Here is what you need to know: When someone’s Louisville Kentucky FHA loan goes into foreclosure, that home becomes a HUD home. HUD becomes the owner of the home and offers the home for sale to recover the loss on the foreclosure. This can create a big opportunity for Louisville Kentucky First Time Home Buyers, because HUD will allow you to obtain an FHA loanand instead of 3.5% down, you only have to put $100 down.
Other things to consider:
So you’re asking how do I find these homes. As mentioned, only certain homes are available for the $100 down HUD program, so you need a Realtor that is knowledgeable about the program and has access to the bidding process. The bidding process can be overwhelming unless you are working with the right people. Call me today to get pre-approved and I can refer you to a Realtor in your area that can get you a home, with only $100 down.
FHA Announces Important Guideline Changes.
Mortgagee Letter 2012-3 announces several key guideline changes on topics of self-employment, disputed credit, outstanding collections and identity of interest definitions. These changes are good from the perspective that they offer much clearer underwriting requirements on several key topics so not as much is left to interpretation or opinion. All of these changes are effective for cases assigned on and after April 1st.
Topic: Self-Employment
New Requirement for AUS Approve/Accept & Manual Underwriting: A P&L and Balance Sheet is required if more than a calendar quarter has elapsed since date of most recent calendar or fiscal-year end tax return was filed by the borrower – with no exceptions. Additionally, if income used to qualify the borrower exceeds the two year average of tax returns, an audited P&L or signed quarterly tax returns obtained from IRS are required.
Topic: Disputed Credit Accounts
New Requirement: AUS Accept/Approve does not need to be downgraded to a Refer and manually underwritten as long as
• the total outstanding balance of all disputed credit accounts or collections are less than $1,000, and
• Disputed credit accounts or collections are aged two years from date of last activity as indicated on the most recent credit report.
If the borrower has individual or multiple disputed credit accounts or collections with singular or cumulative balances equal to or greater than $1,000, the accounts must be resolved (e.g. payment arrangements with a minimum three months of verified payments made as agreed) or paid in full, prior to, or at the time of closing. The payments arranged for the accounts must be included in the calculation of the borrower’s debt-to-income ratios.
Disputed credit accounts or collections resulting from identity theft, credit card theft, or of unauthorized use, etc., will be excluded from the $1,000 limit under the terms shown below. The mortgagee must provide a credit report or letter from the creditor, or other appropriate documentation, to support that the borrower filed an identity theft or police report to dispute the fraudulent charges. Mortgagees must provide documentation in the case binder to show all disputed or collection accounts are resolved, verified as not a debt to the borrower, arrangements made for payment, or paid in full.
Topic: Outstanding Collection Accounts & Court-Ordered Judgments
New Requirement: If the total outstanding balance of all collection accounts is equal to or greater than $1,000 the borrower must resolve the accounts (e.g. entered into payment arrangements with minimum three months verified payments- paid as agreed) or paid in full at the time of, or prior to closing. If the total outstanding balance of all collection accounts is less than $1,000, the borrower is not required to pay off the collection accounts as a condition of mortgage approval.
Note: Paying “down” of balances on disputed accounts and collections to reduce the singular or cumulative balance to below $1,000, is not an acceptable resolution of accounts.
An exception to the payoff of a court-ordered judgment may be made if the borrower has an agreement with the creditor to make regular and timely payments, and provides documentation indicating that a minimum of three months payments have been made according to the agreement. The monthly payment must be included in the borrower’s debt-to-income ratio.
Topic: Identity of Interest Transaction
New Requirement: The definition of a family member for establishing “identity of interest” purposes has been expanded to include a child, parent, grandparent, spouse, legally adopted son or daughter, including a child who is placed with the borrower by an authorized agency for legal adoption, foster child, brother, stepbrother, sister, stepsister, uncle, and aunt.
Please be sure to read the Mortgagee Letter in its entirety.
Down Payment Assistance Program – Housing & Community Development – LouisvilleKy.gov.
The Down Payment Assistance Program provides qualified homebuyers a loan to assist with purchasing a home which will be their primary residence.
Homebuyer households must have income no greater than 80% of median income, adjusted for family size.
All Homebuyers must complete HUD approved homeownership counseling before assistance can be committed. A Certificate of Completion from the counseling agency must be submitted with the application. Contact The Louisville Urban League at (502) 585-4622 or The Housing Partnership Inc.at (502) 585-5451 for counseling.
Metro Government has revised its Down Payment Assistance Program increasing the amount of assistance.
We are now offering Metro Wide assistance, and homebuyers may qualify for a forgivable mortgage which will be forgiven over a five (5) year period of 10% of the purchase price of the home to a maximum of $10,000.
