Kentucky Rural Housing and USDA Credit Score Requirements


        

 

Kentucky Rural Housing and USDA Credit Score Requirements

 

Kentucky USDA Rural Development Mortgage Overview

 

Features Benefits
Down Payment is not required Borrowers without savings, or who wish to retain their savings qualify
100% financing More Americans become homeowners
No reserves are required Buyers do not need to provide bank statements
Expanded qualifying ratios Buyers with satisfactory credit may qualify with higher Debt-to-Income ratios to accommodate high cost housing areas, etc
Seller is allowed to pay Buyer’sClosing Cost (ask KentuckyUSDA Specialist for details) Reduces out of pocket costs for Buyers
Low minimum credit score (640 minimum credit score required) Buyers with non-traditional or no credit histories may qualify
Streamlined processing with 640 credit score No explanations on credit with 640+ score
Very low monthly PMI No monthly mortgage insurance means a lower monthly payment for the Buyers and additional cash each month
Generous income limits based on 115% US median (not HUD) Deductions are available for dependents, daycare, elderly households, etc. to assist more individuals and families in qualifying
No maximum purchase price limit Buyers choose the home that meets their needs and repayment ability
NOT just for first time buyers All homebuyers are eligible for benefits
Modular Homes may be eligible Purchases only (Manufactured Homes are NOT Eligible)
Education/training substitute for job tenure Income history for ratios is waived.
USDA is the lowest payment loan option for buyers wanting aFIXED Rate No MI, very low 30 YEAR FIXED rates and very easy to qualify

Kentucky Guaranteed Rural Housing Loans

To be eligible, applicants must:
  • Have an adequate and dependable income;
  • Be a U.S. Citizen, qualified alien, or be legally admitted to the United States for permanent residence;
  • Have an adjusted annual household income that does not exceed the moderate income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. Applicants may be eligible to make certain adjustments to gross income – such as annual child care expenses and $480 for each minor child – in order to qualify.USDA Rural Development field offices can provide information on the moderate income limits for the areas that fall within their jurisdiction, and can provide further guidance on calculating household income.
  • Have a credit history that indicates a reasonable willingness to meet obligations as they become due;
  • Have repayment ability based on the following ratios: Principle, Interest, Taxes, and Insurance (PITI) divided by gross monthly income must be equal to or less than 29 percent. Total debt divided by gross monthly income must be equal to, or less than, 41 percent.
A Kentucky USDA Guaranteed Loan is a Government Insured 100% Purchase Loan. These loans are only offered in rural areas.
  • USDA Loans require no down payment.
  • There are no prepayment penalties for USDA Rural Home Loans.
  • A USDA Rural Development Loan has low monthly mortgage insurance.
  • A USDA Rural Development Mortgage is available all rural areas of the country, provided a market exists for the property and the home meets HUD’s minimum property standards.
  • A USDA Rural Housing Loan can be used to purchase a new or existing one family home in rural areas.
  • USDA RD Loans are offered at terms of 30 years with a fixed interest ra

 

Credit Requirements

 

Credit

Score

 

        The minimum credit score for all borrowers may not be lower than

 

620

   regardless of GUS approval. 

The lowest qualifying score of all applicants is used to qualify and each borrower must have at least two credit

scores. The qualifying score is the lower of 2 or the middle of 3 scores and must be reviewed for each

borrower.

 

Borrowers without a credit score are not eligible. 

 

Credit Report Requirements

 

 

A tri-merged credit report to be ordered. is required on all loans. The credit

history must indicate a reasonable ability and willingness to meet credit obligations.

Credit History

The borrower’s credit history must indicate a reasonable ability and willingness to meet obligations as they

become due. The following must be reviewed carefully:

Valid Credit Score

For a credit score to be considered valid, the score must be generated from a minimum of (3) trade lines that

have each been evaluated for at least 12 months. At least one of the three trade lines requires recent activity in

the last 12 months. Non-traditional credit is not eligible for qualifying.

Mortgage/Rental Payment History

A mortgage/rental payment history of 0x30 for the past 12 months is required. Any delinquencies in the last 24

 

Bankruptcies

Bankruptcies discharged less than 36 months are not eligible regardless of GUS findings.

Foreclosure

Foreclosures that occurred in the last 36 months are not eligible regardless of GUS findings

Adverse Credit

 

Delinquent federal debt or adverse credit on a previous Rural Housing loan must be reviewed and approved by

the local RD office and may be required to be paid in full or result in loan declination.

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7 thoughts on “Kentucky Rural Housing and USDA Credit Score Requirements

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