Kentucky FHA Mortgage Loans 2025 | FHA Lender Requirements for First-Tim...

How to get approved for a Kentucky Mortgage Loan with Bad Credit

Kentucky mortgage loans after credit challenges: your options and next steps

If you’ve had late payments, collections, bankruptcy, or other setbacks, you’re not out of the game. Kentucky homebuyers routinely qualify using the right loan structure, realistic timelines, and clean documentation. Below is a practical breakdown of FHA, VA, USDA, Conventional, and KHC down payment assistance—plus smart internal and external resources.

Program overview

FHA loans in Kentucky

• Potential approvals down to 500 with at least 10% down or 10% equity on a refinance.
• 580+ score typically enables 3.5% down payment.
• Gift funds and DPA allowed; flexible underwriting for limited credit depth.

Internal: FHA options in Kentucky | External: HUD

VA loans in Kentucky

• No VA-imposed minimum score; many lenders look for ~620+.
• $0 down and no monthly mortgage insurance for eligible Veterans/servicemembers.
• Residual income and overall credit re-establishment matter.

Internal: Kentucky VA loan guide | External: VA.gov

USDA loans in Kentucky

• 100% financing for eligible rural properties and households within income limits.
• No hard USDA minimum score, but most lenders prefer 620–640+.
• Location eligibility, income, and household size rules apply.

Internal: Kentucky USDA overview | External: USDA

Conventional loans in Kentucky

• 620+ can allow 3–5% down; below ~660, many lenders require at least 5% down.
• Best fit for borrowers with re-established credit and stronger reserves.
• PMI may be cancellable as equity grows.

Internal: Conventional loan insights | External: CFPB

Kentucky Housing Corporation (KHC) down payment assistance

• Pairs with FHA, VA, USDA, or Conventional when eligibility criteria are met.
• Income limits, purchase price caps, and underwriting rules apply.
• Strong option for first-time buyers with limited funds.

Internal: KHC DPA options | External: Kentucky Housing Corporation

Infographics

Kentucky Mortgage Expert

Apply Now: Apply for pre-approval

Credit improvement guide: Credit-repair steps before applying

Closing cost guide: Closing costs in Kentucky

Contact

Email: kentuckyloan@gmail.com
Call/Text: (502) 905-3708
Website: www.mylouisvillekentuckymortgage.com

EVO Mortgage • 911 Barret Ave., Louisville, KY 40204

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Joel Lobb • Senior Loan Officer • Kentucky Mortgage Loan Expert

EVO Mortgage • Company NMLS #1738461 • Personal NMLS #57916

Equal Housing Lender

Disclosures: Program terms, eligibility, and pricing subject to change without notice. Not a commitment to lend. All loans subject to credit approval, acceptable collateral, and underwriting conditions. Geographic, income, and property restrictions may apply (including KHC/USDA). This content is for informational purposes only and not legal, financial, or tax advice. Verify current guidelines with your loan officer.

Kentucky FHA Mortgage Loans 2025 | FHA Lender Requirements for First-Time Buyers

Kentucky FHA Loan Requirements for 2025

To qualify for an FHA loan in Kentucky, you'll need to meet several requirements. Here's a detailed breakdown of what lenders will be looking for in 2025:

Credit Score Requirements

While the FHA itself doesn't set a minimum credit score, most Kentucky FHA lenders do. For 2025, you'll generally need a credit score of at least 580 to qualify for the 3.5% low down payment option. If your score is between 500 and 579, you may still be eligible, but you'll likely need to make a larger down payment of at least 10%.

It's important to note that different lenders may have varying credit score requirements, with some requiring scores of 620 or higher. Shopping around with multiple Kentucky FHA lenders can help you find one that works with your specific credit situation.

Down Payment Requirements

As mentioned, the minimum down payment for an FHA loan is 3.5% of the purchase price for borrowers with a credit score of 580 or higher. This down payment can come from several sources:

• Your personal savings
• A gift from a family member (with proper documentation)
• Down payment assistance programs available in Kentucky
• Funds from a retirement account (with restrictions)

Debt-to-Income (DTI) Ratio

Your DTI ratio is the percentage of your gross monthly income that goes towards paying your monthly debts. For FHA loans, your housing DTI (mortgage payment including principal, interest, taxes, insurance, and HOA fees) should ideally be no more than 31% of your income, and your total DTI (all debts) should be no more than 43%.

However, with a strong credit score and other compensating factors, you may be approved with a higher DTI, potentially up to 55% in some cases. Kentucky FHA lenders will evaluate your entire financial picture when making this determination.

Income and Employment Requirements

You'll need to demonstrate a steady employment history for the past two years. Your income must be verifiable through pay stubs, tax returns, and other documentation. Self-employed individuals will need to provide at least two years of tax returns to demonstrate consistent income.

Recent college graduates may be able to use their education to satisfy the employment history requirement if they can show their degree relates to their current employment.

Property Requirements

The home you're buying must be your primary residence - you cannot use an FHA loan for investment properties or vacation homes. The property also needs to meet the FHA's minimum property standards, which means it must be safe, sound, and secure. An FHA-approved appraiser will inspect the property to ensure it meets these standards.

Eligible property types in Kentucky include single-family homes, condominiums (in FHA-approved projects), townhomes, and multi-unit properties (up to 4 units) where you'll live in one of the units.

2025 FHA Loan Limits in Kentucky

For 2025, the FHA has set the following loan limits for all counties in Kentucky:

• Single-Family Home (1-unit): $524,225
• 2-Unit Property: $671,200
• 3-Unit Property: $811,275
• 4-Unit Property: $1,008,300

These limits apply to all 120 Kentucky counties, as there are no high-cost county exceptions in the state for 2025. This means whether you're buying in Jefferson County (Louisville), Fayette County (Lexington), or any rural Kentucky county, the same loan limits apply. It's important to note that these limits can change annually based on housing market conditions.

