Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Variable Income for A Mortgage Loan Approval in Ke...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Variable Income for A Mortgage Loan Approval in Ke...: How to get approved for a Kentucky FHA, VA, USDA and Fannie Mae Mortgage loan with Variable Income    Variable INCOME if your borrower is no...

Variable Income for A Mortgage Loan Approval in Kentucky

How to get approved for a Kentucky FHA, VA, USDA and Fannie Mae Mortgage loan with Variable Income 

Kentucky USDA Rural Housing Mortgage Lender: Kentucky Rural Housing USDA Maximum Income by Coun...

Kentucky USDA Rural Housing Mortgage Lender: Kentucky Rural Housing USDA Maximum Income by Coun...: 2020 Kentucky USDA Loan Income Limits for Kentucky Counties  Kentucky USDA loan income limits vary by location and household size wi...





The base USDA income limits are for most Kentucky counties below: 

New Income limits for most counties (*) in Kentucky are $90,300 for a household family of four and household families of five or more  can make up to  $119,200.

With the new changes for 2020 USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of $90,300 for a family of four and up to $119,200 for a family of five or more. The metro area surrounding counties of Jefferson County includes Oldham, Bullitt, Spencer are included in these higher income limits for USDA loans.

Remember,  the entire  Jefferson County and Fayette County  Kentucky counties are not eligible for USDA loans. Along with parts of the following counties Daviess (Owensboro), Mccracken (Paducah), Madison County, (Richmond), Clark County (Winchester), Warren (Bowling Green), Hardin (Fort Knox and Radcliff), Bullitt(Hillview, Maryville, Zoneton, Fairdale, Brooks), Franklin, (Frankfort), Henderson (Henderson City Limits), Christian County (Hopkinsville, Fort Campbell), Boyd County (Ashland city limits) and the most Northern Parts of Boone, Kenton, Campbell Counties of Northern Kentucky (Covington, Florence, Richwood, Hebron, Ludlow, Fort Thomas, Bellevue, Ryle, Beechwood, ) 

The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Brackenn, Gallatin, and Pendleton are $99,250 for a household of four or less and up to $131,000 for a family of five or more.

USDA Eligible Areas in Northern Kentucky
Burlington
Hebron
Independence
Walton
Alexandria
Highland Heights
Cold Springs
Grant County
Owen County
Pendleton County
​

USDA Income Limits
Boone, Kenton & Campbell Counties (N. KY)
​
$99,250  (family size 1-4)
$131,000 (family size 5 or more)
​

Grant, Owen & Pendleton Counties (N. KY)
​
$90,300 (family size 1-4)
$119,250 (family size 5 or more)



Most are familiar with USDA Rural Housing Loan Program  being a great no money down program available and it is not just for Kentucky first time buyers.

Here are three basic factors for qualifying for a Kentucky home loan:

Here are three basic factors for qualifying for a Kentucky home loan:

Income and Job History - If you have a job or steady source of income, you're off to a great start. 2 year work history, does not have to be same employer, but what they are looking for is a stable employment history with a consistent income. 

Gross income is used not net income off monthly income. 

Down Payment -  Many programs will work with 5%, 3.5%, and in some cases, even 0% down. Sometimes, closing costs can be paid for you as well. Some zero down home loan programs in Kentucky are:

USDA, VA, Kentucky Housing Down Payment Assistance Programs Chenoa Down Payment Assistance, and the Welcome Home Grant.

Credit –  If you have a middle credit score over 620, you will be ahead of most borrowers. If your score is below 620, then you will be looking at an FHA loan with 3.5% down payment. 

No bankruptcies in the last 2-4 years for most secondary market program and the higher your score the better the rate and mortgage insurance on a conventional loan. 

  

Income Guidelines for Job time Employment and Income Requirements For Mortgage Loan Approval.

EMPLOYMENT PROFILE TIPS
(FANNIE AND FHA)

FHA requires you to establish that the income is in fact stable. I am covering Time on Job, Part Time Income, Seasonal Income and Job Gaps below.

