Kentucky FHA Loan Requirements for 2018

Benefits and Drawbacks for an FHA Borrower

Kentucky HUD $100 Down FHA Program for 2018

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Kentucky FHA Loan Requirements

The requirements for Kentucky FHA loans are set by HUD.

  • Borrowers must have a steady employment history of the last two years within the same industry or line of work. Recent college graduates can use their transcripts to supplant the 2 year work history rule as long as it makes sense.
  • Self-Employed will need a 2 year history of tax returns filed with IRS. They will take a 2 year average.
  • FHA requires a 3.5% down payment. Can be gifted from family member or from retirement savings plan, or money saved-up. Any type of cash deposits are not allowed for down payments. No exceptions to this rule!! This is one of the biggest issues I see in FHA underwriting nowadays.
  •  FHA loans are  for primary residence occupancy. Not rental houses.
  • Borrowers must have a property appraisal from a FHA-approved appraiser.
  • Borrowers’ front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance, homeowners insurance) needs to be less than 31 percent of their gross income, typically. You may be able to get approved with as high a percentage as 43 percent. If the Automated Underwriting System gives you an Approved Eligible you can go higher on the debt ratios
  • Borrowers must have a minimum credit score of 580 for maximum financing with a 3.5% down payment
  • Borrowers must have a minimum credit score of 500-579 for maximum LTV of 90 percent with a minimum down payment of 10 percent. Most lenders will not go below 620 score, and very few lenders will go to 580 score. It’s best to work on getting your scores up before you apply or work with a loan officer to improve them.
  • 2 years removed from Chapter 7 is required with good pay history after bankruptcy
  • 1 year removed from Chapter 13 is okay with an excellent pay history with the Chapter 13 plan and permission from trustee. You will need to qualify with the Chapter 13 payment along with new house payment. Again, scores will play into your loan pre-approval.
  • Typically borrowers must be three years out of foreclosure and have re-established good credit. Exceptions can be made if there were extenuating circumstances and you’ve improved your credit. If you were unable to sell your home because you had to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.
  • Max FHA loan in Kentucky is between $275,000 to $299,000 depending on the county in Kentucky
    I can answer your questions and usually get you pre-approved the same day.

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  • Gift Rules for Down-Payment Sources Guidelines on FHA Mortgage Programs

    One of the biggest obstacles to buying a home for Americans is the down payment. There was a time when you needed a 20% down payment and a high credit score to buy a home. But in 2018, you can buy a home with average to below average credit and a low down payment in some cases. One of the most popular loan programs for these buyers if the FHA loan. A major advantage of the FHA mortgage loan is you can get approved with only a 3.5% down payment with a 580 or higher credit score. If you have a lower score than that, you need a 10% down payment.

    Still, there are situations where the borrower is having trouble coming up with the down payment for the loan. What to do then? FHA guidelines do allow other options. Keep reading to learn more.

    More on FHA Down Payments and Approved Sources

    As we note above, you are required to have at least a 3.5% down payment to be approved for an FHA loan. The money must be verified by the FHA-approved lender to come from an ‘approved source.’ What is an approved source, anyway? Most people get their down payment from cash reserves, investments, borrow from 401k or IRA, etc. The idea behind verifying where the money came from is to make sure the borrower did not get the down payment from a credit card or payday loan, etc.

    But there are other options for your down payment. The funds also can come from a gift. The gift and the giver do need to meet FHA requirements, but this flexible guideline makes it possible to get into an FHA loan with, technically, zero money down. To determine if the down payment gift can be used or not, it is necessary to check HUD rules. According to HUD 41.55.1 Chapter 5 Section B, for the funds to be a gift, there cannot be any expected repayment of the money.

    Also, FHA will scrutinize the giver of the gift. Chapter 5 of the HUD Code states the cash gift is ok if it comes from your relative; employer or labor union; close friend with a defined interest in you; charitable organization; government agency or public entity.

    FHA also states who cannot give gift funds to you for the down payment. These are the seller; the real estate agent or broker on the deal; the builder or an associated entity.

    Gift Terms Explained

    The gift for your down payment cannot be made based upon paying it back later. You are required to get a gift letter from the person or organization. The letter should state that you are not required to pay the money back. It also should provide the contact information for the borrower, such as name, address, and phone number. Also included should be the bank account from which the funds will be sent.

    The gift donor should be OK with giving a bank statement with the letter. Also, he or she should ensure that the transfer amount matches what is in the gift letter and what is deposited into your account.