FHA Mortgage Insurance Premium (MIP)

FHA loans require two types of mortgage insurance premiums that protect the lender in case of default:

Upfront Mortgage Insurance Premium (UFMIP)

This is a one-time premium of 1.75% of the loan amount, which is typically financed into the loan rather than paid out of pocket at closing. For example, on a $200,000 loan, the UFMIP would be $3,500.

Annual Mortgage Insurance Premium (MIP)

This premium is paid monthly as part of your mortgage payment. The amount varies from 0.45% to 1.05% of the loan amount annually, depending on your loan term, loan-to-value ratio, and down payment. For most borrowers with the minimum 3.5% down payment, the annual MIP is 0.85% of the loan amount.

Unlike conventional loan PMI, FHA MIP typically cannot be removed unless you refinance to a conventional loan or pay down your loan balance to 78% of the original purchase price (and the loan is at least 5 years old).

How to Apply for a Kentucky FHA Loan

Applying for an FHA loan in Kentucky is a straightforward process when you work with an experienced Kentucky FHA mortgage lender. Here are the detailed steps you can expect:

Step 1: Get Pre-Approved

The first step is to get pre-approved with an FHA-approved lender. During pre-approval, the lender will review your credit, income, assets, and debts to determine how much you can borrow. This gives you a clear idea of your budget and shows sellers that you are a serious buyer in Kentucky's competitive housing market.

Step 2: Gather Required Documents

You will need to provide various financial documents, including:

• Recent pay stubs (typically last 30 days)
• Tax returns for the past 2 years
• Bank statements for the past 2-3 months
• Employment verification letter
• Valid government-issued identification
• Social Security card
• Documentation of any additional income sources

Step 3: Find a Home

Once you are pre-approved, you can start shopping for a home that meets your needs and the FHA's property requirements. Consider working with a real estate agent familiar with FHA loans and Kentucky's housing market to help you find suitable properties.

Step 4: Complete the Loan Application

After you have an accepted offer on a home, you will complete the full loan application with your Kentucky FHA lender. This includes providing updated documentation and any additional information requested by the underwriter.

Step 5: Home Appraisal and Inspection

The lender will order an FHA appraisal to ensure the home meets FHA property standards and is worth the purchase price. You may also want to get a separate home inspection for your own peace of mind.

Step 6: Final Underwriting and Approval

The underwriter will review all documentation and make a final decision on your loan. They may request additional documentation or clarification during this process.

Step 7: Closing

Once your loan is approved and all conditions are met, you will close on your new Kentucky home and get the keys!

Frequently Asked Questions (FAQs)

Can I get an FHA loan with a bankruptcy?

Yes, it is possible to get an FHA loan after a bankruptcy. Generally, you will need to wait at least two years after a Chapter 7 bankruptcy discharge and have re-established good credit. For a Chapter 13 bankruptcy, you may be able to qualify after making 12 on-time payments in your plan, with court approval.

Are FHA loans only for first-time homebuyers?

No, FHA loans are available to all qualified homebuyers, not just first-time buyers. They are a great option for anyone who can meet the eligibility requirements, including repeat buyers and those looking to refinance.

What is the difference between an FHA loan and a conventional loan?

The main differences include down payment requirements (3.5% vs typically 5-20%), credit score requirements (580 vs typically 620+), and mortgage insurance (MIP vs PMI). FHA loans are generally more accessible but require mortgage insurance for the life of the loan in most cases.

Can I use an FHA loan to buy a fixer-upper in Kentucky?

Yes, the FHA 203(k) renovation loan program allows you to finance both the purchase and renovation costs in a single loan. This can be a great option for buyers looking to purchase and improve a home in Kentucky.

How long does it take to close on an FHA loan in Kentucky?

Typically, FHA loans take 30-45 days to close from the time of application, though this can vary based on the lender, property type, and complexity of your financial situation.

Ready to Get Started with Your Kentucky FHA Loan?

Don't let another month go by without taking action toward homeownership. Kentucky's housing market is competitive, and having your financing in place gives you a significant advantage.

Get Pre-Approved Today

Our experienced Kentucky FHA mortgage specialists are ready to guide you through every step of the process.

Find the Right Kentucky FHA Mortgage Lender

Choosing the right lender is just as important as choosing the right loan. Look for a Kentucky FHA mortgage lender that is experienced with FHA loans and can guide you through the process smoothly. A good lender will:

• Answer your questions promptly and thoroughly
• Help you understand your options and loan terms
• Work with you to find a loan that fits your financial situation
• Provide competitive rates and fees
• Have experience with Kentucky's local housing market
• Offer excellent customer service throughout the process

Kentucky Housing Market Insights for 2025

Understanding Kentucky's housing market can help you make informed decisions about your FHA loan. As of 2025, Kentucky continues to offer relatively affordable housing compared to national averages, making it an attractive state for first-time homebuyers using FHA loans.

Major Kentucky cities like Louisville, Lexington, Bowling Green, and Owensboro each offer unique opportunities for FHA loan borrowers. Rural areas of Kentucky also present excellent value propositions for families looking to maximize their purchasing power with an FHA loan.

