Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans FHA LOAN FLOOD INSURANCE KENTUCKY, flood insurance mortgage kentucky, KY FHA LOANS

How does Flood Insurance Affect A Kentucky FHA Mortgage Loan Approval?

A woman stands in her flooded living room. There are a couple of inches of water over the floor and she has a shovel and water-proof boots on. The National Flood Insurance Program logo has been embedded into the top left corner of the photo.

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Here are the facts about flood insurance in regards to FHA mortgage loans in Kentucky:

  1. A lender will require if the Kentucky home mortgage property is in a flood zone. High-Risk areas are A or V. Zone X doesn’t require it.
  2.  The flood zone is based on local elevation certificates. Sometimes the surveys on these certificates are old, and updates can be requested. There is usually a cost involved, but it can lower the Zone so it may be worth it.
    3. Kentucky Insurance companies think of floods as very different than the general public. Most people think flooding is when a body of water rises and gets into your house. Floods are defined as any ground-water entering a house from the outside. Even if you are not in a flood zone, groundwater damage won’t be covered by homeowner’s insurance.
    4. Kentucky Flood insurance is priced by FEMA regardless of what the company writes it. All rates will be the same and shopping won’t help. If one company has different rates, it will always be a difference in coverage.
    5. Flood insurance in Kentucky flood zones are expensive, but outside flood zones, it is more cost-effective. This is up to the individual to decide whether they want it or not.
    6. Flood insurance coverage does not begin until 30 days after the policy is bound and the Kentucky Mortgage has closed. New Purchase no waiting period.
    7. Kentucky Flood insurance costs are higher for non-owner-occupied property such as rental property.
    8. A customer in Kentucky can mitigate costs by only covering the property structure or contents only in the lowest floor.

What is the mobile home or manufactured home is located in a Flood Zone for a Kentuck FHA Mortgage Loan Approval?

If the finish grade beneath the Kentucky Mobile Home or manufactured home is at or above the 100 yr return frequency flood elevation, so the only other option to be eligible for FHA financing is if a LOMA is issued by FEMA.   Like I said, I do not know if FEMA will issue a LOMA, but worth a try.  Here are Kentucky FHA guidelines for mobile homes in Flood plains

(d) Eligibility for Manufactured Housing in SFHAs The finished grade level beneath the Manufactured Home must be at or above the 100-year return frequency flood elevation. If any portion of the dwelling, related Structures or equipment essential to the Property Value and subject to flood damage for both new and existing Manufactured Homes are located within an SFHA, the Property is not eligible for Kentucky FHA mortgage insurance unless the Mortgagee obtains:

  • a FEMA issued LOMA or LOMR that removes the Property from the SFHA; or
  • a FEMA National Flood Insurance Program (NFIP) Elevation Certificate (FEMA Form 086-0-33) prepared by a licensed engineer or surveyor stating that the finished grade beneath the Manufactured Home is at or above the 100-year return frequency flood elevation, and insurance under the NFIP is obtained.

When making a determination for flood insurance purposes, the controlling document is the current effective Flood Insurance Rate Map. FEMA understands that sometimes structures will be shown to fall within the flood hazard area on the flood map when in reality the structure is elevated above the flood hazard. FEMA has created a process called the Letter of Map Amendment (LOMA) where they will review the elevation of the structure to determine if it can be removed from the flood hazard.

FEMA specifically reviews the Lowest Adjacent Grade and compares it to the Base Flood Elevation. Unfortunately, because FEMA says the FIRM is the controlling document, SLNF is not able to revise our determination until FEMA has amended the FIRM through the LOMA process. Because the elevation certificate has already been obtained, there will not be any additional cost to apply for the LOMA.

Below is a link to the FEMA website, where an instruction packet (How to fill it out, what to include, and where to send it) and the application can be found for the LOMA. You may also call the FEMA Map Information Exchange at (877) FEMA MAP with questions regarding the LOMA process.

The LOMA process generally takes 6-8 weeks to complete. The current year’s insurance premiums will be refundable through the National Flood Insurance Program (NFIP) if a LOMA removal is issued for the structure. Please let us know if you have any questions.

http://www.fema.gov/letter-map-amendment-letter-map-revision-based-fill-process

Thank you,

HUD INCREASES FLOOD INSURANCE OPTIONS FOR KENTUCKY HOMEOWNERS WITH KENTUKY FHA MORTGAGES LIVING IN FLOOD AREAS

Federal Housing Administration to allow private flood insurance policies on insured single-family mortgages in special flood hazard areas

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), is announcing today that effective December 21, 2022, it will allow homeowners with FHA-insured mortgage financing to obtain flood insurance policies that conform to FHA requirements from private insurance providers. The change was announced through a final rule published in the Federal Register today and in a companion Mortgagee Letter, also published today, that provides implementation guidance for FHA-approved lenders.

FHA requires that insured mortgages for properties in Federal Emergency Management Agency (FEMA)-designated Special Flood Hazard Areas (SFHAs) have flood insurance. Previously, only flood insurance obtained through the National Flood Insurance Program (NFIP) was permissible for FHA-insured mortgages, which limited choices for consumers.