    FHA rules are very specific on these areas to ensure that the home buying process through FHA is fair and just. But as long as you follow the FHA rules, you should be able to get help with your down payment from a friend or relative.

    Don’t Have Friends or Family Who Can Help?

    Not every borrower has friends or family who can give them a gift for their down payment. But HUD lists many government programs spread throughout the country in most states that can offer down payment and closing cost help for certain borrowers.

    It also is worth checking if your employer and state have employer assisted housing. This program can help people with moderate incomes to get a loan to cover closing costs and down payment. Look up EAH in your state on Google to see what is available.

    Experts say that down payment help is available for nearly 90% of homes in the US. There is a good chance that you can get help on your down payment through one of these organizations. References: https://www.fha.com/fha_article?id=441

  • Benefits and Drawbacks for an FHA Borrower
  • Call or Text me at 502-905-3708 with your mortgage questions.
    Email Kentuckyloan@gmail.com



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    Joel Lobb
    Senior  Loan Officer

    (NMLS#57916)
    text or call my phone: (502) 905-3708
    email me at kentuckyloan@gmail.com
    The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.
    All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.
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Kentucky $15,000 Down payment Assistance Grant For Kentucky Home Buyers in 2016

 

 

New Income Limits for Jefferson County Kentucky and Louisville Home Buyers lacking a down payment.

The new income limits for Kentucky Housing loans are based on annual borrower income, and vary by county. Here’s how they break down for Central Kentucky and the Louisville area:

  • Purchase price up to $294,000 with Secondary Market and max household income is limited to $112,000 with MRB for Jefferson County Kentucky. No homeownership in last 3 years and a minimum credit score of 640. Max debt to income ratios of 40 an 45%

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Joel Lobb
Senior  Loan Officer
(NMLS#57916)
 

phone: (502) 905-370
 

Bank Statement Basics for A Kentucky Mortgage Loan Approval for USDA, KHC, FHA, VA, Fannie Mae and Rural Housing Mortgage Loans

 

Give us a try or let us compare your options on your next mortgage transaction. Call me locally at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications.

Email me at kentuckyloan@gmail.com with your questions

I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky.  For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance.

This website is not an government agency, and does
not officially represent the HUD, VA, USDA or FHA or any other government agency.

NMLS# 57916 http://www.nmlsconsumeraccess.org/

Joel Lobb Senior  Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
 Fax:     (502) 327-9119
Company ID #1364 | MB73346E
EQUAL HOUSING LENDER

 

KENTUCKY FHA MORTGAGE – ACCEPTABLE DOCUMENTATION FOR DOWN PAYMENT FUNDS

KENTUCKY FHA MORTGAGE  – ACCEPTABLE DOCUMENTATION FOR DOWN PAYMENT FUNDS

PROVIDED BY FEDERAL, STATE OR LOCAL GOVERNMENTS
 
FHA recently released Mortgagee Letter 2013-14, requiring documentation that mortgagees must provide to demonstrate eligibility for FHA mortgage insurance of loans when a Federal, State, or local government, its agency or instrumentality, directly provides the borrower‘s required Minimum Cash Investment through secondary financing.
Acceptable forms of documentation include the following:
  • A cancelled check, evidence of wire transfer or other draw request showing that prior to or at the time of closing the Government Entity had authorized a draw of the funds on its account provided towards the borrower’s required Minimum Cash Investment from the Government Entity’s account; or
  • A letter from the Government Entity, signed by an authorized official, establishing that the funds provided towards the borrower’s required Minimum Cash Investment were funds legally belonging to the Government Entity at or before closing
Where a letter from the Government Entity is submitted, the precise language of the letter may vary because of differences in the funding and legal authority of each Government Entity. Examples of acceptable language, which would establish the funds were legally belonging to the Government Entity, would include the following:
  • A statement that the Government Entity has, at or before closing, incurred alegally enforceable liability as a result of its agreement to provide the funds towards the borrower’s required Minimum Cash Investment;
  • A statement that the Government Entity has, at or before closing, incurred alegally enforceable obligation to provide the funds towards the borrower’s required Minimum Cash Investment; or
  • A statement that the Government Entity has, at or before closing, authorized a draw on its account to provide the funds towards the borrower’s required Minimum Cash Investment.
        The mortgagee is not required to document the actual transfer of funds in satisfaction of the obligation or liability, which resulted from the funding of the borrower’s required Minimum Cash Investment by the Government Entity, before closing, provided the mortgagee has obtained documentation that a legally enforceable liability or obligation was incurred at or before closing. Where such documentation is provided establishing that a legally enforceable liability or obligation was incurred at or before closing, the funds provided at closing for down payment assistance will be considered by HUD to be funds legally belonging to the Government Entity. However, failure of the Government Entity to satisfy the obligation or liability may result in a determination that the funds were provided by a prohibited source.
         Note, it is still required that you provide a Gift Letter for the borrower’s Cash to close, including the required Minimum Cash Investment, as described in HUD Handbook 4155.1 5.B.5. – a Gift Letter Requirement