Additional Resources for Kentucky Homebuyers

• Official FHA Loan Information from HUD
• Kentucky Housing Corporation
• Understanding Your Credit Score for a Mortgage
• First-Time Homebuyer Programs in Kentucky
• Kentucky Down Payment Assistance Programs

Conclusion

An FHA loan can be an excellent path to homeownership for Kentucky residents, offering flexible requirements, competitive rates, and low down payment options. Whether you're a first-time homebuyer in Louisville, a growing family in Lexington, or anyone in between looking to purchase a home in the Bluegrass State, an FHA loan might be the perfect solution for your needs.

The key to success is working with an experienced Kentucky FHA mortgage lender who understands both the FHA program requirements and the local Kentucky housing market. Take the first step today by getting pre-approved and discovering how much home you can afford with an FHA loan.

Ready to take the next step towards homeownership in Kentucky?

About the Author
Joel Lobb is a licensed Kentucky Mortgage Loan Officer (NMLS #57916) with more than 20 years of experience helping families across Kentucky achieve homeownership. Specializing in FHA, VA, USDA, and KHC loan programs, Joel has guided over 1,300 families through the mortgage process—including hundreds of borrowers with credit scores in the 580–620 range.

Licensing Information
• NMLS Personal ID: 57916
• Company NMLS ID: 1738461 (EVO Mortgage)
• Licensed to originate mortgage loans in Kentucky only
• Equal Housing Lender

Contact Information
Phone: (502) 905-3708
Email: kentuckyloan@gmail.com

Legal Disclaimers
This website is for educational purposes only and does not constitute financial or legal advice. Loan programs, rates, and requirements are subject to change without notice. Not all borrowers will qualify. This information is not endorsed or sponsored by FHA, VA, USDA, Fannie Mae, or any government agency.

Joel Lobb is licensed to originate mortgages in Kentucky only.

Equal Housing Lender. All rights reserved. Licensed by the Kentucky Department of Financial Institutions.

© 2025 Kentucky Mortgage Rates – Joel Lobb, NMLS #57916. All rights reserved.

6 Tips to Boost Your Credit Score for Kentucky Mortgage Loans (FHA, VA, USDA, KHC)

Credit Repair Tips for Kentucky Homebuyers

If you’re looking to buy a home in Kentucky, having a solid credit score is essential for qualifying for popular mortgage programs like FHA, VA, USDA, or KHC loans. Here are six actionable tips to improve your credit score and increase your chances of getting approved for your dream home loan.

1. Pay Your Monthly Bills on Time

Here are six tips for improving your credit score for a fresh financial start 

1. Pay Your Monthly Bills on Time
Paying monthly bills is a necessary chore that has a definite effect on your credit score. According to the FICO scoring model, your payments account for as much as 35 percent of your total score. Create reminders for due dates or establish a calendar for yourself to ensure you get everything paid on time.

2. Reduce Your Debts
Got credit card debt? Start paying it off now. Part of your credit score is based on the amount of available credit you have, known as your credit utilization ratio. So if you're carrying high balances, you'll want to lower them as soon as possible. Create a personal budget with a goal of reducing your spending so that it's lower than your income. Then, use any monthly surplus for your credit card debts until they're gone for good.

3. Limit Credit Inquiries
Looking for a new apartment? What about a mortgage? In either situation, try and group your applications together as much as possible. Applications for new lines of credit will generate a "hard pull" on your credit, and having too many of them in a short period of time can lower your score. However, credit reporting agencies usually consider a group of applications within a short period of time as one pull, as long as they're in the same category.

Similarly, limit yourself to opening up no more than one or two credit cards per year, which also generate hard pulls. Even if you get a ton of offers in the mail for stellar sign-up bonuses, they're likely to be offset by the damage to your credit. FICO reports that new credit and credit inquiries account for 10 percent of your total score.

4. Don't Cancel Old Cards
Have a card you don't use anymore? Don't close it. This can negatively affect your score as it lowers your amount of available credit. Instead, use it about once per month and don't forget to pay the bills in full, and on time.

5. Request Credit Limit Increase
If you only have one card and you're constantly approaching your spending limit, call the bank and ask for an increase in your credit line. This will raise the amount of available credit, which will eventually improve your score.

6. Take Care of Late Payments Before They Hit Your Score
If you do happen to miss a payment, contact the card issuer immediately. If you have good history built up, the company may agree to not report your late payment. Even if you can't avoid a late-payment fee, be sure to get your account up to date as soon as possible so you can limit the damage.
Your credit score is yours to own. It reflects your financial history and helps lenders predict how you will manage your finances in the future. Due to the lingering effects of credit, you don't want to waste any time to improve your credit.

Credit Repair Tips for Kentucky Homebuyers

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Frequently Asked Questions (FAQs)

Can I buy a house in Kentucky with a 580 credit score?

Yes. With a 580 score, you may qualify for an FHA loan in Kentucky with just 3.5% down. If your score is below 580, some lenders may still approve you with a 10% down payment. VA and USDA loans may also work with flexible credit guidelines, but additional documentation or manual underwriting may be required.

How long after bankruptcy can I get a mortgage in Kentucky?

• Chapter 7 Bankruptcy: Generally, you must wait 2 years from discharge for FHA and VA loans, and 3 years for USDA.

• Chapter 13 Bankruptcy: Borrowers may qualify after 12 months of on-time payments with court approval. Conventional loans require a longer waiting period.

What credit score do I need for a USDA loan in Kentucky?

Most lenders look for a 640 minimum credit score for USDA automatic approval through the Guaranteed Underwriting System (GUS). Lower scores may still be approved with manual underwriting, but stronger compensating factors (like low debt-to-income ratios or extra savings) are often required.

What credit score is needed for a VA loan in Kentucky?

The VA itself does not set a minimum score. However, many lenders in Kentucky require 580–620 or higher. Since VA loans are more flexible, they are often a good option for veterans or active-duty service members with less-than-perfect credit.

