Partners > Lender Resources > Ask Krista

​​​​​​​​​​​Ask Krista  

Do you have a mortgage loan question for KHC? 

Ask KHC's Mortgage Production Administrator ​Krista McIver and she will get the answer for you! Krista's 25 years of mortgage lending experience includes over 10 years in underwriting with four of those years underwriting at KHC.

Check out our FAQs below and if needed, send your question by selecting "Ask a Question" below. Krista looks forward to hearing from you and answering your KHC mortgage loan questions! Remember, if you have a question that we've not already answered​, don't delay, simply Ask Krista today!​


Frequently Asked Questions (FAQs)

Q. Does KHC allow non-occupying coborrowers?
A. KHC does not allow non-occupying co-borrowers or co-signors.

 

Q. If a borrower's current primary residence has a KHC first and second mortgage, can they retain current property and still purchase a new primary if they qualify with both mortgages? The new loan will not be a KHC loan.
A. A property secured by a KHC first mortgage must be the borrower's primary residence for the life of the loan. If the property will no longer be the borrower's primary residence, the KHC first and the KHC second mortgage, if applicable, will need to be paid off. 

Q. Can a borrower own other real estate?
A. For a Secondary Market Program loan, borrower(s) may own other real estate property at closing, following insuring agency guidelines. The new property through KHC must be the borrower's primary residence.

For MRB or MCC loans, borrower(s) may not own other property at the time of closing.

Q. Does KHC allow interest credits?
A. KHC does not allow interest credits.​

Q. What Visas will KHC accept for financing for permanent residents?
A. KHC does not have an overlay for this. Follow agency guidelines per the loan type.
 

Q. Are KHC loans assumable? 
A. Conventional loans through KHC are not assumable.  All FHA, VA and RHS loans through KHC are assumable. Buyer must meet agency guidelines and KHC Secondary Market Program requirements.  DAP second mortgage loans are not assumable; DAP loans would have to be paid off.  f.

Q. Does KHC allow IRS payment plans?
A. KHC does not have an overlay regarding IRS payment plans. Follow agency guidelines per the loan type.

Q. Is a manual underwrite allowed on a KHC loan?
A. KHC allows a manual underwrite on government loans. Follow agency guidelines per the loan type, FHA loans should also follow the KHC-FHA Manual Underwrite Matrix.

 

Q. Does KHC require collections to be paid off if they are over a certain amount?
A. KHC does not have an overlay for this. Follow agency guidelines per the loan type.


Q. Does KHC allow a no credit score manual underwrite or allow a co-borrower with no score if the file receives an approve/eligible AUS finding?
A. KHC requires each borrower to meet the minimum credit score requirements. For a Government loan the minimum requirement is 620 and for a conventional loan the minimum requirement is 660.

 

Q. If a borrower has multiple charge-offs on their credit report will this make them ineligible for a KHC loan?
A. KHC does not have an overlay for charge-offs. Follow agency guidelines per the loan type.
 

Q. What is KHC's requirement for sourcing deposits?
A. KHC requires deposits over $500 to be sourced to determine if there is additional income that needs to be included in the compliance income calculation.

 

Q. Does KHC require 30 days or 60 days bank printout/statement?
A. Follow agency guidelines per the loan type. At minimum, KHC requires a one-month bank statement/printout for each account on the 1003, be reviewed for KHC compliance purposes. 

 

Q. Does KHC limit the amount of assets a borrower may have?
A. KHC does not have an overlay for maximum amount of assets a borrower may have. Follow agency guidelines per the loan type.

Note: when using MRB or MCC funds, imputed income from liquid asset reserves must be included in the KHC Income Calculator in PowerLender. Liquid assets include, but are not limited to, checking and savings accounts. Non-liquid account types, such as a retirement income account, are not required to be included in the calculation. The liquid asset reserve amount is entered into the calculator and 1% of the reserve amount is included in compliance income.


Q. Does KHC accept bank statements in a language other than English? Will KHC translate them?
A. Bank statements in another language are acceptable but will need to be translated before providing them to KHC. Translations must meet agency guidelines, per the loan type.