Down Payment Assistance Programs in Kentucky

Down Payment Assistance Programs in Kentucky

Kentucky First Time Homebuyer Down Payment Assistance for Kentucky First Time Home Buyers for $4500 to $6000 from Kentucky Housing DAP Funds

Kentucky Housing Corp. will raise the gross annual income to $40,000 and the Purchase Price to $130,000! That is a 2% fixed Rate for 30 yrs for Kentucky Home Buyers using the KHC Program.

Regular DAP

  • Purchase price up to $283,900 with Secondary Market or $255,500 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 $283,900 with Secondary Market or $255,500 with MRB.
  • Assistance up to $4,500.
  • Repayable over a ten-year term at 1.00 percent.
  • Borrowers must meet Affordable DAP household income limits

MRB Special Funding Program 


KHC has $5 million available at 2 percent interest rate, fixed for 30 years. This special funding program is available on a first-come, first-served basis starting today, Wednesday, March 8, 2017, with new reservations. This program is targeted to:
  • Households whose gross annual income does not exceed $40,000.
  • An existing or new construction property (purchase price limit $130,000) in a county not receiving HHF DAP funds*.
  • 640 minimum credit score.
  • FHA, VA, or RHS first mortgage options.
  • Households who meet one of the following criteria:
    • At least one of the home buyers is age 62 or older.
    • At least one member of the household is disabled and receiving disability income.
    • A single-or two parent household with at least one dependent child under the age of 18 living in the household.


http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 
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.
 
 
 2 percent interest rate, fixed for 30 years

 

 

 

 

 

 

By Timothy Bodamer , eHow Contributor

  1. in Kentucky with down payment assistance programs.
    • In the Bluegrass State of Kentucky, there are a variety of programs to financially assist potential homeowners. These programs are based on a variety of criteria, including income and demographics. Kentucky residents can use these programs to fulfill the American dream for their family.

    American Dream Downpayment Initiative

    • The American Dream Downpayment Initiative is provided in Kentucky to help potential homeowners with down payments and closing costs. The ADDI is provided to first-time homeowners who make less than 80 percent of the median income of the area in Kentucky. Up to $10,000 or 6 percent of the purchase price (whichever is greater), can be used for down payments, closing costs and rehabilitation efforts to fix up the purchased home. Repairs must be completed within one year of the home purchase.

      U.S. Department of Housing and Urban Development
      451 7th Street S.W.
      Washington, DC 20410
      202-708-1112
      hud.gov

    REACH Kentucky

    • REACH Kentucky is a down payment program used for new or existing homes. The REACH program offers loans that serve as a second mortgage repayable at zero to 2 percent. The home buyer must be the primary resident. Clients must meet low to moderate income standards. This income varies from county to county. To qualify, the first-time homeowners must complete a home buyer education course and provide $500 of their own money.

      REACH Inc.
      733 Red Mile Rd.
      Lexington, KY 40504
      859-455-8057
      reachky.com

    The Kentucky Housing Corporation

    • The Kentucky Housing Corporation was founded in 1972 as part of the Commonwealth of Kentucky‘s Finance and Administration Cabinet. Kentucky Housing provides down payment and closing cost assistance to Kentucky residents. The regular down payment assistance plan is available to all potential homeowners who reside in Kentucky. The program provides up to $2,500 in $100 increments. This loan is repayable over five years at 6 percent interest. Other down payment options are available for low-income residents. Down payment assistance is available up to $10,000 and is forgiven after the home buyer stays in the home for five years. This assistance is provided based on income guidelines. These guidelines are based on a county-by-county basis.

      The Kentucky Housing Corporation
      1231 Louisville Rd.
      Frankfort, Kentucky 40601
      502-564-7630 ext. 291
      kyhousing.org

Read more: Down Payment Assistance Programs in Kentucky | eHow.com http://www.ehow.com/list_6518335_down-payment-assistance-programs-kentucky.html#ixzz1O1jSel5B

Down-payment Assistance Programs Louisville and Kentucky

Down-payment Assistance Programs Louisville and Kentucky.