Does Kentucky Housing Corporation (KHC) require good credit?

KHC offers down payment assistance programs tied to FHA, VA, USDA, or Conventional loans. In most cases, a minimum 640 score is required for KHC’s down payment assistance options, although individual loan program requirements still apply.

How long does it take to repair credit enough to buy a house?

It depends on your starting point. For some borrowers, 3–6 months of consistent on-time payments and reduced balances can move the needle significantly. For others with major derogatory items (like collections or bankruptcy), it may take longer. Working with a mortgage professional early can help you build a timeline and strategy.

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Credit Repair Tips for Kentucky Homebuyers

Buying a home in Kentucky can feel out of reach if your credit isn’t where it needs to be. Whether you’re looking at FHA, VA, USDA, or Kentucky Housing Corporation (KHC) loans, your credit score is a key factor in approval and interest rate. The good news? You can take action today to improve your score and position yourself for homeownership.

Here are six proven strategies to repair and strengthen your credit.

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1. Pay Your Bills on Time

Payment history accounts for about 35% of your FICO score. Even a single late payment can have lasting consequences. Setting up autopay, digital reminders, or a simple calendar system will keep you consistent.

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2. Reduce Credit Card and Loan Balances

High balances relative to your credit limit increase your credit utilization ratio—a major factor in your score. Aim to bring balances below 30%, or ideally under 10%, for the strongest results. Build a monthly budget that prioritizes paying down debt before discretionary spending.

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3. Limit New Credit Inquiries

Each time you apply for new credit, a hard inquiry is added to your report. Too many inquiries in a short time frame can drop your score. If you’re shopping for a mortgage, group applications within 30–45 days to minimize the impact. Limit opening new credit cards unless absolutely necessary.

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4. Keep Old Credit Cards Open

Closing old accounts reduces available credit and shortens your credit history. Both lower your score. Keep older accounts active by making a small monthly purchase and paying it off in full to maintain positive history.

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5. Request a Credit Limit Increase

If you regularly use most of your available credit, request a limit increase. This lowers your utilization ratio, which can improve your score. Be cautious: this only helps if you avoid increasing your spending along with the new limit.

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6. Address Late Payments Immediately

Missed a payment? Contact your creditor right away. Some lenders will work with you and avoid reporting it if your history is otherwise strong. Even if a late fee applies, catching up quickly reduces long-term damage.

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How Long Does Bad Credit Stay on Your Report?

• Late payments, charge-offs, and collections: 7 years

• Chapter 7 bankruptcy: 10 years

• Chapter 13 bankruptcy: 7 years

• Foreclosure: 7 years

While negative marks remain for years, their impact lessens over time as you add new, positive credit history.

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Next Steps for Kentucky Homebuyers

Your credit score is important—but it’s not permanent. By taking steps now, you can improve your financial position and qualify for programs like FHA loans with credit scores as low as 580, VA loans with flexible guidelines, USDA zero-down financing, and KHC down payment assistance programs.

If you’re ready to explore your options and take the next step toward homeownership in Kentucky, I can help you map out a personalized path.

• 📧 Email: kentuckyloan@gmail.com

• 📞 Call/Text: 502-905-3708

Joel Lobb
Mortgage Loan Officer – EVO Mortgage
Expert on Kentucky Mortgage Loans

🌐 Website: www.mylouisvillekentuckymortgage.com
🏢 Address: 911 Barret Ave., Louisville, KY 40204

EVO Mortgage – Company NMLS #1738461
Joel Lobb – Personal NMLS #57916

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Disclaimer: The views and opinions expressed are for informational purposes only and do not guarantee loan approval or represent full underwriting guidelines. This is not a government agency. Loan programs may not be available to all borrowers. Visit www.nmlsconsumeraccess.org for more information.

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans

 Website: www.mylouisvillekentuckymortgage.com
 Address: 911 Barret Ave., Louisville, KY 40204

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Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.

Down Payment Assistance Kentucky 2025 Kentucky Housing Corporation KHC up to $10,000

Kentucky First-Time Homebuyers – Down Payment Assistance Available

Ready to buy your first home in Kentucky?

As a trusted Kentucky mortgage broker, I’ve helped over 1,300 families secure affordable financing with FHA, VA, USDA, KHC, and Conventional loans—often with no money down and same-day pre-approvals.

The Kentucky Housing Corporation (KHC) offers up to $10,000 in down payment assistance in 2025. This can make the difference between renting and owning your own home.

Based in Louisville and proudly serving buyers in every corner of Kentucky.

Apply Now or Learn More:
🌐 www.mylouisvillekentuckymortgage.com
📧 kentuckyloan@gmail.com
📱 Call/Text: (502) 905-3708

—
Joel Lobb – Senior Loan Officer
EVO Mortgage
911 Barret Ave., Louisville, KY 40204
Company NMLS ID: 1738461
Personal NMLS ID: 57916
Licensed Kentucky Mortgage Specialist
—

Let’s make your dream of homeownership a reality—reach out today for your free consultation and same-day pre-approval.

“The right loan, the right advice, and the right results—right here in Kentucky.”

4 Things Every Borrower Needs to Know to Get Approved for a Mortgage Loan In Kentucky

Thank you for visiting. I hope you find this website both informative and empowering as you explore your Kentucky mortgage options. My goal is to help you feel confident in selecting the right home loan for your unique situation.

