Did You Know that Kentucky Mortgage FHA Income Requirements changed in October 2015?
• Job Changes –
FHA loan rules instruct lenders to, favorably consider a borrower for a mortgage if he/she changes jobs frequently within the same line of work, but continues to advance in income or benefits. In this instance, income stability takes precedence over job stability.
And FHA loan applicants who have been out of a job for a while but have since returned to employment may have their income considered effective and stable when recently returning to work after an extended absence if he/she:
Note: An acceptable employment situation includes an individual who took several years off from employment to raise children, then returned to the workforce.
• Employment Gaps –
For borrowers with gaps – FHA does not require a minimum length of time that a borrower must have held a position of employment. However, the lender must verify the borrowers employment for the most recent two full years, and the borrower must:
When analyzing the probability of continued employment, the lender must examine –the borrowers past employment record
phone: (502) 905-3708
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
phone: (502) 905-3708
Fax: (502) 327-9119
Company ID #1364 | MB73346
FHA Back to Work Extenuating Circumstances Works, FHA Back to Work Program, Success Story, FHA Loans
Louisville Kentucky FHA Seller contributions can make a big impact for a first time home buyer struggling to save the required 3.5% down payment let alone all other related fees. A seller who understands the benefit and has the ability to offer assistance could make the difference between purchasing a home now and continuing to rent.
Louisville Kentucky FHA Maximum Seller Contributions
Louisville Ky FHA guidelines allow the seller to contribute up to 6% of the sales price toward the buyers closing costs, discount points, and prepaids. The seller is also allowed to pay the upfront mortgage insurance premium (MIP) which is typically rolled into the cost of the loan.
Common FHA Closing Costs:
Below is a list of customary fees associated with an Kentucky FHA loan. This is only an example of costs the seller may pay on your behalf and does not include all allowable costs per Kentucky FHA guidelines. Make certain your lender provides you with an itemized list known as a Good Faith Estimate.
- Origination fee – The maximum origination fee is 1 percent of your loan amount, or 2 percent of the loan amount if it’s a home equity conversion loan.
- Appraisal fee to determine the value of the home
- Costs associated with your mortgage credit report
- Attorney’s fees, title search fees, title insurance – Attorney’s fees are not typical in Colorado, but title fees are and can range from $250 to $1,500 depending on the home’s location.
- Prepaid interest – You will pay interest accrued between the closing date and the end of the month.
- Upfront premium for your Kentucky FHA mortgage insurance. This will be 1.5 percent of the loan amount, but you may be able to roll it into your loan.
- Escrow amounts for future taxes and insurance – You will be required to pay 1 year of homeowner’s insurance and a few months of your property taxes.
- Discount points (if applicable)
- Up Front Mortgage Insurance Premium (MIP)
- Buy Downs (cost incurred for a permanent or temporary interest rate buy down)While the total amount of your closing costs might seem like a hefty price to pay, keep in mind what you’re getting in return:A home you can call your very own.
via KHC Loan Programs.
- Debt to Income Ratios for A Kentucky Mortgage Loan for a FHA, VA, KHC, USDA and Rural Housing loans (trulia.com)
- Louisville Kentucky Mortgage Rates (louisvillekentuckymortgagerates.com)
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- The difference between a front-end and a back-end debt-to-income ratio for a Kentucky Mortgage Loan FHA, VA, KHC, USDA, Fannie Mae (louisvillekentuckymortgagerates.com)
- Kentucky First Time Home Buyer Down Payment Assistance thru Kentucky Housing (trulia.com)
- Louisville Kentucky Mortgage programs including FHA, VA, KHC, USDA, and Fannie Mae Home Loans in the State of Kentucky – Louisville Kentucky Mortgage (kentuckyfirsttimehomebuyer.com)