration for qualified military veterans.
  • No down payment if the property appraises for the sale price or greater.
  • Credit underwriting is flexible.
  • Minimum credit score of 620.
  • No monthly mortgage insurance payments.

RHS

  • Guaranteed by Rural Housing Services (RHS).
  • Home must be located in a rural area as defined by RHS.
  • No down payment if the property appraises for the sale price or greater.
  • Minimum credit score of 620.
Two FHA Refinance Options
  • Credit qualifying Streamline Refinance and Rate/Term Refinance
    • Insured by the Federal Housing Administration
    • Cash back to borrower not to exceed $500
    • Upfront and monthly mortgage insurance
    • Minimum credit score of 620

Home Buyer Tax Credit

KHC’s Home Buyer Tax Credit is available through Mortgage Credit Certificates (MCC), which reduce the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan.  MCCs are NOT mortgages.  They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment.  That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay.  The federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan.  But an MCC gives you a tax credit of 25 percent (not to exceed $2,000).  You can still deduct the remaining 75 percent interest on your income taxes.  A tax credit is not the same as a tax deduction.  A tax deduction reduces the portion of your income that is taxed, so you pay less.  A tax credit is a direct, dollar for dollar reduction in the total tax you owe.  The MCC is effective for the life of the loan as long as you live in the home.  If you sell your home in the first nine years of ownership, you may be subject to Federal Recapture Tax.  One-time fee of $500 or reduced to $200 if through KHC’s GNMA Secondary Market First Mortgage Program.  Not valid with MRB loan programs.

Special First Mortgage Loan Programs

The Lottery for Special Funding is opened once a year.  The funds are allocated for persons meeting income and all MRB Guidelines.  These limited funds are available, usually in July, on a first-come, first-served basis.
Guidelines
  • Must be a first time home buyer, unless property is located in a targeted county.
  • Interest rate fixed at 3.00 percent based on minimum ratios 29/41 percent.
  • Eligible households:
    • Single parents (at least one dependent under the age of 18 must live in the home.)
    • Households with a person who has a permanent disability and who receives some form of disability income (SSI, SSDI, Veterans Disability etc.).
    • Households where at least one of the home buyers is age 62 or older.
  • Gross Annual Household Income guidelines:
    • $28,000 for a household of 1 or 2 people; or
    • $33,000 for a household of 3 or more people.
  • All household occupants (18 years and older) with income must be included on loan and be credit ready.
  • Must use all but two months’ reserves of borrower’s own funds.
  • Existing or new construction property with a purchase price limit of $115,000
  • Zero Point Rate
  • Only FHA, VA and RHS – 620 credit score and AUS Approval
  • 60 Day Lock
  • Kentucky Housing’s Regular and HOME DAP loan program may be used for down payment and closing cost assistance.
Applying for a Kentucky Housing loan is easy. Just contact one of our approved lenders near you and ask for a Kentucky Housing loan.
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Down Payment Closing Cost Assistance

KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your need.

Not Available – Hardest Hit Fund (HHF) DAP

  • Zero percent interest rate for first-time home buyers.
  • A non-repayable second mortgage for $10,000.
  • Forgiven after five years.
  • Home purchase must be located in Christian, Hardin, Jefferson, or Kenton counties.
  • New construction properties are not allowed.
    • ​Property has to have been previously occupied
  • Applicants must meet Secondary Market or MRB Income and Purchase Price Limits based on funding source.

Regular DAP

  • Purchase price up to $301,294 with Secondary Market or $271,164 with MRB.
  • Assistance in the form of a loan up to $6,000 in $100 increments.
  • Repayable over a ten-year term at 5.50 percent. A DAP of $6,000 over ten years at 5.50 percent interest would equal a payment of $65.12.
  • Available to all KHC first-mortgage loan recipients.

Affordable DAP

  • Purchase price up to $301,294 with Secondary Market or $271,164 with MRB.
  • Assistance up to $4,500.
  • Repayable over a ten-year term at 1.00 percent.
  • Borrowers must meet Affordable DAP income limits.

More about down payment and closing costs

  • No liquid asset review and no limit on borrower reserves.
  • Specific credit underwriting standards may apply to down payment programs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

http://www.nmlsconsumeraccess.org/
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/
 
— 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.

Fill out my form!

 

 

 

Source: http://www.mylouisvillekentuckymortgage.com/2012/08/khc-loan-programs.html

Who is eligible for Kentucky VA Home Mortgage loans?


via Who is eligible for Kentucky VA loans?

Kentucky Housing Corporation (KHC) has $3 million available in MRB, Special Funding, for active or non-active duty veterans at a 2 percent interest rate, fixed for 30 years.


military father and daughter 2(2).pngvia Kentucky Housing Corporation (KHC) has $3 million available in MRB, Special Funding, for active or non-active duty veterans at a 2 percent interest rate, fixed for 30 years.

Same day credit pull, 2 different scores


 

Source: Same day credit pull, 2 different scores

 

 

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 1, 2018, 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.

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