I proudly serve all 120 counties in Kentucky, offering a full range of mortgage loan programs, including:

• FHA Loans

• VA Loans

• USDA Rural Housing Loans

• Fannie Mae Conventional Loans

• KHC Down Payment Assistance Programs

With over 20 years of lending experience, I’ve had the privilege of helping more than 1,300 Kentucky families achieve their homeownership goals. Whether you're a first-time homebuyer or seeking a second opinion, I’m here to offer honest, no-pressure advice—always free of charge.

I am dedicated to:

• Attending as many closings as possible

• Providing responsive, personalized service

• Ensuring quick, efficient, and accurate loan processing

• Making myself accessible every step of the way

I've been consistently recognized as a top mortgage loan officer in Kentucky for VA, FHA, USDA, and KHC programs. I take pride in being thorough, transparent, and attentive with each and every client.

Please take a moment to read my reviews below. If you have questions or need guidance, feel free to call or text me directly.

Chasity Wray

I would 100% recommend Joel & Dawn! They helped make a goal for my family a reality. From start to finish they helped me every step of the way. I will forever be thankful for them. Day or night, any worry or thought I had I never had to wait for a response, they really kept me sane during the stresses of being a first time buyer. I found Joel on YouTube when I was doing research before I decided to start the process of buying, turned out he was actually right here in Kentucky and so it was meant for me to go with them! Thank you both for everything, The Wray Family! 

Cee Bell

10 reviews

Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn't expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS

2 reviews


We were afraid we wouldn’t get approved for a loan because we didn’t have the best credit scores. But with Joel’s help he got us approved for a FHA. We closed on our home about 2 weeks ago! Joel was quick at responding to any of our questions and concerns. He was polite and professional when it came to our needs. We couldn’t have done this without Joel! THANKS AGAIN

Beth Ratliff

5  reviews • 

Absolutely the best experience buying my home. Everyone else turned me away. I done a google search for lenders and found Joel, and he gave me a chance. I faced a lot of personal road blocks during this process but he stuck it out with me. I was guided on what needed to be done and trusted his guidance wholeheartedly. We finally made it to the end and I worked with a lady named Dawn. She as well seen road blocks I encountered but stuck it out with me also. I emailed them with more questions than I should have, and they probably wished I didn’t send so many haha but they never failed to respond. If anyone can take owning a home from a dream to a reality, it’s Joel and his team!

Oggie Hall

5 reviews •

Mr. Joel Lobb was an important part of why we had a successful and very pleasant experience in purchasing our new home, he was very professional and knowledgeable in the process . He explained what we was to expect and was there for us as new home buyers in our corner every day and night I would recommend him to anyone and everyone he is a must have in your home buying journey.

Brandon Crook
3 reviews 

Thank god for this man. He is amazing. He Helped me from start to finish. When I first started looking for a house I knew nothing about the process or what it took to purchase a home. He broke everything down from start to finish. Helped me to get get my credit in order. Very professional and knowledgeable gentleman. If you are a first time home buyer or this is your 10th home. This is the man you need to see ASAP! I greatly appreciate everything he has done for my family. We love our new home! I can’t thank him enough! 10 stars!!!

The 4 things below underwrites review for a Mortgage Loan Approval 
⬇️

1. Income

You need income. You need to be able to afford the home. But what is acceptable income? Let’s just say that there are two ratios mortgage underwriters look at to qualify you for mortgage payment:

First Ratio – The first ratio, top ratio or housing ratio. Basically, that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment. The housing payment consists of Principle, Interest, Taxes and Insurance. 

Whether you escrow or not every one of these items are factored into your ratio. There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.

Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has. So, it includes housing payment as well as every other debt that a borrower may have. 

This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony…. basically any consistent outgoing debt that you’re paying on. Again, if you’re paying less than 45% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe. You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.

What qualifies as income? 

Basically, it’s income that has at least a proven, two-year history of being received and pretty high assurances that the income is likely to continue for at least three years. What’s not acceptable? Unverifiable cash income, short term income and income that’s not likely to continue like unemployment income, student loan aid, VA education benefits, or short-term disability are not allowed for a mortgage loan.

2. Assets

What the mortgage underwriter is looking for here is how much can you put down and secondly, how much will you have in reserves after the loan is made to help offset any financial emergencies in the future.

Do you have enough assets to put the money forth to qualify for the down payment that the particular program asks for? 

The only 100% financing or no money down loans still available in Kentucky for home buyers are available through USDA, VA, and KHC or Kentucky Housing Loans. Most other home buyers that don't qualify for the no money down home loans mentioned above, will turn to the FHA program. 

FHA loans currently requires a 3.5% down payment and Fannie Mae, or Conventional loans require a 3% to 5% down payment. The more you put down, the better your rate and terms usually and your chances of qualifying.

Kentucky Home buyers that have access to putting down at least 5% or more, will usually turn to Fannie Mae or Freddie Mac mortgage programs so they can get better pricing when it comes to mortgage insurance.

These assets need to be validated through bank accounts, 401k or retirements account and sometimes gifts from relatives or employer. Can you borrow the down payment? Sometimes.

 Generally, if you’re borrowing a secured loan against a secured asset you can use that. But rarely can cash be used as an asset. 

FHA will allow for gifts from relatives for down payments with little as 3.5% down but Fannie Mae will require a 20% down payment when a gift is being used for the down payment on the home.

The down payment scenarios listed above are for Kentucky Primary Residences only. There are stricter down payment requirements for investment homes made in Kentucky.

3. Credit

580 to 620 is the bottom score (again with few exceptions) that lenders will permit. Below a 620, then you have to look at doing a FHA loan or VA loan if you are a veteran. Even at 620, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan. 720 is when you really start to get in the “as a lender we love you” credit score. 760 is even better.

