Category: repossession car FHA loan approval

Kentucky FHA loans


Qualifying for an FHA Loan in Kentucky

Kentucky FHA Loan Requirements for 2024

Originally posted on Kentucky FHA Mortgage Lender:
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…


Kentucky FHA Loan Requirements for 2024 to include Credit Fico Scores, Down Payment, Income and Job history

FHA

An FHA loan is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment.

  • Minimum Credit Score is 500 with at least 10% down
  • Minimum Credit Score is 580 if you put less than 10% down

  • FHA Guidelines

    FHA Mortgage Guidelines

  • Upfront and Monthly Mortgage Insurance is required regardless of the Loan to Value
  • FHA Loans are only available for financing primary residences
  • Maximum Debt to Income Ratio of 50% (unless mitigating factors justify allowing a higher DTI)

Kentucky FHA Loan Requirements

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 is 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 580 to 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.



FHA 

Low Down Payment which can be 100% gift from family member or Grant Program
Seller can pay closing costs-Maximum 6% of purchase price
There is maximum mortgage amount for each county. Check FHA loan limit for your county.
Non-occupant co-signers are allowed on this program.
FHA Approved Condos-Single family home-2-4 unit properties, and PUDs are eligible.
Fast automated underwriting approval available. Also, the file can be manually underwritten by a live person to get loan approval if you do not receive approval through automated underwriting system.

FHA Foreclosure Program 

Must be HUD Owned property or FHA Foreclosure in HUD Participating Communities
$100 Down Payment than standard FHA program
580 minimum credit score
Single family, 1-4 unit properties, HUD approved condominiums, and PUDS eligible

https://youtu.be/-kZbDJVgwY8

2. Kentucky Housing Corporation Down Payment Assistance for 2024.

Kentucky Down payment assistance loans are available up to $10,000 for Mortgage

Down payment Assistance for Kentucky Homebuyers $10,000 Through KHC

KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. We offer a special loan program to help with those. Your KHC-approved lender can help you apply.

Eligibility: Both first-time and repeat home buyers purchasing a single-family dwelling. Purchase price can be no more than $481,176. Applicant’s income must be within applicable secondary market limits in effect. If KHC’s Homebuyer Tax Credit is used, then household income must be under the Homebuyer Tax Credit income limits.

Mortgage Revenue Bond (MRB) First Mortgage Products
Eligibility: Must be a first-time home buyer, unless purchasing a single-family dwelling in a targeted county. Purchase price can be no more than $481,176. Gross annual household income must be within applicable limits in effect. All non-borrowing occupants age 18 or older must disclose income and complete Non- Borrowing Occupant Form.
KHC ELIGIBILITY AND CREDIT STANDARDS OVERVIEW (Not intended to be an all-inclusive list.)
Home Buyer Eligibility
•
KHC can help both first time and repeat home buyers statewide.
•
Must be a U.S. citizen or legal status to be in U.S.
•
Applicant’s income ONLY through Secondary Market.
•
Property must be the borrower’s principal residence.
•
Borrower cannot own any other residential property at time closing for all loans with MRB Funding.
•
Any Borrower that meets both the income and purchase price limit can have access to Down Payment Assistance.
Kentucky Housing Credit Standards
•
620 minimum credit score required for FHA, VA, & RHS.
•
660 minimum credit score required for Conventional.
•
Debt ratios: 40/50%
•
Collections in most cases do not need to be paid-off in full.
•
Bankruptcies and foreclosures must be discharged two to seven years.
•
Non-taxable income can be grossed-up.
Property Eligibility
•
Both new and existing property.
•
Both new & existing Manufactured Housing.
•
With RHS only new construction Manufactured housing is allowed.
•
Purchase price limit of $481,176 for Secondary Market, MRB Loans, and Tax Credit.
•
Full appraisal required on all KHC loans.
•
With Existing Property, VA is the only loan product that requires a termite inspection.
•
A termite soil treatment certificate is required on ALL new construction
Regular Down Payment Assistance Programs (DAP) Only home buyers obtaining a Kentucky Housing Corporation first mortgage are eligible for DAP funds.
Interest Rate with DAP applicable.
Eligible KHC Mortgages FHA, RHS, VA, HFA Preferred, & HFA Preferred Plus 80 Income Eligibility
Secondary Market or Mortgage Revenue Bond Property Eligibility New and Existing Properties
Borrower Eligibility First-time and Repeat Home Buyers Amount Up to $10,000
Not required to be at maximum LTV first mortgage amount Terms 3.75% amortized over 10 years Purchase Price Limit $481,176 AUS
Borrower must qualify with additional monthly payment.
With AUS approval, can go up to 40/50% with all loans.
Required Repairs Buyer or seller must use OWN funds to pay for repairs DAP

Mortgage Revenue Bonds (MRB)

FHA
VA
RH​​S

​​​​

​​​​​Secondary Market Funding Source

  • First-time and repeat homebuyers statewide
  • 30-year fixed interest rate
  • Principal residence ONLY
  • Purchase Price Limit:  $481,176
  • Borrower must meet KHC’s Secondary Market Income Limits
Conventional Preferred ​Program
Conventional Preferred Plus 80
FHA
VA
RH​​S

Joel Lobb (NMLS#57916)
Senior Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708
kentuckyloan@gmail.com

 NMLS Consumer Access for Joel Lobb 

Privacy Policy

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

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#57916

— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

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Kentucky FHA Mortgage Lender

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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…

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Kentucky FHA Loan Requirements


Kentucky FHA Mortgage Loan Lender Guidelines

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 is 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 580 to 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.


