BREAKING: HUD suspends FHA mortgage insurance premium cut

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That didn’t take long! BREAKING: HUD suspends FHA mortgage insurance premium cut

In first moments of Trump presidency, HUD makes it official: FHA mortgage insurance premium cut is suspended “indefinitely.”

The Department of Housing and Urban Development announced it suspended the reduction of Mortgage Insurance Premiums, effective immediately. HUD sent out an announcement just an hour after President Trump was sworn in on Friday, stating that the cuts have been suspended indefinitely. Click the headline for more.

Source: BREAKING: HUD suspends FHA mortgage insurance premium cut

Kentucky FHA Loan Requirements for 2017

Kentucky HUD $100 Down FHA Program for 2017

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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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  • 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.

What are the Kentucky FHA Credit Score Requirements for 2017 Mortgage Loan Approvals?

 

Getting a FHA loan in Kentucky in 2017 you will be confronted with minimum credit score requirements set forth by FHA and the lender. Even though FHA will insure the mortgage loan at a certain credit score, you will see that lenders will create  “credit-overlays” to protect their risk and ask for a higher credit score.

So keep in mind when you are getting a FHA loan in 2017, some lenders will have higher credit score minimums in addition to the FHA Mortgage Insurance program.

For a Kentucky Home buyer wanting to purchase a home or refinance their existing FHA loan, FHA requires a 3.5% down payment and the borrower must have a 580 FICO Credit Score. If the score is below 580, then you would need 10% down and still qualify on a manual underwrite.

You must have a FICO score of at least 500 to be eligible for an Kentucky  FHA loan. If your FICO score is from 500 to 579, your down payment on the loan is 10 percent of the loan.

If your FICO score is 580 or higher, your down payment is only 3.5 percent. If your credit score is less than 580, it may be more cost effective to take the necessary steps to improve your score before taking out the loan, rather than putting the money into a larger down payment.

How do they get the credit score:  There are three main credit bureaus in the US. Equifax, Experian, and Transunion. The three scores vary but should be relativley  close as long as the same creditors are reporting to the same bureaus.

You will get a variation in the scores due to all creditors or collection companies don’t report to all three bureaus. This is why they take the mid score.  So if you have a 590 experian, 680 equifax, and 620 transunion, your qualifying credit score would be 620

Based on my experience with lenders that I deal with in Kentucky on FHA loans,  most lenders require 620 middle credit score for consideration for loan approval.

How do they get the score:  They take the mid score, so if you have a 590 experian, 680 equifax, and 620 transunion, your qualifying score would be 620.

 

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Kentucky FHA Loans with less than 620 Score

If your score is below 620, a manual underwrite is where the AUS (Automated Underwriting System) refers your loan to an human being, and they look at the entire file to see if they can overturn and approve the mortgage loan because the Desktop Underwriting Automated Software could not approve you.

With scores below 620, they typically will want to verify your rent history, have no bankruptcies in last two years, and no foreclosures in the last 3 years.

If you have had any lates since the bankruptcy this will probably result in a denial on a refer manual underwrite file.

Your max house payment will be set at 31% of your gross monthly income,  and your new house payment plus the bills you are paying on the credit report cannot be more than 43%.

Typically, on scores below 620 for FHA loans, they will also look at reserves or money you have saved-up after the loan is made to try and qualify you. For example, if you have a 401k or savings account that have at least 4 months reserves (take your mortgage payment  x 4) and this would equal your reserves. They look at this as a rainy day fund and could help you keep up on your bills if you were unemployed or could not work.

Maximum FHA loan limits in Kentucky are set around $285,000 and below.

If you are looking to take a FHA loan in 2017 to buy or refinance a home in Kentucky, please contact me below with your questions about the credit score requirements and how they affect your loan approval.

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.

 

 

 

22 New Fannie Mae Homes in Kentucky

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$25,000Just Listed

3801 Herd Elias Rd
Tyner, KY 40486

3 Beds |2 Baths | 1634 sq. ft.

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3 Beds |1 Baths | 1288 sq. ft.

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$40,000Back on Market

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2 Beds |1 Baths | 624 sq. ft.

