​ HOME LOAN BASICS

• NO DOWN PAYMENT REQUIRED
• Closing costs can be financed into the loan
• Minimal credit score requirements – NO minimum score
• Low monthly mortgage insurance
• Home must be located in an eligible area
• Home must meet property eligibility requirements
• Fill out worksheet to get additional information about qualifying
• Must be a regular stick-built home
• Single Close Construction Program available
• USDA to USDA Streamline Refinances available

SFH Direct Loan and Grant Programs

February 7, 2022

Fee Increases for Origination Appraisals and Conditional Commitments

An Unnumbered Letter (UL) dated February 4, 2022, has been issued which increases the appraisal fee to $750 and the conditional commitment fee to $825 under the direct programs. The fee increases are effective March 6, 2022. The increased fees reflect market price increases for origination appraisals in rural areas and the average cost of appraisals under the programs’ nationwide contract with the Appraisal Management Companies.

As with all loan programs, the USDA Loan requires that an independent appraiser inspect the subject property in order to determine the property value. Specific to a USDA Loan, the appraisal report will be conducted by an FHA approved appraiser. The appraisal report must include verbiage or similar verbiage:

“The subject meets minimum standards as set under guidelines established by the U.S. Department of Housing and Urban Development and indicated in Handbooks 4000.1”

No different from a FHA or VA appraisal inspection, the appraiser is required to document all property deficiencies that preclude the appraiser from signing off on their report. A property deficiency is any defect to the house that the appraiser deems necessary to have repaired to ensure compliance to the loan program guidelines. Typical examples of property deficiencies include:

• Chipped and peeling paint
• Missing handrails on stairs and railing on decks
• Lights not working properly and wires…

Kentucky USDA Loan Guidelines

Borrower Eligibility

• U.S. citizens
• Permanent resident aliens
• First time homebuyers allowed
• Non-occupant co-borrowers NOT allowed

Commitment Fee

• USDA charges a 1% Commitment Fee
• Commitment Fee can be financed into the loan
• Example:
  • Purchase price – $100,000
  • Base Loan amount – $100,000
  • Commitment Fee – $1,010 ($100,000 [purchase price] /.99 – 100,000)
  • Maximum financed loan amount = $101,010

Downpayment Requirement

• No down payment is required
• If borrower has adequate liquid assets (i.e. 20% of the property purchase price) to obtain conventional financing the borrower may be ineligible for the USDA Rural Development Loan

Eligible Properties

• Must be in an eligible USDA Rural Development Location
• Owner-occupied properties
• Existing attached & detached single family residences
• New construction with permanent financing only
• PUD’s (i.e. Townhomes)
• Condo-units. HUD, VA, FNMA or FHLMC approved project
• Log cabin homes, provided Appraisal Report lists other comparable log cabin homes that have recently sold in…

Kentucky FHA Loan Requirements for 2022 to include Credit Fico Scores, Down Payment, Income and Job history