Q. Can a borrower receive cash back at closing?
A. Cash back at closing on a purchase transaction can not to exceed the amount the applicant(s) has put into the transaction, such as:

  • Earnest Money Deposit (EMD).
  • Any fees Paid Outside of Closing (POCs).
  • Home Inspection.
  • Termite Inspection.

Any amount over what the applicant has paid should be applied as a principal reduction, first to the DAP loan (if applicable), otherwise, to the first mortgage.

Q. If a contract sales price exceeds the KHC maximum sales price, can the borrower use their own funds to pay the difference?
A. A contract sales price higher than KHC's Secondary Market/MRB purchase price limit is not eligible for KHC financing.

 

Q. Does KHC require a Seller's Disclosure in the file?
A. KHC requires the Seller's Disclosure of Property Condition (KREC Form 402) on all purchase transactions, regardless of real estate agent involvement. This is due to the Kentucky Revised Statutes § 324.360, requiring sellers of single-family residential properties to make certain disclosures to a potential buyer. This law applies regardless of whether a licensed salesperson or broker is involved in the transaction. The form is not required for: residential purchases of new construction homes if a warranty is provided; sales of real estate at auction; or a court-supervised foreclosure.

 

Q. Is a manufactured home an eligible property type for a KHC loan?
A. Yes. Follow agency guidelines per the loan type. KHC requires an Affidavit of Conversion to Real Estate and a copy of the title, which can be completed on or before closing.

Q. Is a berm home an eligible property type for a KHC loan?
A. Yes. A berm home is an eligible property type. Follow agency guidelines per the loan type.

 

Q. Does KHC allow property inspection waivers on conventional loans?
A. No. KHC requires a full appraisal on each loan regardless of loan type.
 

Q. Does KHC allow escrows for incomplete items?
A. Yes. General requirements for escrows are:

  • Repairs that affect livability or safety must be completed and inspected prior to loan closing.

  • Delegated and Correspondent lender's DE Underwriter makes the determination if escrows should be allowed.

  • TPO lenders must email khcuw@kyhousing.org for approval of escrowing of repairs or incomplete items.

  • KHC will hold funds for TPO lenders, but Delegated and Correspondent lenders are responsible for holding escrow funds.

  • Weather related escrows – expiration dates are as follows:

    • November – April: Due by May 31

    • May – October: Due 30 days after closing.

  • If HUD REO, the repair escrow should be listed in the purchase contract.

    • Otherwise, KHC will need a contract addendum identifying who is responsible for the cost of repairs. 


Q. Does KHC require a termite inspection?
A. KHC follows insuring agency guidelines regarding termite inspections. If a termite/pest inspection is not performed, borrowers must sign the KHC Termite Waiver Certification Form. The waiver prints from the C-closing Stage forms in PowerLender.

If a termite report is done, either as borrower choice or if required for the loan type, such as a VA loan, KHC requires a copy of the report.

  • If termite report shows damage to main support beams of foundation, a structural damage review must be provided by a structural engineer.

  • Water in crawlspace or basement must be addressed.

  •  All infestation must be treated

    • KHC does not accept partial treatment.

    • Proof of treatment must be provided to KHC.​​


Q. Does KHC allow for eSign eligible documents (non-critical) to be signed days prior to the note and mortgage.
A. The Note and Mortgage are to be signed with “wet" signatures. The CD, Deed, Note and Mortgage should be executed on the same day. If this is considered a “mail away" for one of the borrowers to sign, it is understood those documents would be signed on a different day than the actual closing day. However, KHC needs to know the reservation number in question and the reasons for the hybrid closing prior to approving the request.


Q. I have a client considering a KHC first mortgage with a DAP loan. The spouse does not want to go on title. Is KHC okay with the spouse waiving spousal rights off title at closing?
A. The non-purchasing spouse does not have to be on title, but they are required to sign the mortgage and if appliable, the Tax-Exempt Finance Rider. ​


Q. Will KHC allow someone not on the loan and not on title to be on homeowners insurance policy?
A. No. KHC does not allow. 