 Watch your credit scores carefully. You have three credit scores, and the lender will take your middle score. For example, let's say you have a 590 on Transunion, 679 on Experian, and a 618 on Equifax. Then your middle qualifying credit score will be 618 credits score.

If you absolutely cannot get your credit scores up to 620, then FHA will be a good option for you. FHA states that if your fico credit score is 580 or above, they will allow for a 3.5% down payment, and if below 580, you will need 10% down payment.

There are a lot of mortgage lenders that will not go below 580 to 620 range, so keep that in mind when you are shopping for a mortgage lender, because they create credit overlays.

Kentucky FHA Mortgage Loans currently requires 3 years removal from a foreclosure or short sale and 2 years on a bankruptcy with good reestablished credit.

Kentucky Fannie Mae Mortgage Loans currently requires 4 years removal from a bankruptcy, and 7 years on a foreclosure.

Kentucky VA Mortgage Loans currently requires 2 years removal from a bankruptcy or foreclosure with good, reestablished credit.

Kentucky USDA loans require 3 years removal from bankruptcy and foreclosure with good re established credit.

Which credit score is used to qualify for a Mortgage loan in Kentucky?

4. Appraisal

Generally, there’s nothing you can do to affect this. Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?” If not, then not good things start to happen. Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing. The big issue comes in refinancing. In purchase transactions, the value is determined as the


Lower of the value or the contract price!!!


That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000. Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000. Big issues….Talk to your loan officer.



For each one of these boxes, there are over 1,000 things that can effect if a borrower has reached the threshold to complete that box. Soo…..talk to a great loan officer. There are so many loan officers that don’t know what they’re doing. But, conversely, there’s a lot of great ones as well. Your loan is so important! Get a great lender so that you know, for sure, that the loan you want, can be closed on!

5 Most Popular Kentucky Home Loan Programs below:⬇️

Conventional Loan

• At least 3%-5% down

• Closing costs will vary on which rate you choose and the lender. Typically the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.

Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.

The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home.

Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.

KENTUCKY FANNIE MAE LOAN LIMITS IN 2025 FOR CONVENTIONAL MORTGAGE LOANS

The FHFA determines the conforming loan limit each year, basing it on the average U.S. home value over the past four quarters.

Kentucky USDA Rural Housing Program

If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.

Fico scores ****.usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.

They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.

They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area.

A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern Kentucky .

There is a map link below to see the qualifying areas.

Income Limits for: Most Locations

New Kentucky USDA Rural Housing  Income limits for most counties in 2024 (*) in Kentucky are $112,450 for a household family of four and household families of five or more  can make up to $148,450 with the new changes for 

2025 Kentucky USDA Income limits, 

2025 Kentucky USDA Rural Housing Income Limits by County Type

🏠 Standard Kentucky Counties

USDA Rural Housing Loan Limits 2025:

$119,850

1–4 Person Household Income Limit

$158,250

5–8 Person Household Income Limit

🏙️ Northern Kentucky Metro Counties

Higher USDA Income Limits 2025:

$128,600

1–4 Person Household Income Limit

$169,800

5–8 Person Household Income Limit

Kentucky USDA Rural Housing 2025 Higher Income Limits Apply To: Boone County, Campbell County, Gallatin County, and Kenton County (Cincinnati MSA counties qualify for increased USDA rural development loan limits)

USDA requires 3 years removed from bankruptcy and foreclosure.

There is no max USDA loan limit.

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Kentucky FHA Loan

FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment and will go down to a 580 credit score.

The current mortgage insurance requirements are kind of steep when compared to USDA, VA , but the rates are usually good so it can counteracts the high mi premiums.

As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.

The mi premiums are for life of loan like USDA.

FHA requires 2 years removed from bankruptcy and 3 years removed from foreclosure.

The new Kentucky FHA Mortgage Loan Limits for for FHA case numbers assigned on or after January 1, 2025:

Property Size	Low-Cost Area “Floor”	High-Cost Area “Ceiling”	Alaska, Hawaii, Guam, and U.S. Virgin Islands “Ceiling”1
One Unit	$524,225	$1,209,750	$1,814,625
Two Units	$671,200	$1,548,975	$2,323,450
Three Units	$811,275	$1,872,225	$2,808,325
Four Units	$1,008,300	$2,326,875	$3,490,300

Kentucky VA Loan

VA loans are for veterans and active duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2.3% for first time use, and 3.6% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.

VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit.

Most VA lenders I work with will want a 580 credit score even though on paper, VA says they don't have a minimum credit score.

VA requires 2 years removed from bankruptcy or foreclosure.

VA Loan Limits for 2025 in Kentucky

As announced previously by VA in Circular 26-19-30 (which provides interim guidance on implementing "The Blue Water Navy Vietnam Veterans Act of 2019") the conforming loan limit cap on guarantees was removed for Veterans with full entitlement. For Veterans who have previously used entitlement and the entitlement has not been restored, the maximum amount of guaranty entitlement available to the Veteran (for a loan above $144,000) is 25 percent of the conforming loan limit reduced by the amount of entitlement previously used (not restored) by the Veteran. 

As a reminder, Veterans are able to use their VA Home Loan Guaranty benefit regardless of loan amount, but in order to purchase homes with loan amounts above the conforming loan limits, Veterans with partial entitlement may be required to make a down payment on amounts in excess of the conforming loan limit. Regardless of full or partial entitlement, the VA guaranty plus any required down payment must total 25% of the loan amount.

