Kentucky VA Mortgage Lender Qualifying Criteria

 Information about Kentucky VA Loan Mortgage

Most Kentucky VA loans come with the added benefits of zero down payments, lower interest rates and no requirements for mortgage insurance. 

The VA sets these Kentucky mortgage conditions and guarantees a portion of the loan amount which is in lieu of a down payment from the Veteran. Financing for the property purchase is still provided by a lender in Kentucky that does VA loans

Kentucky VA Borrowers will still need to be approved by a qualified lender under Kentucky VA loan conditions in order to secure this type of mortgage.

Kentucky specific requirements for A VA Mortgage loans.

While these loans generally follow the same processing steps nationwide, the VA does set specific requirements for some areas. Standards around energy efficiency, insect inspections and environmental hazards can all vary from state to state and borrowers are obligated to meet these standards for an approved loan.

Frequently asked questions for Kentucky VA Mortgage Loans:

What do I need to apply for a Kentucky VA Loan?

The Veteran or Active Duty soldier must get a Certificate of Eligibility to prove they can participate in the VA home loan program . This does not guarantee loan approval, but does allow the borrower to participate in the VA home loan program in Kentucky. See link below on how to obtain your COE from VA

How is the interest determined on a Kentucky VA Mortgage Loan:

Mortgage rates change daily so whenever you go to apply for your VA loan, you can lock in your rate for a certain time period. This time period usually starts at 15 days and goes up to 90 day or some up to 180 days, but keep in mind, the longer you take out your loan lock, the higher the rate and costs of the VA loan. 

Your credit score, loan amount, property state and lender you choose will set the mortgage rate for you. It pays to shop around for the best rate. 

Mortgage terms are usually set on 30 year and 15 year terms. The shorter the term, the lower the rate on your loan. 

Is there mortgage insurance on Kentucky VA Mortgage Loans:

They're no monthly mortgage insurance premiums for VA Mortgage loans. However, there is upfront mortgage insurance, in the form of an upfront funding fee that gets added on top of the base loan. See below Funding Fee Schedule 

Review the VA funding fee rate charts on this page to determine the amount you’ll have to pay. Down payment and VA funding fee amounts are expressed as a percentage of total loan amount.

For example: Let’s say you’re using a VA-backed loan for the first time, and you’re buying a $200,000 home and paying a down payment of $10,000 (5% of the $200,000 loan). You’ll pay a VA funding fee of $2,850, or 1.5% of the $190,000 loan amount. The funding fee applies only to the loan amount, not the purchase price of the home.

VA-backed purchase and construction loans

Rates for Veterans, active-duty service members, and National Guard and Reserve members

If your down payment is…Your VA funding fee will be…
First useLess than 5%2.15%
5% or more1.5%
10% or more1.25%
After first useLess than 5%3.3%
5% or more1.5%
10% or more1.25%

Note: If you used a VA-backed or VA direct home loan to purchase only a manufactured home in the past, you’ll still pay the first-time funding fee.

VA-backed cash-out refinancing loans

Rates for Veterans, active-duty service members, and National Guard and Reserve members

First useAfter first use

Note: The VA funding fee rates for refinancing loans don’t change based on your down payment amount. If you used a VA-backed or VA direct home loan to purchase only a manufactured home in the past, you’ll still pay the first-time funding fee.

Native American Direct Loan (NADL)

Type of useVA funding fee

Note: The VA funding fee rate for this loan doesn’t change based on your down payment amount or whether you’ve used the VA home loan program in the past.

Other VA home loan types

Loan typeVA funding fee
Interest Rate Reduction Refinancing Loans (IRRRLs)0.5%
Manufactured home loans (not permanently affixed)1%
Loan assumptions0.5%
Vendee loan, for purchasing VA-acquired property2.25%

Note: The VA funding fee rates for these loans don’t change based on your down payment amount or whether you’ve used the VA home loan program in the past.

Can I avoid a Kentucky Mortgage VA funding fee?

Yes. However, in order to avoid paying a Kentucky VA funding fee, your service history will have to match up with one of these requirements:

You already receive VA disability income.

You're eligible for disability income but receive active-duty or retirement pay.

You have a memorandum that states you're eligible for disability pay, dated before your loan closing.

You're an active duty Purple Heart recipient.

You're the surviving spouse of a veteran who died as a result of their military service.

Who pays for Closing Costs on a Kentucky Mortgage Loan:

Who pays for which closing costs?

The seller must pay these closing costs (sometimes called seller’s concessions):

  • Commission for real estate professionals
  • Brokerage fee
  • Buyer broker fee
  • Termite report (unless you’re using a refinancing loan)

You (the buyer) or the seller can negotiate who will pay other closing costs such as these:

  • VA funding fee
  • Loan origination fee
  • Loan discount points or funds for temporary “buydowns”
  • Credit report and payment of any credit balances or judgments
  • VA appraisal fee
  • Hazard insurance and real estate taxes
  • State and local taxes
  • Title insurance
  • Recording fee

Note: We require that a seller can’t pay more than 4% of the total home loan in seller’s concessions. But this rule covers only some closing costs, including the VA funding fee. The rule doesn’t cover loan discount points.

    Does Kentucky offer VA loans to surviving spouses?
  • Yes. You'll need to meet a few additional requirements:

    You have not remarried.

    Your spouse was killed in service or from a service-related disability.

    Your spouse was missing in action or a prisoner of war for at least 90 days.

    Your spouse was rated disabled and was eligible for disability compensation at the time of death.

  • What are the types of VA loans that I can get in Kentucky?

  • Purchase loan
    Native American Direct Loan (NADL) program
    Interest Rate Reduction Refinance Loan (IRRRL)
    Cash-out refinance loan

  • What kind of credit score do I need for a VA Mortgage Loan Approval in Kentucky?
  • VA on paper has no minimum credit score requirement, however most Private VA lenders will require a minimum  credit score of 620 or higher  with some going down to 580 on an exception basis. We can do loans down to a 580 credit score just fyi 
     What is the most you can borrow on a VA home loan in Kentucky?

This will come down to your debt to income ratio. Typically VA mortgage loans have two ratios.
A front-end ratio and an back-end ratio. The front end ratio is the house payment, and the back-end ratio is the new house payment plus the monthly payments listed on your credit report.
They then divide these two ratios by your gross monthly income to get your max dti requirement for a VA Loan.

see link below on how to figure out your debt to income ratio:

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.

Text/call:      502-905-3708
fax:            502-327-9119