Q. What is the maximum deductible allowed on homeowners insurance on a KHC loan?
A. Maximum deductible is equal to 5% of policy face amount, not to exceed $5,000.


Q. What is the amount of coverage required for homeowners' insurance on a KHC loan?
A. Amount of coverage must be equal to the loan amount.


Q. Does KHC have an overlay for student loan payments?
A. KHC does not have an overlay regarding student loan payments.  Follow agency guidelines per the loan type.

Q. What is KHC's policy for borrowers wanting to refinance? Are there rules or restrictions on refinancing those loans? Can the DPA be subordinated? 
A. KHC does allow the following refinances:

  • FHA

    • Streamline Non-Credit Qualifying and Credit-Qualifying Refinances

    • Simple Refinance

    • Rate/Term Refinance

  • RHS Streamlined-Assist Refinance

  • VA Interest Rate Reduction Loan (IRRL)

When refinancing a KHC loan with DPA, the DPA would need to be paid in full or refinanced into the new loan if going through another investor.  KHC will only subordinate a DPA loan when the first mortgage is coming back through KHC.  There are no pre-payment penalties to the borrower for paying off the first or second mortgage to KHC. 


Q. Can the Federal Home Loan Bank (FHLB) Welcome Home Funds be used with KHC financing? 
A. The FHLB Welcome Home Program grant funds are eligible to be used with KHC first and second mortgage financing.  KHC does not reserve the WHP grant funds for lenders.  Lenders must be eligible FHLB Members to reserve the grant funds with FHLB.  
 
Q. Can down payment assistance from a city government be used with the MRB Program?
A. KHC does not have an overlay for down payment assistance programs being used with MRB or Secondary Market first mortgage program funds.   Please follow agency guidelines per the loan type in determining if the down payment assistance is an eligible source of funds for the loan.  For KHC purposes, if KHC DPA is also being used, KHC DPA must remain in a 2nd lien position.  If the city's down payment assistance program is determined to be an eligible source of funds and will be used with KHC DPA, the city must be willing to take a 3rd lien position.


Q. Is a duplex or 3–4-unit property eligible for KHC financing if one of the units is owner occupied?
A.  No. KHC will accept a one-unit, single family dwelling, new or existing property located in Kentucky.
 
Q. Does KHC accept berm homes? 
A. KHC does not have an overlay for a berm home.  Follow agency guidelines per the loan type.
 
Q. Can KHC financing, including KHC DPA, be used if a borrower is purchasing a KHC REO property?
A. KHC DPA can be used with KHC government first mortgage loans to finance a KHC loan secured by a KHC REO subject property.  KHC DPA cannot be used with KHC conventional first mortgage loans when the subject property is KHC REO.
 
Q. How should a POA be reflected on closing documents?
A. KHC does not have an overlay for how the POA is reflected on the document, please follow agency guidelines per the loan type.
 
Q. Does KHC require the first and second mortgages to be on the title? 
A. The title commitment and the title policy reflect the first mortgage amount.

Q. Is a copy of the hazard insurance Notice of Transfer letter sent to the insurance company acceptable proof of transfer? 
A. KHC requires Correspondent and Delegated Lenders to endorse the hazard and/or flood insurance to Kentucky Housing at the time of purchase. An updated mortgagee clause will be a pre-purchase condition. A copy of the Notice of Transfer letter sent to the insurance company will no longer be accepted as proof of transfer. The reason for this change is that a high number of policies are not being updated by the insurance companies and the result is misplacement for forced insurance on our borrowers' loans.

KHC requires an updated certificate of insurance reflecting KHC's mortgage clause: Kentucky Housing Corporation, ISAOA, P.O. Box 4150, Frankfort, KY 40604-4150.

While the updated mortgagee clause is preferred prior to loan purchase, we understand some companies may hold that transfer until the loan is purchased. For that reason, KHC will not delay the loan purchase for this one condition but will move the condition to a post-purchase condition. The main point being a copy of the Notice of Transfer letter will not be accepted as proof of actual transfer.
 