“Today, HUD is increasing the flood insurance choices available to individuals and families with FHA-insured loans in areas that FEMA has designated to be at special risk for flooding,” said HUD Secretary Marcia L. Fudge. “Flood insurance is required to ensure families and individuals are prepared if disaster strikes. Increasing consumer options for this important protection is one way we are building more resilient communities in the face of climate change.”

“We know borrowers face affordability challenges right now, yet a flood can be devastating to a family who is not properly insured,” said Federal Housing Commissioner Julia Gordon. “The choice to select a private flood insurance option may enable some borrowers to obtain policies that are less expensive or provide enhanced coverage.”

As part of its implementation, as of December 21, 2022, FHA will require lenders to provide detailed flood insurance coverage information when electronically submitting mortgages for FHA insurance on properties in SFHAs. This data collection is an objective included in HUD’s Climate Action Plan and will allow FHA to capture and analyze flood insurance information on mortgages in its portfolio at a more granular level than has been possible previously.

Ensuring that borrowers are protected against flood risk is a key component of HUD’s Climate Action Plan. In 2021, HUD released its Climate Action Plan in response to President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad. HUD has been implementing this broad approach to the climate crisis that reduces climate pollution; increases resilience to the impacts of climate change; protects public health; delivers environmental justice; and spurs well-paying union jobs and economic growth. The action today further guides the integration of climate resilience and environmental justice into HUD’s core programs and policies. For more information about HUD’s work to advance sustainable communities and address climate change, visit hud.gov/climate.

#fha #fhaloans #fhaloan #floodinsurance #mortgage #homeloan #homebuying #homebuyingtips

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Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.

Text/call:      502-905-3708

fax:            502-327-9119
email:kentuckyloan@gmail.com

Read More at the Links below about qualifying for an FHA Loan in Kentucky?

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Kentucky Counties FHA limits

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans Bankruptcy, bankruptcy fha, usda, va, conventional loan, Chapter 13 Bankruptcy Guidelines, chapter 7 bankruptcy, chapter 7 or chapter 13

Types of Kentucky Mortgage Loans to Consider After Bankruptcy

Types of Kentucky Mortgage Loans to Consider After Bankruptcy

If you want to try to get a Kentucky mortgage after bankruptcy, you can research a number of different types of loans. Each mortgage loan has its own unique requirements for bankruptcy filers.

Kentucky FHA Loans

Federal Housing Administration (FHA) loans are managed by the federal government and may allow you to buy a house with a down payment that’s as little as 3.5% of the purchase price. The downfall of FHA loans, however, is that you’ll have to pay for mortgage insurance, which will result in higher monthly payments.

To get a mortgage after bankruptcy using an FHA loan, you’ll have to adhere to these waiting periods:

  • Chapter 7: Two years from your discharge date
  • Chapter 11: No waiting period
  • Chapter 13: One year from your discharge date

Kentucky USDA Loans

U.S. Department of Agriculture (USDA) loans are designed for rural borrowers who meet certain income requirements. It may be a good option if you’d like to buy a house in a rural area, have a low or modest income, and aren’t eligible for a conventional loan. If you go this route, you may not have to put any money down and you may be able to secure a low interest rate.

Keep these waiting requirements in mind if you’re interested in getting a USDA mortgage after bankruptcy:

  • Chapter 7: Three years from your discharge date
  • Chapter 11: No waiting period
  • Chapter 13: One year from your discharge date

Kentucky VA Loans

If you’re a veteran or currently serving in the military, you may be eligible for a Department of Veterans Affairs (VA) loan. A VA loan doesn’t require a down payment or charge private mortgage insurance and can give you the chance to lock in a low interest rate. If you pursue a VA loan, however, you’ll have to pay a funding fee, which will be a percentage of your home price.

Here are the waiting requirements you should be aware of if you’d like to get a VA loan after bankruptcy:

  • Chapter 7: Two years from your discharge date
  • Chapter 11: No waiting period
  • Chapter 13: One year from your discharge date

Kentucky Conventional Loans

Since conventional loans are not guaranteed or insured by government agencies, you can expect stricter requirements, such as having a good credit score, if you apply for one. If you get a conventional loan and put down less than 20% of the cost of your new home, you’ll need to pay private mortgage insurance.

The waiting requirements for taking out a conventional loan after bankruptcy are as follows:

  • Chapter 7: Four years from your discharge date
  • Chapter 11: Four years from your discharge date
  • Chapter 13: Two years from your discharge date or four years from your dismissal date
Bankruptcy Guidelines for Kentucky FHA, VA, USDA, and Fannie Mae Mortgage Loans

Chapter 7 Bankruptcy

A four-year waiting period is required, measured from the discharge or dismissal date of the bankruptcy action until the application date.

Chapter 13 Bankruptcy
two years from the discharge date to the application date, or four years from the dismissal date to the application date.