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3 Beds |1 Baths | 1056 sq. ft.

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$108,900Price Reduced

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3 Beds |2 Baths | 2097 sq. ft.

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Florence, KY 41042

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$64,900Price Reduced

517 Washington Ave
Paintsville, KY 41240

3 Beds |2 Baths | 2242 sq. ft.

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$135,500Price Reduced

136 W Main St
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5 Beds |2 Baths | 3641 sq. ft.

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$42,900Price Reduced

147 Williams Branch
Hazard, KY 41701

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$39,900Price Reduced

158 Baker Ave
Hazard, KY 41701

3 Beds |2 Baths | 2416 sq. ft.

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$19,000Price Reduced

1229 Hermes Ave
Covington, KY 41011

1 Beds |1 Baths

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$79,000Price Reduced

2116 Quillman Rd
Louisville, KY 40214

4 Beds |1 Baths | 1440 sq. ft.

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Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.

Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.

  • Ordered through a third party source. Interested/vested parties may not initiate the appraisal. I.E> buyers, sellers, realtors, loan officer, family members
  • Property must meet HUD’s minimum property standards. i.e.: permanent heat source, utilities must be on and in working order at time of inspection
  • Flips < 90 days – not allowed Per HUD -If current owner owned less than 90 days FHA will not insure. Sometimes a second appraisal will be required by FHA investor if sold within the last 6 months for a large profit. Receipts of work done may be needed to substantiate  increase in value of home in short-time period.
  • Transferred appraisal – ok
  • Appraisal valid 120 days – 30 day extension possible*
  • Property eligibility – No location restrictions.
  • New Construction Available

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Joel Lobb
Senior  Loan Officer
(NMLS#57916)
 
 Fax:     (502) 327-9119
 
 

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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.

 

Deferred Student Loans for FHA Loans for a Kentucky FHA Mortgage loan approval.

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FHA recently change the guidelines for getting a Kentucky mortgage loan approved with student loans. This works to your advantage versus the old guidelines.

Mortgagees must use the guidance in Mortgagee Letter (ML) 16-08 for case numbers assigned on or after June 30, 2016.

The Mortgagee must include the monthly payment shown on the credit report, loan agreement or payment statement to calculate the Borrower’s debts.

If the credit report does not include a monthly payment for the loan, the Mortgagee must use the amount of the monthly payment shown in the loan agreement or payment statement.

If the monthly payment shown on the credit report is utilized to calculate the monthly debts, no further documentation is required.

 

Mortgagees must use the guidance in Mortgagee Letter (ML) 16-08 for case numbers assigned on or after June 30, 2016.

The Mortgagee must include the monthly payment shown on the credit report, loan agreement or payment statement to calculate the Borrower’s debts.

If the credit report does not include a monthly payment for the loan, the Mortgagee must use the amount of the monthly payment shown in the loan agreement or payment statement.

If the monthly payment shown on the credit report is utilized to calculate the monthly debts, no further documentation is required.

If the credit report does not include a monthly payment for the loan, or the payment reported on the credit report is greater than the payment on the loan agreement or payment statement, the Mortgagee must obtain a copy of the loan agreement or payment statement documenting the amount of the monthly payment.

If a student loan is not deferred, the debt is considered an installment loan and FHA will count the actual monthly payment for the obligation.

This includes the actual monthly payment for the obligation that is being paid under an income-based repayment plan, which may include an actual monthly payment of $0.

FHA and HUD just came out with an updated Mortgagee Letter 16-08 in regards to Deferred Student Loans for FHA Loans for a Kentucky FHA Mortgage loan approval.
 
Previously had to count 2% of balance against DTI,  it is changed to 1% of balance against DTI.  See below from the Letter.  
 
Student Loans
(4) Calculation of Monthly Obligation
Regardless of the payment status, the Mortgagee must use either:
the greater of:
– 1 percent of the outstanding balance on the loan; or
– the monthly payment reported on the Borrower’s credit report;   or
the actual documented payment, provided the payment will fully amortize the loan over its term.

 
Joel Lobb
Senior  Loan Officer
(NMLS#57916)
 
 Fax:     (502) 327-9119
 
 

 

 

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