KHC Loan Programs


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KHC Loan Programs.

KHC offers two different funding sources: Secondary Market and MRB.

SECONDARY MARKET FUNDING SOURCE

  • First-time and repeat homebuyers statewide
  • 30-year fixed interest rate
  • Principle residence ONLY
  • Purchase Price Limit: $243,000
  • Borrower must meet KHC’s Secondary Market Income Limits

Conventional No Mortgage Insurance Program

  • Minimum credit score of 660
  • 3 percent down payment and no up-front or monthly mortgage insurance
  • All KHC DAPs applicable
  • No minimum borrower contribution
  • No reserves required

FHA

  • Insured by the Federal Housing Administration
  • 3.5 percent down payment
  • All KHC DAPs applicable
  • Upfront and monthly mortgage insurance
  • Minimum credit score of 620

Two FHA Refinance Options (Available Only Through Secondary Market)

  • Credit qualifying Streamline Refinance and Rate/Term Refinance
    • Insured by the Federal Housing Administration
    • Cash back to borrower not to exceed $500
    • Upfront and monthly mortgage insurance
    • Minimum credit score of 620

VA

  • Guaranteed by the Veterans Administration for qualified military veterans
  • No down payment if the property appraises for the sale price or greater
  • All KHC DAPs applicable
  • Minimum credit score of 580
  • No monthly mortgage insurance payments

RHS

  • Guaranteed by Rural Housing Services (RHS)
  • Home must be located in a rural area as defined by RHS
  • No down payment if the property appraises for the sale price or greater
  • All KHC DAPs applicable
  • Upfront and monthly mortgage insurance
  • Minimum credit score of 640

Home Buyer Tax Credit

KHC’s Home Buyer Tax Credit is available through Mortgage Credit Certificates (MCC), which reduce the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan. MCCs are NOT mortgages. They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment. That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay. The federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan. But an MCC gives you a tax credit of 25 percent (not to exceed $2,000). You can still deduct the remaining 75 percent interest on your income taxes. A tax credit is not the same as a tax deduction. A tax deduction reduces the portion of your income that is taxed, so you pay less. A tax credit is a direct, dollar for dollar reduction in the total tax you owe. The MCC is effective for the life of the loan as long as you live in the home. If you sell your home in the first nine years of ownership, you may be subject to Federal Recapture Tax. One-time fee of $500 or reduced to $200 if through KHC’s Secondary Market First Mortgage Program. Not valid with MRB loan programs.

Applying for a Kentucky Housing Corporation loan is easy. Just contact one of our approved lenders near you and ask for a Kentucky Housing Corporation loan.

 

MRB FUNDING SOURCE

  • 30-year fixed interest rate
  • Principle residence ONLY
  • Purchase price limit: $243,000
  • Borrower must meet MRB income guidelines
  • Some MRB KHC loans are subject to a federal recapture tax. However, KHC has implemented a Recapture Tax Guarantee Program for all loans that close after October 1, 2006. The Recapture Tax Guarantee Program will reimburse homeowners if they are subject to pay the Federal Recapture Tax on their KHC mortgage loan upon the sale of their home.

Here are several loan options for borrowers who don’t have a large down payment.

FHA loan. FHA loans typically require a 3.5 percent down payment, but that can go up to 10 percent if you have a poor FICO Score (500-579). You’ll have to pay upfront and annual mortgage insurance, regardless of how much you put down. The U.S. Department of Housing and Urban Development (HUD) has a searchable database where you can find FHA-approved lenders in your area.

 

VA loan. If you’re eligible for a VA loan, you’re in luck. VA loans don’t require any down payment from the borrower, they don’t charge mortgage insurance AND they have no minimum credit score requirement. But (there’s always a but!) VA loan holders will have to pay a funding fee, which can range from 1.25 to 2.4 percent of your loan amount.

HomeReady. Fannie Mae’s HomeReady mortgage program requires a minimum 3 percent down payment and comes with mortgage insurance. But you can get rid of the mortgage insurance obligation once your loan-to-value ratio falls below 78 percent. You don’t need stellar credit either — they accept borrowers with a FICO Score of 620 or greater. Because they’re backed by Fannie Mae, HomeReady loans also allow borrowers to use other sources of funding for their down payment, like a gift from family or friends.

USDA loan. If you’re set on living in a rural area, you may be eligible for a USDA mortgage loan. Generally, they classify any area with fewer than 10,000 to 20,000 residents as rural, but to be safe check out their property eligibility map. No down payment is required, and there’s no ongoing mortgage insurance fee, but you do have to pay a 2 percent upfront fee. Typical credit score requirements are 620 to 640 minimum. Borrowers also can’t have prior foreclosures, bankruptcies or major delinquencies in the past several years.

 

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4 thoughts on “KHC Loan Programs

  1. Pingback: KHC Loan Programs | Kentucky First Time Home Buyer Programs

  2. Pingback: 100% financing Kentucky Home Loan – Louisville Kentucky Mortgage Loans

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