Time on Job

There is not a minimum length of time a borrower must have held a position for the income to be eligible. However, the application must identify the most recent 2 years of employment.

If the borrower’s employment history indicates that they were in school or in the military, then the borrower must provide evidence supporting this such as college transcripts or discharge papers.

The current type of employment has to be supported by the college transcripts or discharge papers showing that he borrower’s training enabled them to gain employment in their field of training.

Part Time Income 

Part-time and second job income can be used to qualify if documentation is obtained to prove that the borrower has worked the part-time job uninterrupted for the past two years, and plans to continue.

For Qualifying purposed, “part-time” income refers to jobs taken to supplement the borrower’s main income from regular employment, such as a second job that is less than 40 hours per week.

Income: Is averaged over the previous 2 years. If there was a pay rate increase and we can document the increase in pay, you can average the new pay rate over 12 months.

Seasonal Income

Seasonal income may be acceptable for qualifying. It is not unusual to have out-of-season income from unemployment income. If the borrower has a 2 year history and continuance is probable, this type of income may be allowed to qualify the borrower.

The key here is history and continuance.

Job Gaps

The borrower must provide a signed explanation for gaps in employment as follows:

Income can be considered effective if the following can be verified:

1. Borrower has been employed in the current job for at least six months at the time of the case number assignment AND

2. A two year work history prior to the absence from employment.

Gaps in Employment A borrower who has no verifiable employment for 6 months or longer is deemed to have a gap in employment.  Fannie:  Fannie does not address gaps in employment in their guidelines.  We must ensure that DU’s income documentation can be met.  This will typically require the borrower’s most recent paystub and a W-2 from the most recent year.  FHA:  borrower must be employed at their current job for 6 months or more at the time of case number assignment and a 2 year work history prior to the gap can be documented. Medical or Temporary Leave Income The borrower has taken a temporary leave of absence from work typically for medical leave such as maternity, illness, surgery, or on the job injury.  This leave is short term in nature and the borrower is still employed with their same employer prior to the leave of absence.  Fannie & FHA: If the borrower will return to work prior to the first mortgage payment date, the borrower’s regular employment income can be used for qualifying.  If the borrower will not return to work prior to the first payment date, the lesser of the temporary leave income (if any) or regular employment income must be used for qualifying. If temporary leave income is less than regular employment income, the borrower may use available liquid reserves to calculate supplemental income per Fannie guidelines. The employer must also verify the borrower intends to return to work and has the right to return to work. Frequent Job Changes Frequent job changes may indicate instability in a borrower’s income. Fannie: Individuals who change jobs frequently but who are nevertheless able to earn consistent and predictable income are considered to have a reliable flow of income for qualifying purposes. FHA: If the borrower has changed employers more than three times in the previous 12 month period or has changed lines of work requires additional underwriter analysis to determine job stability.  This may include but is not limited to documentation of training and education for new employment or documentation evidencing continual increases in income or benefits. Seasonal Employment Seasonal Employment refers to employment that is not year round typically due to weather conditions.  Seasonal Employment can be full time or part time. Fannie & FHA:  Borrower must have worked the same job (or same line of seasonal work) for the past 2 years and the borrower’s employer must state there is a reasonable expectation that the borrower will be rehired for the next season.  Tax returns will be required if unemployment compensation will be used to qualify the borrower.  *Income calculation will follow calculation guidelines.  These guidelines are for employment history and profile only.

