Fannie Mae recently announced they are making changes to their Credit Score Eligibility criteria

 

Conventional Loan News Fannie Mae recently announced they are making changes to their Credit Score Eligibility criteria in order to increase homeownership opportunities for underserved borrowers. As a result of this change, Fannie Mae will now allow a credit score average to be used on loans with more than one borrower.  In the past, the minimum credit score for all borrowers on a Fannie Mae Conventional loan was 620. While this 620 minimum still applies for loans with one borrower, an average can be used on loans with 2 or more borrowers. Borrowers with scores down to 580 are eligible as long as the average score on the loan is 620 or higher.  As an example, if Borrower 1 has a credit score of 619 and Borrower 2 has a credit score of 693, the representative credit score would be 656 and this loan would be eligible.  This is GREAT NEWS for Kentucky homebuyers.

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.
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Maps for Kentucky USDA Rural Housing Eligible Area

Maps for Kentucky USDA Rural Housing Eligible Areas 

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do


Kentucky USDA Rural Housing Applications submitted to RD for borrowers in the affected eligible areas (that will become ineligible) must be complete packages, including any required property appraisals and must be received by RD prior to February 2, 2015, to remain eligible for GRH approval.



USDA/Rural Housing:

USDA or Rural Housing loans are not available in the more highly populated counties in Kentucky . The counties of Jefferson and Fayette Counties are not eligible for USDA loans.

USDA loans require no down payment and are subject to income and property eligibility requirements by County..


Check Kentucky USDA Income Limits Here"----->>>>

Check Kentucky USDA Property Eligibility Limits Here--->>>>



All Kentucky Rural Housing Loans are ran through GUS, Guarantee Underwriting System, an online to determine your loan approval

The Automated Underwriting engine will come back with an Accept, Refer, or Ineligible.

Most USDA mortgage investor want an Accept on the initial underwriting approval to do the loan.

640 is the score that most USDA lenders want, but USDA will go down to a 580 credit score in their guidelines but it is very difficult to get approved.

If you have a score below 640 and trying to go USDA, work on getting your credit scores up first




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





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#57916http://www.nmlsconsumeraccess.org/