Kentucky Down Payment Assistance

 KHC Loan (Kentucky Housing Loan with Down Payment Assistance)

 

The first no money-down home  loan program offered by Kentucky Housing and other lenders in the state of Kentucky currently offers up to $10,000 in down payment assistance (DAP) 

     

• Informational Flyer
  
• First-time homebuyers statewide in non-targeted areas​​
  
• First-time and repeat homebuyers statewide in targeted areas
  
• 30-year fixed interest rate
  
• Principal residence ONLY
  
• Purchase Price Limit: $544,232
  
• Borrower must meet KHC's MRB Income Limits
  

​​​​

​​​​​Secondary Market Funding Source

• First-time and repeat homebuyers statewide
  
• 30-year fixed interest rate
  
• Principal residence ONLY
  
• Purchase Price Limit:  $544,232​
  
• Borrower must meet KHC's Se​​condary Market Income Limits

  

    Need to be 2 years removed from a Chapter 7 Bankruptcy and 3 years removed from a foreclosure.

 

Kentucky First Time Home Buyer Common Questions and Answers below:👇

∘ What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?

Answer. Most lenders will wants a middle credit score of 620 to 640 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 620 to 640 middle score on their programs.


If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit score with at least 10% down payment, you will find it hard to get the loan approved because lenders will create overlays to protect their interest and maintain a good standing with FHA and HUD.


Another popular no money down loan is VA. Most VA lenders will want a 620 middle credit score but like FHA, VA on paper says they will go down to a 500 score, but good luck finding a lender for that scenario.


A lot of times if your scores are in the high 500’s or low 600’s range, we can do a rapid rescore and get your scores improved within 30 days.

∘ Does it costs anything to get pre-approved for a mortgage loan?

Answer: Most lenders will not charge you a fee to get pre-approved, but some lenders may want you to pay for the credit report fee upfront. Typically costs for a tri-merge credit report for a single borrower runs about $50 or less. Maybe higher if more borrowers are included on the loan application.

∘ How long does it take to get approved for a mortgage loan in Kentucky?

Answer: Typically if you have all your income and asset documents together and submit to the lender, they typically can get you a pre-approval through the Automated Underwriting Systems within 24 hours. They will review credit, income and assets and run it through the different AUS (Automated Underwriting Systems) for the template for your loan pre-approval. Fannie Mae uses DU, or Desktop Underwriting, FHA and VA also use DU, and USDA uses a automated system called GUS. GUS stands for the Guaranteed Underwriting System.


If you get an Automated Approval, loan officers will use this for your pre-approval. If you have a bad credit history, high debt to income ratios, or lack of down payment, the AUS will sometimes refer the loan to a manual underwrite, which could result in a longer turn time for your loan pre-approval answer

∘ Are there any special programs in Kentucky that help with down payment or no money down loans for KY First Time Home Buyers?

Answer: There are some programs available to KY First Time Home Buyers that offer zero down financing: KHC, USDA, VA, Fannie Mae Home Possible and HomePath, HUD $100 down and City Grants are all available to Kentucky First Time Home buyers if you qualify for them. Ask your loan officer about these programs

∘ When can I lock in my interest rate to protect it from going up when I buy my first home?

Answer: You typically can lock in your mortgage rate and protect it from going up once you have a home picked-out and under contract. You can usually lock in your mortgage rate for free for 90 days, and if you need more time, you can extend the lock in rate for a fee to the lender in case the home buying process is taking a longer time. The longer the term you lock the rate in the future, the higher the costs because the lender is taking a risk on rates in the future.


Interest rates are kind of like gas prices, they change daily

∘ How much money do I need to pay to close the loan?

Answer: Depending on which loan program you choose, the outlay to close the loan can vary. Typically you will need to budget for the following to buy a home: Good faith deposit, usually less than $500 which holds the home for you while you close the loan. You get this back at closing; Appraisal fee is required to be paid to lender before closing. 

Typical costs run around $500-$650 for an appraisal fee; home inspection fees. Even though the lender’s programs don’t require a home inspection, a lot of buyers do get one done. The costs for a home inspection runs around $300-$400. 

Lastly, termite report. They are very cheap, usually $50 or less, and VA requires one on their loan programs. FHA, KHC, USDA, Fannie Mae does not require a termite report, but most borrowers get one done.


There are also lender costs for title insurance, title exam, closing fee, and underwriting fees that will be incurred at closing too. You can negotiated the seller to pay for these fees in the contract, or sometimes the lender can pay for this with a lender credit. The lender has to issue a breakdown of the fees you will incur on your loan pre-approval.

How long is my pre-approval good for on a Kentucky Mortgage Loan?

Answer: Most lenders will honor your loan pre-approval for 120 days. After that, they will have to re-run your credit report and ask for updated pay stubs, bank statements, to make sure your credit quality and income and assets has not changed from the initial loan pre-approval.

How much money do I have to make to qualify for a mortgage loan in Kentucky?

Answer: The general rule for most FHA, VA, KHC, USDA and Fannie Mae loans is that we run your loan application through the Automated Underwriting systems, and it will tell us your max loan qualifying ratios.


There are two ratios that matter when you qualify for a mortgage loan. The front-end ratio, is the new house payment divided by your gross monthly income. The back-end ratio, is the new house payment added to your current monthly bills on the credit report, to include child support obligations and 401k loans.

Car insurance, cell phone bills, utilities bills does not factor into your qualifying rations.

If the loan gets a refer on the initial desktop underwriting findings, then most programs will default to a front end ratio of 31% and a back-end ratio of 43% for most government agency loans that get a refer. You then take the lowest payment to qualify based on the front-end and back-end ratio.

So for example, let’s say you make $3000 a month and you have $400 in monthly bills you pay on the credit report. What would be your maximum qualifying house payment for a new loan?