W2 Income Tips

Income plays a significant role when applying for a mortgage loan. Underwriters must follow both DU and agency guidelines when it comes to documenting and calculating qualifying income for a loan transaction. Income guidelines may vary slightly depending on the loan program and the borrower’s employment profile. Below are some general tips for W2 income.    Documentation that may be required Paystub with year to date gross earnings At least 1 year’s W2 Verbal or full VOE Base Pay Salaried and fixed hourly income is calculated by averaging the gross year to date income  Variable hourly income is calculated by averaging 12 month history Commission and tip income is calculated by averaging over 24 months No transcripts are required for salaried, hourly, or less than 25% commission W2 income borrowers Unreimbursed expenses do not have to be deducted from the gross pay for salaried, hourly, or less than 25% commission W2 borrowers Overtime, and Bonus Income Overtime and Bonus can be used as effective income as long as it’s been received for 2 years and is reasonably likely to continue Periods of less than 2 years may be considered as long as it’s been consistently earned over a period of at least 12 months and there are positive factors to offset the shorter history of receipt per underwriter discretion Overtime and Bonus income must be documented by a full VOE Declining overtime and bonus income cannot be used for qualifying income Part Time Income FHA requires a 2 year history of working multiple jobs Fannie will allow less than 2 years as long as it’s been consistently earned over a period of at least 12 months and there are positive factors to offset the shorter history of receipt per underwriter discretion

Self Employed Income

• A borrower is considered self employed if they have 25% or more ownership in a business. • Contract or 1099 employees are self employed borrowers • There are 4 types of self employed business structures o  Sole Proprietorships o  Corporations o  Limited Liability Company (LLC) o  Partnerships Tax Returns are always required for a self employed borrower.  Depending on the business structure, the borrower may have business returns in addition to their personal tax returns. 1099, Sole Proprietorships, and LLC self employed borrowers typically file Schedule C on their personal tax returns Corporations and Partnerships will file Business Tax Returns in addition to their personal returns.  The business returns will include K1’s listing the borrower’s ordinary business income and percentage of ownership. Corporation and Partnerships may also have W2 income in addition to their K1’s. All self employed income is calculated per agency guidelines Self employed income requires a 2 year history.  Declining self employed income typically cannot be used unless allowed by specific agency of loan program

Joel Lobb
Senior Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
10602 Timberwood Circle, Suite 3
Louisville, KY 40223

text or call my phone: (502) 905-3708
email me at kentuckyloan@gmail.com

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice.

Joel E Lobb
American Mortgage
5029053708
email us here

Kentucky FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans.

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Kentucky Rural Housing USDA Credit and Income Guidelines

• No Down Payment required, 100% financing available
• 30 year fixed rate only no other terms allowed.
• Not limited to First Time Home buyers! Also available for the move up home buyer.
• More affordable than FHA when compared to mortgage insurance
• Seller concession fees at 6%
• No Bankruptcies last 3 years or foreclosures last 3 years
• Typical max income household income limits are centered on how many people are going to live in the home and which county you are going to buy a home in. Most Counties in Kentucky are maxed at $87k for a household of four or less, and up to $115k for a household of five or more. 
• Debt to income ratios are usually centered around 45% on the back-end ratio, meaning the new house payment plus the monthly bills on the credit report cannot be more than 45% of our total gross qualifying income. 
• There is also a front end ratio, which is the new house payment only divided by the gross monthly income. This can vary anywhere between 20% to 35% I have seen on some borrowers depending on your credit scores and assets. 
• If you have access to 20% down payment, you cannot use the USDA loan program.
• Only new manufactured homes are allowed for USDA loans and the dealer must be approved contractor with USDA 
• Swimming pools are okay for USDA loans on appraisals.
• Working farms are not allowed with USDA loan, but there is no acreage limits on 
• USDA loans. 

• Guarantee Fee applies. May be financed and added to the loan amount
• Flexible credit guidelines and 620 FICO***Even though USDA states in the guidelines that they will go down to a 581, most lenders will not go below 620 to 640 score range  that I work with. 
• Manual underwrites, meaning if you get a refer through the Automated system their is chance you can still get approved. 
• Ratios per GUS Approval--GUS stands for their Automated Underwriting System which lenders use to get borrowers pre-approved. It will review credit, income, and assets along with area, purchase prince amount and determine your loan pre-approval
• Flipped properties within 90 days of seller acquisition are allowed
• Household income may not exceed 115% of the area's median income level*
• Transferred appraisals are okay, so FHA will work for USDA appraisals.
• 
  

Income Guidelines for A Kentucky VA and Rural Housing Loan Approval?

