Qualifying For A Kentucky Mortgage After Bankruptcy
Home Buyers can qualify for a Kentucky mortgage after bankruptcy:
2 year waiting period to qualify for FHA Loan to qualify for a FHA Loans after discharge of Chapter 7.
One year into a Chapter 7 Bankruptcy to qualify for a Chapter Loan into a Chapter 13 Bankruptcy repayment plan.
No waiting period after a Chapter 13 Bankruptcy discharge date.
4 year waiting period to qualify for a Chapter 7 Bankruptcy discharge date to qualify for a Conventional Loan.
Two year waiting period to qualify for a Chapter 13 after Chatper 13 discharged date to qualify for a Conventional Loan.
Four year waiting period to qualify for a Conventional Loan if you had a mortgage part of bankruptcy but the foreclosure needs to be be finalized
Joel Lobb (NMLS#57916)
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
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#57916http://www.nmlsconsumeraccess.org/
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. Mortgage loans only offered in Kentucky.
FHA has announced new loan limits for 2017. For all FHA loans with Case Numbers assigned on or after January 1st, the following will be effective
The minimum national loan limit is being increased to$275,655. No county will have a maximum loan limit lower than this number.
Individual County loan limits can be located here. There were no counties where the loan limit decreased. There were a few where the limit did not change, but the vast majority of counties saw some increase.
FHA High Balance maximum loan limits have increased to coincide with the new FNMA maximum loan limits previously announced.
As of now, FHA high balance pricing will still apply to loans above the previous FNMA loan limit floor. That is, the High Balance FHA Loan Program policy will continue to apply to base loan amounts GREATER than:
* $417,000 for one-unit property
* $533,850 for two-unit property
* $645,300 for three-unit property
* $801,950 for four-unit property
However we will continue to monitor the market and make an announcement if/when these values are updated to coincide with the new FNMA loan limit floor values.
Administration (FHA) Single Family Housing Policy Handbook 4000.1. These updates are effective September 30, 2016 and
Clarification that an Upfront Mortgage Insurance Premium (UFMIP) refund calculation applies even if original UFMIP was
Mortgage Debt Not Included in Credit Report: Clarification that a manual downgrade is not required when there is no history of late payments, as detailed below.
o Not currently delinquent; and
o No 30 day late payments within 12 months of the case number assignment date; and
o No more than 2 x 30 day late payments within 24 months of the case number assignment date.
A link has been added in the FHA Product Description from Mortgage Payment History requirements to “Credit History
Requirements for Manually Underwritten Loans.”
Appliances that add contributory value must be operable. Mechanical components and utilities: The appraiser must report the utility, safety, and capacity of the mechanical systems. The appraiser must observe and operate all applicable mechanical systems and utilities. In conjunction with this guidance, existing FHA Handbook guidance on the following topics will be added: o Electrical System o Heating and Cooling o Plumbing o Utilities
If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.
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 views of my employer. Not all products or services mentioned on this site may fit all people
Kentucky FHA Program guidelines have been updated as follows:
For a Kentucky FHA Purchase Loan, we can go down to a 600 credit score with the minimum down payment of 3.5%. No bankruptcies or foreclosures in the last 2 years.
If you are getting cash out, then the max loan to value or equity position is limited to 85% of the homes value. For example, if you had a home that was valued at $100,000, then the max loan for a FHA Cash Out in Kentucky would be $85,000.00. You still have to may mortgage insurance for life of loan so think carefully about using FHA for a cashout refinance.
The maximum debt to income ratios will be set by the AUS when we run it, but for a refer, it will be limited to 31% and 43% respectively. For example, if you make $3000 a month gross income, the max house payment would be $930.00 piti, and the maximum monthly payments including the new house payment would be $1290.00. So in the above example, the most you could have left in monthly bills listed on the credit report would be $360.00–If you had child support this would count in the dti calculation on the backend ratio of 43%
The seller can pay up to 6% of the buyer’s closing costs and prepaids (property taxes, home insurance for 1st years escrows) of the sales price. So, if you purchased a home for $100,000.00, the seller could give you a concession at closing to pay your closing costs and prepaids. A lot of Kentucky First Time homebuyers use this to limit their cash to close.
The minimum down payment of 3.5% for Kentucky FHA Loans can come from a family member in the form of a gift, or can be borrowed from a 401k, retirement account, or secured asset like a car.
• Seller must own the property a minimum of 90 days prior to the contract date.
FHA loans do not require a termite or home inspection, but they do require a HUD appraisal by a FHA approved Appraiser.
The following changes are effective for all Kentucky FHA case numbers assigned on or after June 3, 2013: FHA is changing the duration for the collection of MIP
o For all mortgages with an original principal LTV of 90% or less, regardless of loan term, the annual MIP will be assessed for 11 years.
o For all mortgages with an original principal LTV greater than 90%, regardless of loan term, the annual MIP will be assessed for the entire life of the loan.