Take the $3000 x .43%= $1290 maximum back-end ratio house payment. So take the $1290-$400= $890 max house payment you qualify for on the back-end ratio.

Then take the $3000 x .31%=$930 maximum qualifying house payment on front-end ratio.

So now you know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.

10 mortgage facts will give you an advantage when shopping for a home loan in KY!👇

1. Mortgage Rates Change

Just like the stock market, mortgage rates change throughout the day. Mortgage rates you see today may not be available tomorrow. If you are in the market for a mortgage loan, be sure to check the current rates being offered by lenders. If you have already done your research and have found your dream home consider locking in your rate as soon as possible.



2. Different Lenders Charge Different Fees


Don’t expect every lender to charge the same fees for a mortgage loan. Every lender structures their fees differently, which is why it is important to shop with at least 3 lenders to compare. Next time you apply for a mortgage loan pay attention to the rates, points being charged and closing costs.



3. Lenders Can Sell Your Loan to Another Bank


Many borrowers have experience getting a mortgage loan with a certain lender only to find out that the loan has been sold to another bank. This occurs because lenders need to free up their liabilities in order to make room to give out more loans. This does not affect your mortgage whatsoever, but it’s important to pay close attention to your mortgage statement and any correspondence you receive in the mail to make sure you do not make payments to the wrong bank.



4. Your Middle Credit Score Matters



When you apply for a mortgage loan, the lender will pull your credit scores from three credit bureaus (Transunion, Equifax and Experian) to help them determined if you are credit worthy. Your middle score of the three is what lenders will use for loan qualification. However, the underwriter will review all three scores as part of the loan underwriting process. If you pull your own credit score through a website online, the credit scores displayed to you may be different than what lenders use because they use different reporting systems.



5. You Can Refinance Your Home Loan Anytime



You can refinance your mortgage anytime, but it doesn’t necessarily mean you should. Think about why you want to refinance. Is because you want to lower your monthly payments, to change the type of loan you are in or to take cash out from your equity? Whatever the reason is, make sure that it makes financial sense.


6. You Can Get a Mortgage Loan After a Foreclosure


Many homeowners have experienced a foreclosure after the recent mortgage crisis. There is good news for these borrowers because they can get a mortgage loan after foreclosure. There are waiting periods involved, for example, to apply for an FHA loan you must wait three years after foreclosure to apply. If you want to get a conventional loan the waiting period is seven years from foreclosure. For those seeking a VA loan, the waiting period is two-years.


There are exceptions to the waiting periods, but you have to show the lender that your foreclosure was caused by an event outside your control, such as losing your job or being seriously ill.


8. Good Credit Allows you to Get Better Mortgage Rates



Good credit scores mean a better rate in any type of loan, especially a mortgage loan. Your credit heavily impacts the type mortgage loan you will qualify for. To maintain a good credit report, make sure you monitored it closely. One of the advantages to good credit is that more banks will want to compete for your business, therefore giving you leverage to negotiate the closing costs.



9. Know Your Annual Percentage Rate (APR)


Knowing your APR will allow you see the true cost of your loan. While the interest rate shows the annual cost of your loan, the APR includes other fees such as origination points, admin fees, loan processing fees, underwriting fees, documentation fees, private mortgage insurance and escrow fees.


There may be more or less fees included in the ARP from what we mentioned. To be sure what fees are included in the APR, ask your lender to give you a breakdown of the closing costs included.


10. You Can Always Reduce Closing Costs


One way to reduce closing costs is to have the sellers contribute towards the closing costs when purchasing your home. This can be negotiated between the buyer and the sellers in the purchase contract. The amount the seller can contribute will depend on the type of loan. Another way to save on closing costs is to have the lender give you a credit to cover out of pocket loan costs.

I specialize in assisting Kentucky First-Time Homebuyers with mortgage loans, including FHA, VA, USDA & Rural Housing, KHC (Kentucky Housing Corporation), and Fannie Mae programs. With over 20 years of experience in the mortgage industry, I’ve helped more than 1,300 Kentucky families achieve their dream of homeownership or refinance their current mortgages to secure lower payments.

Whether you’re a first-time buyer or looking to refinance, I am here to guide you through every step of the process with personalized attention, expert advice, and the best loan options available to fit your unique needs.

Down Payment Assistance:
For Kentucky first-time homebuyers, we still have down payment assistance available through KHC programs. These funds can make a huge difference in reducing upfront costs and making homeownership more accessible.

Why Work With Me?

Local Expertise: I know the ins and outs of Kentucky’s housing market and loan programs.

Fast Approvals: I offer free mortgage applications with same-day approvals to keep the process moving quickly.

Customized Loan Solutions: Whether you’re buying a home or refinancing, I’ll find the right loan program to fit your needs.

Personalized Service: I treat every client like family, ensuring you’re supported and informed throughout the process.

About My Website
Visit my website for a wealth of resources tailored to Kentucky homebuyers. You’ll find:

Step-by-step guides for first-time homebuyers.

Information on loan programs like FHA, VA, USDA, and KHC.

Tools to help you calculate potential payments and affordability.

Blog posts with tips and updates on the Kentucky housing market.

A secure portal to start your loan application and upload documents.

Please Note: My website is not endorsed by the FHA, VA, USDA, or any government agency. It is an independent platform created to educate and assist homebuyers with expert advice and accessible tools.

 Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans

Licensing Info: Kentucky Mortgage Loan Only

NMLS Personal ID: 57916

Company NMLS ID: 1738461
www.nmlsconsumeracces.org
Equal Housing Lender

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NMLS 57916  | Company NMLS #173846

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
(www.nmlsconsumeraccess.org).

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