FHA STREAMLINES REFINANCE GUIDELINES IN KENTUCKY 2015.
7 Major FHA Rule Changes – Effective June 15, 2015
As you probably know, HUD has scrapped their old underwriting handbook and has re-written the whole darn thing which they will be implementing on all case numbers order on or after June 15. What they DIDN’T do was indicate which rules were CHANGED significantly from the previous handbook. We compared both the old and the new handbook and found 46 rule changes. Here are seven of them.
Old Rule – Document source of earnest money if the amount exceeds 2% of the sales price
New Rule – Document source of earnest money if the amount exceeds 1% of the salesprice
Old Rule – Federal debt makes borrower ineligible
New Rule – VERIFIED federal debt makes the borrower ineligible
Old Rule – Underwriter discretion allowed when received less than 2 years
New Rule – Two years uninterrupted part-time income is required. Average income over prior 2 years or use 12-month average of hours at the current pay rate if the lender documents an increase in pay rate.
Rental Income on Retained Primary Residence
Old Rule – Rental income may be counted when relocating outside of reasonable commute distance for job and borrower has 25% equity.
New Rule – Rental income may be counted when relocating and the new residence is at least 100 miles from previous residence. If no history of rental income since the last tax filing, borrower must have 25% equity.
Old Rule – Gross up using tax rate evidenced on last tax return. If borrower did not filea return, use tax rate of 25%.
New Rule – Gross up using the greater of 15% or actual tax rate. If borrower did not file a tax return, use tax rate of 15%
Installment Debts Less Than 10 Months
Old Rule – May be excluded from ratios. If manual underwrite—may be excluded if debt will not affect ability to pay the mortgage.
New Rule – May be excluded ONLY if—they have cumulative payment of less than or equal to 5% of the borrower’s gross monthly income AND the borrower may not pay the debts down to achieve this percentage.
Multiple FHA Loans
Old Rule – If relocating for employment, borrower may obtain a second FHA loan for a new principal residence if current residence is more than a reasonable commute to new residence.
New Rule – If relocating for employment, the commuting distance between the old residence and new residence must be more than 100 miles.
Source: Mortgage Currentcy
Joel Lobb (NMLS#57916)
Senior Loan Officer
via FHA STREAMLINES
EFINANCE GUIDELINES IN KENTUCKY 2015.
Louisville Kentucky Mortgage Programs
As an approved Louisville Kentucky Fannie Mae (FNMA) and Louisville Ky FHA mortgage professional, I offer a wide array of Kentucky loan programs, including Kentucky First Time Home Buyers Programs, Kentucky Refinance Programs, or Louisville Kentucky Renovation Home Programs.
Kentucky Home Purchase Programs
Whether you’re a first-time home-buyer, upgrading to a new home, or buying an additional property, we offer a wide array of mortgage loan programs – many requiring a limited down payment (0 to 3%) for qualified individuals, both repeat and first time buyers.
Mortgage Program Highlights:
- Fixed and adjustable rate options
- $0 down payment options available
- Up to 6% seller concessions
- Down payment assistance and gifts permitted
- Credit scores as low as 580 on FHA, VA, USDA Mortgage Programs.
- Debt to income ratios to 55.00% with automated approval
We specialize in the following Kentucky Home Mortgage Programs:
Conforming Agency (Conventional): Loans that conform to Fannie Mae and Freddie Mac guidelines, including maximum loan amount, borrower credit and income levels, down payment, and eligible properties.
Kentucky FHA: Loans insured by the Federal Housing Administration, a federal assistance program that promotes home ownership by offering low down payment options, lower interest rates and easier qualifications.
Kentucky VA: Loans guaranteed by the Department of Veterans Affairs for military service members with benefits like no down payment (100% financing) and competitive (and usually lower) interest rates.
Kentucky USDA: (United States Department of Agriculture) Government-insured rural development loans for the purchase of homes in rural areas with no down payment (100% financing), no monthly mortgage insurance and low interest rates.
Kentucky Housing Corporation: KHC housing program for qualified first-time home buyers offering down payment and closing costs assistance up to $6,000 in down payment assistance in form of a second mortgage over 10 years. It has different rates depending on the income of household but 1% for 10 years for lower income and 5.5% for 10 years for higher incomes.
Apply for a home loan by clicking the link below: It’s free and takes less than 5 minutes Or call us at 502-905-3708 for your free application over the phone
FHA Loans in Kentucky – Gifts to Pay off Debt
Do you know that a gift can be used to pay off Borrower’s debts to qualify on an Kentucky FHA Loan?
A regular gift (this does not include a gift of equity) may be used to pay off a Borrower’s debt(s) for qualifying purposes as long as both the gift funds and the debt(s) being paid off with the gift funds are accurately disclosed and assessed by AUS TOTAL Scorecard. Whenever a gift is received on an Kentucky FHA loan, regardless of what it is being used for, it carries certain risks that must be assessed by TOTAL Scorecard for qualifying purposes.
When a gift is received to pay off debt(s), follow the steps below to ensure that TOTAL Scorecard accurately assesses the risk of using gift funds in paying off debt for qualifying:
- Verify that evidence of the debt(s) having a zero balance has been obtained,
- Enter the gift funds received separate from any account balances and check “will be paid off” for debts in loan origination system (not “paid off”), and
- Submit the loan to TOTAL Scorecard
Joel Lobb (NMLS#57916)
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
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.
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