Why Become a KHC-Approved Lender?

The real question is, “Why not?” We offer:

Below-market interest rate financing.
Down payment and closing cost assistance.
All loan types: FHA, VA, RHS and conventional.
Low down payment requirements.
On-line reservation and loan tracking.
Closed loan funding and loan servicing.
Continued product development to meet the needs of home buyers.
Priority e-mail notification on status changes with your loan.
Lender and real estate agent training opportunities.
Home buyer education and credit counseling.
A variety of lender relationships to choose from.

When it comes to working with a partner to help meet the affordable housing needs of potential home buyers, you can count on Kentucky Housing Corporation to understand the obstacles and offer solutions.

KHC’s Lender Web Site

Some sections of KHC’s Web site are secured for approved lenders only, and require a user name and password. Usernames and passwords are provided to the lender when they are approved by KHC. The approved lender then has control over who in their company receives the user name and password.

The Lender Services section contains numerous options, including lender manuals, training dates, KHC staff members, income calculator, all manuals, reference materials and funding availability. Lender e-mail registry and Loan Connection service are available only to approved lenders.

Lender Requirements

All KHC lenders must:

Be a legally organized business entity that has maintained the proper license and office for the origination of single-family loans in Kentucky for at least one year;
Not be on any form of "watch list" or cease and desist order (to include parent company) at any time during its working relationship with KHC;
Provide their HUD-approved Mortgagee ID number, if they will be originating FHA-insured loans;
Provide their Veterans Administration (VA)-approved lender number, if they will be originating VA loans;
Provide their Rural Housing Services (RHS)-approval letter and lender number, if they will be originating RHS loans;
Provide a copy of the resolution from their board of directors authorizing them to execute KHC's agreements;
Have Internet access to obtain all details about KHC’s homeownership programs;
Complete KHC Form 1, “Request for KHC Password” to access KHC’s secured site for approved lenders.

Approved Lender Options
Lenders will be approved based on the option for which KHC determines they have the expertise and capacity to complete the required functions (see Appendix L for KHC workflow and lender’s functions).

Level I Lenders – Originate, process and close KHC loan products. (KHC performs underwriting for compliance and insuring agency if applicable).

Must provide and maintain audited financials evidencing a net worth in excess of $250,000;

Must provide and maintain evidence of $300,000 in errors and omissions coverage;

Must maintain quality control and management system(s) to evaluate and monitor the quality of loan production in accordance with insuring and guaranteeing agencies.

Must complete KHC’s Mortgage Loan Broker, Origination, or Purchase Agreement, Designation of FHA and VA underwriting (if applicable) and Attachment A;

Must provide KHC with audited financials within 90 days of lender fiscal year-end each year to maintain an approved status;

Must produce a minimum of 15 loans per calendar year from its main Kentucky office and additional five loans per branch offices.

Level II Lenders – originate and process KHC loan products. (KHC performs the underwriting and closing of the loans).

Must provide and maintain audited financials evidencing a net worth in excess of $63,000;

Must provide and maintain evidence of $300,000 in errors and omissions coverage or have a fidelity bond of at least $50,000;

Must maintain management system(s) to evaluate and monitor the quality of loan production;

Must complete Mortgage Loan Broker Agreement and Designation Agreement stipulating that KHC will report to the borrower and to the Internal Revenue Service the points paid at loan closing;

Must provide KHC with audited financials within 90 days of lender fiscal year-end each year to maintain an approved status;

Must produce a minimum of 15 loans per calendar year from its main Kentucky office and an additional 5 loans per year per branch offices.

Level III Lenders – Originate KHC loan products. (KHC performs processing, underwriting and closing of the loans).

Must provide and maintain audited financials evidencing a net worth in excess of $250,000;

Must provide and maintain evidence of $300,000 in errors and omissions coverage;

Must maintain management system(s) to evaluate and monitor the quality of loan production;

Must complete KHC’s Loan Origination Agreement, Designation Agreement stipulating that KHC will report to borrower and to the Internal Revenue Service the points paid at loan closing;

Must provide KHC with audited financials within 90 days of lender fiscal year-end each year to maintain an approved status;

Must produce a minimum of 10 loans per calendar year.

Lenders that do not meet the above requirements may originate KHC loans as a third party if they have entered an origination agreement acceptable to KHC with a KHC-approved main lender.

The KHC-approved main lender must state in writing that they will be responsible for the actions of the nonapproved lender in its origination of KHC loans. All reservations, loan submissions and closings must involve the KHC-approved main lender.

All loans must be released to KHC for servicing.

In addition to the above, all lenders must provide KHC with a list of their principal officers and their responsibilities; their most recent year-end financial statements certified by an independent certified public accountant; and a listing of Kentucky personnel who oversee origination, underwriting and shipping of final documents.

If the approved lender has a written agreement with another KHC-approved main lender to complete a portion of the loan transaction, KHC must receive a copy of the agreement. Upon KHC's review of the required documentation, the lender will be notified by KHC of its approval.

Lender's Basic Duties and Responsibilities

Subject to the required functions to be performed by the lender, the lender will be responsible for:

Taking the loan application and completing the loan transaction for each eligible applicant wishing to obtain permanent financing for the purchase of a home;
Communicating to each applicant the requirements of KHC's Single-Family Homeownership Program and the true status of their application;
Ensuring that each loan is approved by KHC and meets all the requirements of KHC and the insuring or guaranteeing agency;
Ensuring that each loan originated and closed is eligible for KHC-approved Private Mortgage Insurance, FHA insurance, VA or RHS guarantee;
Having adequate staff and facilities to originate, close and ship quality mortgage loans to KHC in a timely manner (as stated in lender agreements);
Ensuring staff is knowledgeable in all aspects of KHC's program requirements;
Protecting KHC against fraud, misrepresentation or negligence by any party involved in the loan transaction; and
Notifying KHC in writing of changes in address, contact persons, phone numbers and any major organizational changes such as resignation or replacement of any senior management personnel, mergers, change in ownership or corporate name, etc.