Employment Guidelines for Kentucky Rural Housing and Kentucky VA Loans Mortgage Approval Gaps in Employment in regards to a Rural Housing Loan in Kentucky A borrower who has no verifiable employment for 6 months or longer is deemed to have a gap in employment. RHS or USDA loan approval: Any gaps in employment must be analyzed in order to make a final determination of stable and dependable income. An employment gap does not automatically render an applicant ineligible. Applicants with job gaps due to maternity leave, medical leave, relocation, etc. are considered to have employment continuity. Applicants returning to the workforce after leaving a previous job to care for a child/family member, complete education, etc. will require a 12 month employment history. Kentucky VA mortgage loans" VA does not address gaps in employment and generally does not consider non military employment less than 12 months as stable and reliable. Any exceptions based on the loan as a whole is underwriter discretion. Medical or Temporary Leave Income in regards to a Rural Housing Loan or VA loan in Kentucky The borrower has taken a temporary leave of absence from work typically for medical leave such as maternity, illness, surgery, or on the job injury. This leave is short term in nature and the borrower is still employed with their same employer prior to the leave of absence. RHS & VA: Borrower’s on temporary leave are not eligible for a Kentucky Mortgage loan transaction. Frequent Job Changes for Kentucky VA and Rural Housing Mortgage Loans Frequent job changes may indicate instability in a borrower’s income. RHS: Many low and moderate-income applicants change jobs frequently due to the nature of the employment available. Applicants should not be penalized for frequent changes in jobs within the same line of work if, despite the changes, income continuity has been maintained and the income amount has remained at a consistent level. VA: The borrower must demonstrate the ability to maintain an income at a constant level over the recent 2-year period even if he or she has worked for a variety of employers. Seasonal Employment for a Kentucky VA and USDA Mortgage Loan Seasonal Employment refers to employment that is not year round typically due to weather conditions. Seasonal Employment can be full time or part time. RHS & VA: Borrower must have worked the same job (or same line of seasonal work) for the past 2 years and the borrower’s employer must state there is a reasonable expectation that the borrower will be rehired for the next season. Tax returns will be required if unemployment compensation will be used to qualify the borrower. **Income calculation will follow calculation guidelines. These guidelines are for employment history and profile only.

Can I Get Approved for A Kentucky Mortgage Loan Using Alimony As Income?

Alimony Income Guidelines Below For Different Mortgage Loan Programs

            Conventional Loan

Final Divorce Decree, Separation Agreement, Court Decree, or any other type of written legal agreement recorded with the courts. Receipt of most recent 6 months of total court ordered amount & scheduled timely payments as per the terms of the court order/written legal agreement. Court order/Written legal Agreement stipulates that alimony will be paid for at least 3 years after the date of the Note/Closing.    FHA Allows Some Flexibility      If the borrower has a: Final divorce decree, Legal separation agreement, or Court order Receipt of recent 3 months of total court ordered amount & scheduled timely payments as per the terms of the court order. 3 Legal documents noted above stipulate that alimony will be paid at least 3 years after the date of the date of the Note/Closing. If the borrower has a: Voluntary payment agreement Document the voluntary payment agreement with the most recent 12 months of cancelled checks, deposit slips or tax returns If the borrower has received consistent alimony Income for the recent 6 months, you may use the current payment amount to calculate effective income, if the amount has not been consistent, then the income must be averaged over the previous two years of receipt Document the income will continue for at least 3 years from the date of the Note/Closing VA Requirements Divorce Decree that stipulates alimony will be paid for at least 3 years after the date of the Note/Closing Proof of regular and scheduled deposits on bank statements for most recent 3 months Joel Lobb Senior  Loan Officer (NMLS#57916) American Mortgage Solutions, Inc. 800 Stone Creek Pkwy, Ste 7, Louisville, KY 40223 phone: (502) 905-3708 kentuckyloan@gmail.com    Company ID #1364 | MB73346 http://mylouisvillekentuckymortgage.com