Kentucky Mortgage: Kentucky FHA Mortgage Information

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky FHA Mortgage Information: How to Qualify For a Kentucky FHA Mortgage Loan 1. Low Down Payment   –  FHA Mortgage Loans only require a 3.5% down payment. And what m...

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Using FHA Gift Funds for a Kentucky FHA Mortgage Approval.

Clarification of FHA Definition of "Family Member"

In all instances where FHA uses the term "Family Member", it is defined as any of the following:

 

• Child: defined as any son, stepson, daughter, stepdaughter, or foster child
• Parent: including step-parents and foster parents
• Grandparent: including step-grandparents and foster grandparents
• Sibling: defined as any brother, stepbrother, sister, or stepsister
• Uncle
• Aunt
• Legally adopted son or daughter, including a child who is placed with the borrower by an authorized agency for legal adoption
• Spouse or domestic partner
• In-Laws: defined as any son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the borrower

Earnest Money  Old Rule – Document source of earnest money if the amount exceeds 2% of the sales price New Rule – Document source of earnest money if the amount exceeds 1% of the sales price CAIVRS  Old Rule – defaulted federal debt makes borrower ineligible New Rule – VERIFIED defaulted federal debt makes the borrower ineligible Part-Time Income Old Rule – Underwriter discretion allowed when received less than 2 years New Rule – Two years uninterrupted part-time income is required.  Average income over prior 2 years or use 12-month average of hours at the current pay rate if the lender documents an increase in pay rate. Rental Income on Retained Primary Residence Old Rule – Rental income may be counted when relocating outside of reasonable commute distance for job and borrower has 25% equity. New Rule – Rental income may be counted when relocating and the new residence is at least 100 miles from previous residence.  If no history of rental income since the last tax filing, borrower must have 25% equity. Non-taxable income  Old Rule – Gross up using tax rate evidenced on last tax return.  If borrower did not file a return, use tax rate of 25%. New Rule – Gross up using the greater of 15% or actual tax rate.  If borrower did not file a tax return, use tax rate of 15% Installment Debts Less Than 10 Months Old Rule – May be excluded from ratios.  If manual underwrite—may be excluded if debt will not affect ability to pay the mortgage. New Rule – May be excluded ONLY if—they have cumulative payment of less than or equal to 5% of the borrower’s gross monthly income AND the borrower may not pay the debts down to achieve this percentage. Multiple FHA Loans Old Rule – If relocating for employment, borrower may obtain a second FHA loan for a new principal residence if current residence is more than a reasonable commute to new residence. New Rule – If relocating for employment, the commuting distance between the old residence and new residence must be more than 100 miles.

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc.

10602 Timberwood Circle, Suite 3

Louisville, KY 40223

 phone: (502) 905-3708

 Fax:     (502) 327-9119

kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/