The shorter waiting period based on the discharge date recognizes that borrowers have already met a portion of the waiting period within the time needed for the successful completion of a Chapter 13 plan and subsequent discharge.

A borrower who was unable to complete the Chapter 13 plan and received a dismissal will be held to a four-year waiting period.


Exceptions for Extenuating Circumstances

A two-year waiting period is permitted after a Chapter 13 dismissal, if extenuating circumstances can be documented. There are no exceptions permitted to the two-year waiting period after a Chapter 13 discharge.

Foreclosure / Short Sale

A seven-year waiting period is required. In all instances, the “date of foreclosure” is considered the date of the foreclosure deed. The end date of the waiting period is the application date.

Foreclosure / Short Sale – Extenuating Circumstance A three-year waiting period is permitted if extenuating circumstances can be documented. Additional requirements apply between three and seven years, which include:

FHA Loan Guidelines for Bankruptcy and Foreclosure 

Chapter 7

Chapter 7 bankruptcy discharged more than 24 months prior to the application date may be allowed.

Chapter 7 bankruptcy discharged between 12 and 24 months prior to the application date requires satisfactorily established credit and documentation showing the circumstances which caused the bankruptcy were beyond the borrower’s control (i.e. unemployment, medical bills not covered by insurance). In these instances, the file must be manually downgraded to a refer and manually underwritten. It falls upon the underwriter to make a final determination as to the overall quality of the file.

Chapter 7 bankruptcy discharged less than 12 months prior to the application date is not allowed.

Chapter 13 

Loans where the borrower is currently in a Chapter 13 bankruptcy or had a Chapter 13 bankruptcy which was discharged within the previous 2 years require manual downgrade and must be underwritten manually. Note that manual underwrites require Underwriting Management approval.

A borrower who is currently in a Chapter 13 bankruptcy may be eligible for FHA financing provided all of the following conditions are met in addition to standard manual underwriting requirements:


Foreclosure / Short Sale

A foreclosure less than 3 years ago is not allowed.

In all instances, the “date of foreclosure” is considered the date of the foreclosure deed. The end date of the time frame is determined by the application date.


Kentucky VA Loan Guidelines for Bankruptcy and Foreclosure

Chapter 7

Chapter 7 bankruptcy discharged more than 24 months prior to application date may be disregarded.

Chapter 7 bankruptcy discharged between 12 and 24 months prior to application date requires satisfactorily established credit and documentation showing the circumstances which caused the bankruptcy were beyond the borrower’s control (i.e. unemployment, medical bills not covered by insurance). In these instances, the file must be manually downgraded to a refer and manually underwritten. It falls upon the underwriter to make a final determination as to the overall quality of the file.

Chapter 7 bankruptcy discharged less than 12 months prior to application date is not allowed.

Note that for High Balance Transactions a minimum of 7 years must have elapsed since the discharge date regardless of AUS findings.

Chapter 13

The borrower’s credit history since the bankruptcy, the circumstances behind the bankruptcy, and the discharge date all factor in to the final determination by the underwriter.

A borrower who is currently in a Chapter 13 bankruptcy may be eligible for VA financing

Foreclosure / Short Sale

Foreclosure more than 36 months prior to application date may be disregarded.

Foreclosure less than 36 months prior to application date is not allowed.

Note that for High Balance Transactions a minimum of 7 years must have elapsed since the foreclosure date regardless of AUS findings.

In all instances, the “date of foreclosure” is considered the date of the foreclosure deed.

USDA Guidelines for Bankruptcy and Foreclosure 

Chapter 7

The Discharge date and GUS findings both play an important role in determining the viability and future repayment of the new loan. As such, Chapter 7 bankruptcy seasoning is evaluated by GUS.

Chapter 13

Loans where the borrower is currently in a Chapter 13 bankruptcy or had a Chapter 13 bankruptcy which was discharged within the previous 3 years require a manual downgrade and must be underwritten manually.

A borrower who is currently in a Chapter 13 bankruptcy may be eligible for RD financing provided all of the following conditions are met in addition to standard manual underwriting requirements:

• At least 12 months of payments have been made satisfactorily

• The Trustee or bankruptcy judge’s approval to enter into the mortgage transaction is documented

• Bankruptcy payments are included in the borrower’s debt ratio


Foreclosure / Short Sale

The foreclosure date and GUS findings both play an important role in determining the viability and future repayment of the new loan. As such, foreclosure seasoning is evaluated by GUS.

A foreclosure does not automatically disqualify a borrower from RD financing. In all instances, the “date of foreclosure” is considered the date of the foreclosure deed.

You can obtain a copy of your bankruptcy paperwork from the website below:

Bankruptcy Courts http://www.pacer.psc.uscourts.gov/

Joel Lobb (NMLS#57916)
Senior Loan Office

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708

kentuckyloan@gmail.com

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/

— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.Posted by Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA  Email ThisBlogThis!Share to TwitterShare to FacebookShare to PinterestLabels: 100% Financing, bad credit, bankruptcy, fico scores first time home buyer, foreclosure, Kentucky First Time Home buyer zero down payment