Loans of 15 year terms or less with LTV 78% or less will pay an MIP amount of 45 bps.
FHA Streamlines Prior to June 2009
FHA Streamlines with case numbers dated June 11, 2012 or later will have new MIP rules applied. If the loan being refinanced was endorsed on or before May 31, 2009, the new Streamline will receive a flat annual MIP of 55 basis points, regardless of loan amount, and the UFMIP ratio will decrease to 0.01% of the base loan amount.
Senior Loan Officer
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
I. ML 2013-25 (and 2013-24) – Collections, Judgments and Disputed Accounts
This guidance amends the TOTAL Scorecard User Guide (FHA’s guide for
using AUS) and is effective for all case numbers assigned on or after October
15, 2013. It applies to all FHA loans with the exception of non-credit
qualifying streamline refinance transactions.
A. FHA does not necessarily require collection accounts to be paid off for
approval, but it is recognized that collection efforts by the creditor could
affect the borrower’s ability to repay the mortgage. To that end, FHA is
requiring lenders to follow these guidelines when collection accounts are
present with an aggregate balance equal to or greater than $2000. When
the loan is rated approve/eligible or accept/accept by TOTAL:
1. If the cumulative outstanding balance of all collections is LESS than
$2000, then no further consideration is required.
2. If the cumulative outstanding balance of all collections of ALL
borrowers is equal to or greater than $2000 the lender must include
monthly payments in the borrower’s debt to income ratio for accounts
that will remain open after closing. This means that you will need to
document payment arrangements with the creditor and count the
payment or use 5% of the outstanding balance.
Note 1: Collections accounts of a non-purchasing spouse in a community
property state are included in the cumulative balance.
Note 2: Medical collections and charge offs are excluded from this
guidance.B. Judgments – Loans for borrowers with outstanding judgments are
generally not acceptable unless the following documentation is obtained.
a. Judgment must be on the credit report that is linked to the TOTAL
Scorecard findings and the findings must be “approve/eligible” or
b. If the judgment will not be paid off and released prior to the
closing, evidence of a payment agreement may be considered. The
payment agreement must be in writing and provided at the time of
underwriting. Crescent will require evidence that 12 months
satisfactory payments have been made as scheduled. Borrowers
may not pre-pay scheduled payments in order to meet this
requirement. The monthly payment must be considered in the
borrower’s debt-to-income ratio for qualifying.
c. Any judgments that are discovered in the processing of the loan
that ARE NOT on the credit report linked to the TOTAL findings
require the loan to be manually downgraded to “refer” status.
Crescent does not approve loans that must be manually
d. A subordination agreement will be required for any judgment that
is also a lien against the borrower and/or the subject property.
C. Disputed Accounts – Because disputed accounts are not generally
considered in the borrower’s credit report FHA will now require loans of
borrowers who have derogatory disputed accounts with cumulative
balances of $1000 or more (excluding medical) to be downgraded to
“refer” findings and manually underwritten. As you are aware, Crescent
does not approve loans that require manual underwriting.
NOTE 1: Disputed derogatory credit account of a non-purchasing spouse
in a community property state are not included in the cumulative balance
for purposes of determining if the mortgage application must be
downgraded to a “refer.”
NOTE 2: Disputed medical collections are excluded from the $1000 limit
as are derogatory credit accounts resulting from identity theft, credit theft
unauthorized use, etc. However, documentation must be provided to
conclusively support the disputed status. Documentation might entail
police reports, letters from the creditor, etc.
II. ML 2013-26 – Back to Work-Extenuating Circumstances
The guidance provided in ML 13-26 requires loans to be manually
underwritten. For this reason Crescent cannot approve loans that need these
credit underwriting leniencies. III. ML 2013-29 – Application of Unused Funds from Escrow Account on
This guidance is effective with case numbers assigned on or after November
A. Unused funds from an escrow account that are not sent directly to the
borrower must be used for a purpose authorized by the borrower.
B. If the current servicer nets the escrow balance out of the payoff, it does not
change the way the new loan amount is calculated. You must still start
with the unpaid principal balance on the current loan, NOT the payoff
C. When the borrower has determined that they want the unused funds to be
applied to costs associated with the new FHA loan the lender is required
a. Obtain a written authorization from the borrower to apply the funds
from an existing mortgage for any purpose prior to using them. The
borrower’s written authorization must clearly state the purpose for
which the authorization is provided.
b. The credit must show on the HUD-1 when the funds are applied to
settlement charges or to the new escrow account.
IV. Reminder: Loan officers are not to sign the initial 92900a (addendum to the loan application for sponsored originator cases. This includes lenders who
have their FHA approval, but have not completed the test case phase of the
A link to the FHA mortgagee letters is provided here > Mortgagee Letters.
Joel Lobb (NMLS#57916) Senior Loan Officer