We will continue to provide maximum assistance in our 2009 Target Area neighborhoods, and homebuyers may still qualify for a forgivable mortgage which will be forgiven over a ten (10) year period of 20% of the purchase price of the home to a maximum of $20,000.
Our Department has also allocated closing cost assistance in the amount of up to $2,000 for down payment assistance programs; however, homebuyers must pay all prepaid costs from their own funds.
Homebuyers are responsible for obtaining primary financing with a fixed rate mortgage from a reputable lender.
A Housing Quality Standards inspection will be conducted by a Louisville Metro inspector before closing. All deficiencies must be corrected and verified by re-inspection prior to closing
A HUD-1 closing statement must be received two working days (48 hours) prior to closing.
Applications will be accepted at any time. Assistance is granted on a first come, first serve basis. For more information about the Down Payment Assistance Program, please call 574-3107.
810 Barret Avenue, Louisville, Kentucky 40204
Office Hours: 8:00 a.m. – 5:00 p.m.
Clients are seen by appointment – please call
Phone: (502) 574-3107
FHA Mortgage Insurance Premiums Increasing April 9, 2012.
via FHA Mortgage Insurance Premiums Increasing April 9, 2012.
Planning to use an FHA-backed mortgage for your next home loan? You might want to get your application in gear today.
Beginning next week, the Federal Housing Administration (FHA) is changing the way it charges mortgage insurance to U.S. homeowners. For the fourth time since 2010, FHA mortgage insurance premiums are rising for all FHA-backed homeowners.
For FHA Case Numbers assigned on, or after, Monday, April 9, 2012, there are two planned changes.
First, FHA Upfront Mortgage Insurance Premiums (UFMIP) will increase by 75 basis points to 1.75%, or $1,750 per $100,000 borrowed. Upfront Mortgage Insurance Premium is paid at closing, and typically added to an FHA borrower’s loan size.
The current UFMIP rate is 1.000 percent.
Second, annual FHA mortgage insurance premiums are rising. All new FHA-backed loans will be subject to a 10 basis point increase in annual mortgage insurance premiums, costing homeowners an extra $100 per $100,000 borrowed per year.
The new FHA annual mortgage insurance premium schedule follows :
In addition, for loans above $625,500, beginning with FHA Case Numbers assigned on, or after, June 11, 2012, there will be an additional 25 basis point increase in annual MIP.
To calculate your monthly MIP obligation as a FHA homeowners, multiply your starting loan size by your insurance rate from the list above, then divide by 12.
Note that the FHA mortgage insurance changes apply to new FHA Case Numbers only. If you have an FHA mortgage approval in-process, or an existing FHA home loan, you are not subject to the new MIP schedule. To avoid paying the FHA’s new MIP schedule, therefore, begin your FHA mortgage application today.
Once your FHA Case Number is assigned, you’re locked in to today’s lower premiums.
FHA Updates Credit Qualifying Guidelines.
FHA (Federal Housing Administration) mortgages are known for the easier and flexible credit qualifying guidelines that are offered to borrowers. It is for this reason that so many people choose FHA mortgages for their financing. Recently, FHA has updated the credit qualifying guidelines for disputed accounts and collections that becomes effective April 1st.
When the borrower has one or several disputed credit accounts and/or collections with a total balance that is equal to or above $1,000, the accounts must be resolved by payment arrangement or paid in full prior to or at closing. If not paid in full, these payments will be included in the debt to income ratios. If payment arrangements have been made, there must be at least three months of verified payments as per the agreement made with the creditor. Any disputed account or collections that are the result of credit card theft, identity theft or unauthorized use are excluded from the $1,000 calculation. There must be related and appropriate documentation, such as a police report, to substantiate this claim.
When the total amount due on outstanding credit and/or collection accounts is below $1,000 the borrower does not have to pay off the accounts in order to receive approval. It is not considered an acceptable resolution according to FHA to pay down balances on any of these accounts in order to bring the balance below $1,000. FHA requires that court ordered judgments be paid in full prior to FHA mortgage approval. In the case of a court ordered judgment in which the borrower has an agreement to make regular payments and can show the documentation that at least three months of payments have been made, a borrower can continue to pay off the judgment and the payments will be included in the debt to income ratios.
Acceptable documentation to support any resolutions to credit or collection accounts include a letter from the creditor which outlines the terms of the payment arrangements or verifies the payoff of debt, canceled checks or a credit report supplement that verifies the payoff or payment arrangements. It is likely that more borrowers will be cleaning up their credit prior to making an FHA mortgage application once these FHA updates for credit qualifying go into effect.
Kentucky FHA Mortgage Lender 