Q. How do I sign up for emails from KHC regarding KHC updates, rates, program changes, etc.? 
A. Sign up for KHC eGrams by going to KHC's homepage https://www.kyhousing.org/Pages/default.aspx​, click the envelope on the bottom left corner, fill in the requested information, check the box for Lender eGrams, then click Subscribe. 


Q. For compliance income, do we have to use commission income if we don’t need it for qualifying and it hasn’t been received it for two years?
A. While the commission income is not being used in qualifying income, it needs to be included in compliance income. KHC Compliance Income will look at all possible income projected out over the next 12 months to determine if the borrowers qualify for KHC financing. If the borrower’s projected income is not within KHC Compliance Income Limits they would not qualify for a KHC Loan.

Q. A borrower currently has a second job but plans to quit the job in the next couple of months. Does the income need to be included in compliance income as if it will continue?
A. Yes. Unless the borrower has already left the job and a VOE is provided showing the employment end date, the income must be included in the compliance income calculation.
 
Q. Where can I find the KHC compliance income calculator?
A. The KHC Income calculator can be accessed from a reserved loan in PowerLender. 

Q. What is the best way to determine if a borrower with overtime and commission income will be within KHC income limits?
A. Use the KHC Income Calculator found in PowerLender to calculate compliance income.

Q. Is foster care income included in KHC Compliance Income?
A. No. Foster care income is not included in compliance income.

Q. If a borrower has applied for a KHC Secondary Market Program loan and the borrower will retain their current non-KHC financed residence and rent it, what portion of the rent should be included in the compliance income calculation?
A. For a KHC Secondary Market Program loan, use the amount of monthly rent received for the retained property minus the PITI from the retained property in the compliance income calculation. For MRB or MCC loans, rent income does not apply since borrowers may not own other property.

Q. If a borrower has a new part-time job and will be getting a raise next month, does the new income and the raise need to be included in compliance income?
A. Yes. All income the borrower is anticipated to receive in the next 12 months should be included in the compliance income calculation.

Q. Does KHC require a year-to-date profit and loss statement for a self-employed borrower?
A. Yes, KHC requires a YTD P&L that goes through the end of the prior quarter.  It does not need to be audited.  If a borrower is not sure how to prepare a P&L, they can use a schedule C as a guide to prepare it. 

Q. In addition to employment income, what other types of income should be included in the compliance income calculation?
A. Compliance income includes, but is not limited to, the following types of income:

  • Travel nurse per diem
  • VA Disability
  • Social Security
  • Social Security Disability
  • Child Support
  • Spousal Support
  • Any cash income consistently deposited in accounts
  • Vehicle Allowance on pay stubs
  • Any income the applicant, or on MRB/MCC loans any income the applicant and any non-borrowing occupant’s taking title, will receive in the upcoming 12 months from closing.


Q. Borrower has less than a two-year employment history with a one-month gap during that time. Is this something any of your programs would allow?
A. KHC does not have an overlay for job time. Follow agency guidelines per the loan type. 
 
Q. Borrower has received a car allowance for less than two years. This is needed for qualifying income. We have a letter that states she is going to continue to receive it. Can we use it for qualifying income? Either conventional or FHA?
A. KHC does not have an overlay regarding car allowance. Follow agency guidelines per the loan type. 

Q. Do you allow borrower to close before starting work if offer letter is provided?
A. Lenders must follow agency guidelines per the loan type in determining eligible employment and qualifying income for employment offers or contracts. The documentation provided for this income source must be satisfactory to complete the KHC income calculator. If sufficient information is provided in the offer letter or contract to complete the KHC income calculator, a paystub will not be needed. However, if sufficient information is not provided in the employment offer or contract, a paystub or other additional income documentation will be needed.​

Q. Is applicant income or household income used to determine if a loan is within KHC program income limits?
A. For Secondary Market Program loans, KHC requires applicant income to be used when determining if within KHC income limits.  For MRB and MCC program loans, household income is used to determine if within KHC income limits.  Household income includes borrowers on the loan and any non-borrowing occupants taking title.
 