FHA 

Low Down Payment which can be 100% gift from family member or Grant Program
Seller can pay closing costs-Maximum 6% of purchase price
There is maximum mortgage amount for each county. Check FHA loan limit for your county.
Non-occupant co-signers are allowed on this program.
FHA Approved Condos-Single family home-2-4 unit properties, and PUDs are eligible.
Fast automated underwriting approval available. Also, the file can be manually underwritten by a live person to get loan approval if you do not receive approval through automated underwriting system.

FHA Foreclosure Program 

Must be HUD Owned property or FHA Foreclosure in HUD Participating Communities
$100 Down Payment than standard FHA program
580 minimum credit score
Single family, 1-4 unit properties, HUD approved condominiums, and PUDS eligible

Repossession on a credit report for FHA Loan

How to handle a Repossession on a credit report for FHA Loan Approval?


How to handle a Repossession on a credit report for FHA Loan Approval?

Q: How should evidence of a previous repossession being on a Borrower’s credit report for an FHA loan be handled?

A: A Borrower can still owe money after a car or other property has been repossessed by a lender. The loan should be documented with evidence that any outstanding debt that may have resulted from the repossession is included in the qualifying DTI.

Documentation must be included in the loan file by either the borrower or from a credit supplement verifying whether or not any debt was left outstanding after the repossession.

If there is any debt outstanding after the repossession the terms of repayment must be provided and the debt must be included in the DTI.
If the remaining debt has gone into collections or been charged off ensure all FHA collection and/or charge-off requirements are met.

Does FHA require collections to be paid off for a borrower to be eligible for FHA financing?
A Collection Account refers to a Borrower’s loan or debt that has been submitted to a collection agency by a creditor.

If the credit reports used in the analysis show cumulative outstanding collection account balances of $2,000 or greater, the lender must:

•     verify that the debt is paid in full at the time of or prior to settlement using an acceptable source of funds;
•     verify that the Borrower has made payment arrangements with the creditor and include the monthly payment in the Borrower’s Debt-to-Income ratio (DTI); or
•      if a payment arrangement is not available, calculate the monthly payment using 5 percent of the outstanding balance of each collection and include the monthly payment in the Borrower’s DTI.

Collection accounts of a non-borrowing spouse in a community property state must be included in the $2,000 cumulative balance and analyzed as part of the Borrower’s ability to pay all collection accounts, unless excluded by state law.

Unless the lender uses 5 percent of the outstanding balance, the lender must provide the following documentation:

•     evidence of payment in full, if paid prior to settlement;
•     the payoff statement, if paid at settlement; or
•     the payment arrangement with creditor, if not paid prior to or at settlement.

For manually underwritten loans, the lender must determine if collection accounts were a result of:

•     the Borrower’s disregard for financial obligations;
•     the Borrower’s inability to manage debt; or
•     extenuating circumstances.

The lender must document reasons for approving a mortgage when the Borrower has any collection accounts. The Borrower must provide a letter of explanation, which is supported by documentation, for each outstanding collection account. The explanation and supporting documentation must be consistent with other credit information in the file.

For additional information see Handbook 4000.1 II.A.4.b.iv(M); II.A.5.a.iii(D), II.A.5.a.iv(O)  at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.
Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
 
American Mortgage Solutions, Inc.
 

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com

Kentucky FHA, VA, and USDA loans for purchase, refinance, and renovations, and we now allow credit scores down to 580.

Kentucky FHA, VA, and USDA loans for purchase, refinance, and renovations, and we now allow credit scores down to 580.


Kentucky First Time Homebuyers government mortgage programs offer expanded qualifying criteria for people with lower incomes or less-than-perfect credit.

Our expansive product set includes various Kentucky FHA, VA, and USDA loans for purchase, refinance, and renovations, and we now allow credit scores down to 580.

Other key features and benefits include:

Kentucky FHA Loans 3.5% down payment from borrower or other approved source1 Up to 6% seller’s concessions 580 credit score minimum Streamline and cash-out refinance options No reserves with most transactions AUS with TOTAL Mortgage Scorecard Kentucky VA loans Purchase, cash-out refinance, and Interest Rate Reduction Refinancing Loans (IRRRL) 100% loan-to-value available All closing costs may be paid by the seller No monthly mortgage insurance No prepayment penalty, and loan is assumable Kentucky USDA Mortgage Loans No down payment or reserves required 580 credit score minimum Financing available for closing costs and prepaid expenses2 Up to 6% interested party contributions