Q. Will KHC accept a handwritten 1099 NEC?
A. KHC does not have an overlay for a handwritten 1099 NEC. Follow agency guidelines, per the loan type.​



Q. Is it possible to have a rate longer than 45 days?
A. KHC reservations are for 45 days. Extensions are allowed as shown below. Refer to KHC’s Reservation of Funds Policy and KHC’s Reservation Extension Policy in AllRegs.

  • 7 days for .125% fee
  • 15 days for .25% fee
  • Second 15 days for .25% fee
  • 30 days for .50% fee 

Any combination of the above as long as it does not exceed 37 days may be utilized.
  • If the reservation reaches the 37-day extension period, the borrower will have to go worse case pricing on the loan.
    • Worse case pricing is based on the higher of the original interest rate or market rate for 45 days.
    • Lender will still be responsible for extension fees incurred up to this point.
      • Extension fees can be passed on to borrower or lender can choose to not charge the borrower.
      • If extension fee is passed on to borrower a change of circumstance (COC) and loan estimate (LE) must be disclosed to the borrower.
  • For adjustments or changes to the reservation, email khcuw@kyhousing.org​.

Q. How do I make a change to a loan reservation?
A. Email khcuw@kyhousing.org with the changes. Upon completion of changes, KHC staff will notify you by email.

Q. Does KHC allow the 2/1 buydown option?
A. KHC does not offer a 2/1 buydown option. 
 
Q. Does KHC offer any type of rate buydown?
A. All rate-related questions should be directed to the khcuw@kyhousing.org​. Permanent rate buydown options are at KHC’s discretion.​

Q. Is KHC down payment assistance repayable?
A. Yes. KHC DAP is repayable at 3.75% fixed interest amortized over a 10-year term.
 

Q. Can a borrower combine their own funds with KHC DAP?
A. Yes. KHC allows borrowers to utilize other sources of down payment in addition to DAP funds provided the other sources meet agency guidelines per the loan type and KHC remains in a 2nd lien position.
 

Q. Are KHC DAP income limits the same as the first mortgage limits?
A. Yes. DAP income limits follow the program type income limits. If a borrower qualifies for a Secondary Market Program loan, use those limits. If a borrower qualifies for the MRB/MCC Program, then those are the limits.

Q. Does KHC allow DAP funds to be used for something other than down payment and closing costs, such as paying off debt for qualifying, paying UFMIP, etc.?
A. KHC DAP funds are for down payment and closing costs only.


Q. Can remaining funds from the DAP be used to reimburse for the cost of a structural inspection and sewer inspection that was paid outside of closing?

A. DAP funds can be used to reimburse a borrower for property related inspection costs paid outside of closing. A copy of the inspections must be included in the file and the inspection costs need to be reflected on the CD and shown as paid outside of closing as per applicable agency guidelines and TRID.

Q. Can a borrower pay off their down payment assistance early without a penalty.
A. Yes. A DAP loan may be paid off at any time without penalty.


Q. Does KHC require the DAP loan number to be shown on the Closing Protection Letter from title?
A. The DAP loan number is not required to be listed on the Closing Protection Letter.

Q. What is the KHC Mortgage Revenue Bond (MRB) Program?
A. The KHC MRB Program is funded through the issuance and sale of municipal bonds. This funding source allows KHC to offer below-market rates to lower-incomed households. KHC's program is limited to the state of Kentucky only. There are specific qualifications for the MRB Program, that can be found in AllRegs.

Q. Please advise if three years of tax returns are required for the MRB program.
A.KHC does not require three years tax returns. Review credit reports, fraud reports, and public records for due diligence in determining if a borrower meets the first-time homebuyer requirement, if applicable.

Q. Can the MRB Program be used with KHC DAP funds?
A. Yes. A borrower can use KHC's DAP with the MRB Program.

Q. Is a borrower limited on how much they retain in assets/reserves?
A. KHC does not have an overlay for the maximum amount of assets a borrower may have. Follow agency guidelines per the loan type.

Note: when using MRB funds, imputed income from liquid asset reserves must be included in the KHC Income Calculator in PowerLender. Liquid assets include, but are not limited to, checking and savings accounts. Non-liquid account types, such as a retirement income account, are not required to be included in the calculation. The liquid asset reserve amount is entered into the calculator and 1% of the reserve amount is included in compliance income.

Q. Whose income is included in MRB Household income?
A. Compliance/Maximum Household Income is based on the income of all borrowers and all non-borrowing occupants taking title to the property. The Non-Borrowing Occupant Certification- Form 98, must be completed by any non-borrowing occupant taking title to the property. 


Q. Is income from assets remaining after closing included in MRB compliance income?
A. Yes. Imputed income from liquid asset reserves must be included in the KHC Income Calculator in PowerLender. Liquid assets include, but are not limited to, checking and savings accounts. Non-liquid account types, such as a retirement income account, are not required to be included in the calculation. The liquid asset reserve amount is entered into the calculator and 1% of the reserve amount is included in compliance income.

 

Q. If a spouse is not taking title on an MRB transaction, do we still need to have the spouse fill out this form: KHC Non-Borrowing Occupant Form?
A. Only non-borrowing occupants taking title need to complete the KHC Non-Borrowing Occupant Form. A non-borrowing spouse not taking title will not need to complete the KHC Non-Borrowing Occupant Cert. However, the non-borrowing spouse will sign the mortgage.

​Q. We have a four-person household (two adults and two children) but only one person is going to be on title. Can we still use the three-to-four person MRB income limit for compliance?
A. Yes, use the 3-4 person MRB compliance income limit for compliance since the total number in the household is 4.


Q. If the household number is five does the income limit increase? If so, by how much.
A. The MRB household income limits are based on household sizes of a one- and two-person household or a three or more persons per household. The income limit does not increase if there are more than three persons.

Q. What if only one spouse is employed now but gets a job in the future. This would obviously put them above the 5% increase. Do they have to make more than the current income threshold to trigger the recapture.
A. Federal Recapture Tax may apply if a homeowner meets each of the following triggers:

·      Sells their home within the first nine years of homeownership; and
·      Has a net gain on the sale of their home; and
·      Household income exceeds allowable income limits as adjusted for each year of homeownership.

It is advised that borrower(s) speak with a tax professional regarding recapture tax questions. 

Q. Can the sale of a borrower's current home close prior to the KHC MRB financed closing or does it have to be sold at least one day in advance of this closing.
A. The sale of a current home can happen same day, but it must close before the subject property closing.

Q. A borrower owns a manufactured home that has not been converted to real estate. Can they retain it and still be eligible for MRB financing?
A. No. The manufactured home must be sold prior to closing.


Q. If the subject property is in a non-targeted area, is the first-time homebuyer requirement applicable to all occupants over 18?
A. For MRB loans where the subject property is in a non-targeted area, the FTHB requirement is applicable to all borrowers and any non-borrowing occupants taking title to the property.


Q. If we locked a rate with the MRB program, but for some reason the borrower did not qualify for MRB would we be able to switch the lock over to Secondary Market and keep the rate at the time of locking?
A. If a loan is originally locked as an MRB loan and then later changed to Secondary Market, the interest rate will be the Secondary Market interest rate as of the date of the original lock.

Q. If the borrower has a time share does that disqualify them from the MRB/MCC funds as a first-time homebuyer?
A. Ownership in a timeshare would not disqualify a borrower from being considered a first-time homebuyer.


Q. How can we find out how much MRB funds are left?
A. Lenders can see funds remaining for MRB and MCC programs by logging into PowerLender. The funds are shown on the PowerLender Dashboard.

 

Q. Does a borrower have to be a first-time homebuyer to be eligible for the MRB or the MCC programs?
A. A borrower purchasing in a targeted area may be a first-time or a repeat homebuyer. A borrower purchasing in a non-targeted area must be a first-time homebuyer (either never having owned a home or not have had an ownership interest in their principal residence in the last three years).

Q. For a second time homeowner, how do I find where targeted properties are located?
A. Targeted counties and targeted areas can be found on KHC's MRB/MCC Gross Annual Household Income Limits chart.

Q. What documents are required for the MRB Program?
A. The following documents are applicable to the MRB Program:

  • Mortgagor Certification – Required on all MRB loans
    • Prints with Reservation
    • Be sure that Box for Non-Borrowing Spouse is checked when applicable
    • Signed by all Borrowers and Non-Borrowing Spouse
  • Seller Certification – Required on all MRB loans
    • Prints with Reservation
    • Signed by Seller
    • Purchase Price must match
    • Borrower must move in within 60 days
  • Non-Borrowing Occupant Certification – Required on MRB loans with Non-Borrowing Occupants
    • Prints with Reservation and available on website and AllRegs
    • Completed for Non-Borrowing Occupants taking title to property
    • Must document income with VOE and Paystubs for Compliance Income Calculator
  • Child Support Certification – Only use when applicable
    • Certify that Borrower is not receiving the court ordered Child Support
    • Prints with Reservation and available on website and AllRegs
  • Acreage Waiver – Only use if subject property is over one acre
    • Used when there is over one acre of property to determine if the property can be subdivided and sold
    • Appraiser must include photographs with appraisal
    • Appraiser must indicate the likelihood of the property being subdivided in the appraisal
  • Factory-Made Home Waiver – Only use if borrower currently owns a manufactured home
    • This form is needed to determine if the Factory-Made Home would be considered real estate and if the borrower is considered a First Time Homebuyer
  • Tax-Exempt Financing Rider

Q. Does KHC have a CLTV overlay for the FHA-based program with the DAP on a purchase?
A. KHC does not have a CLTV overlay for the FHA-based program with the DAP.


Q. Will KHC allow an FHA HUD REO 203b with Repair Escrow?
A. KHC will allow if it meets agency guidelines.

Q. Will KHC allow an FHA Build on Own Land Transaction?
A. KHC would only do the permanent financing.


Q. FHA Build on Own Land Transaction. Home is 100% complete. For the end financing is it allowable to have the loan structured as a purchase and the CD appearing as a refinance transaction? If DAP is used, where should it be shown on the CD?
A. It is allowable for the FHA loan to be structured as a purchase and the CD appear as a refinance transaction. The DAP should show on page two of the CD.


Q. Does KHC allow the FHA $100 down payment program?
A. KHC does allow the FHA $100 down payment program.  Please follow agency guidelines.  

Q. Does a borrower need to have a bank account for an RHS manual underwrite?
A. Yes, a borrower must have a bank account on an RHS manual underwrite. They must provide two months most recent consecutive bank statements. Minimum reserve is one month mortgage payment. 

Reserves: Eligible
Lenders must use the lesser of the current balance or previous month's ending balance. 


Q. What debt ratios are acceptable for a manual underwrite on a USDA loan?
A. Follow USDA guidelines for maximum ratios on a manual underwrite. 

Q. Can a gift of equity be used as the down payment?
 A. KHC does not have overlays for this. Follow agency guidelines per the loan type.
 

Q. Does KHC require homebuyer education?
A. KHC does not have an overlay requiring home buyer education for our programs. Follow agency guidelines for each loan type in determining if home buyer education is required and in determining acceptability of the home buyer education course. 

 

Q. How do I sign up for eGrams?
A. Sign up for eGrams by going to our home page, kyhousing.org, scroll to the bottom and click the envelope on the bottom left corner; this will take you to the eGram signup page. Complete the form with your contact information, check the "Lender" box under Email Lists, then click "Subscribe."


Q. Where can I find KHC program guidelines?
A. KHC program guidelines can be found in the KHC Single Family Lending Library in AllRegs.

Q. How can I confirm if documents were uploaded to PowerLender?

A. Open the loan in PowerLender and click the paperclip in the top right corner. This will open a screen that shows what has been printed, uploaded, or created along with dates and who did the action.​


Q. Where is contact and address information found for servicing, customer service, payments, etc.? 
A. Contact and other servicing information for Current Homeowners (Loan Servicing) can be found on our website here: https://www.kyhousing.org/Homeownership/Current-Homeowners/Pages/default.aspx.

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For more information, please contact:

Kentucky Housing Corporation
1231 Louisville Road, Frankfort, KY 40601
502-564-7630; 800-633-8896 (KY only); TTY 711
Equal Housing Provider