I specialize in Kentucky First Time Homebuyers FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans. I have helped over 1300 Kentucky families buy their first home or refinance their current mortgage for a lower payment; Kentucky First time buyers we still how available down payment assistance with KHC. Free Mortgage applications/ same day approvals. Web site is not endorsed by the FHA, VA, USDA govt agency. Text/call 502-905-3708 kentuckyloan@gmail.com NMLS 57916 NMLS 1738461
Kentucky Mortgage Loans with Past Credit Issues: FHA, VA, USDA, Conventional, and KHC Options
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.
6 Credit Repair Tips for Kentucky Homebuyers: FHA, VA & USDA Loans | Joel Lobb
6 Credit Repair Tips for Kentucky Homebuyers
Improve Your Score for FHA, VA & USDA Loans
Your credit score is one of the most important factors in qualifying for a mortgage in Kentucky. Whether you're seeking an FHA loan, VA loan, USDA loan, or Kentucky Housing Corporation (KHC) financing, having solid credit can make the difference between approval and rejection—and between getting a competitive interest rate or paying thousands more over the life of your loan.
The good news? You don't need perfect credit to buy a home. By taking actionable steps today, you can improve your credit score and position yourself for success with mortgage programs designed specifically for Kentucky homebuyers.
This comprehensive guide covers six proven strategies to repair your credit, along with answers to common questions about credit requirements for each loan program.
1. Pay Your Monthly Bills on Time
Why This Matters Most
Payment history is the single largest factor in your credit score, accounting for approximately 35% of your FICO score calculation. Even one late payment can significantly damage your credit profile and stay on your report for seven years.
Action Steps
Set up automatic payments through your bank for minimum amounts due. For cards or loans you're actively paying down, establish calendar reminders for payment dates. Consider:
Setting autopay on all utility bills
Scheduling payments 2-3 days before due dates to avoid late fees
Using banking apps that send payment reminders
Maintaining a simple spreadsheet or calendar of all due dates
💡 Impact Timeline
Consistent on-time payments can begin improving your score within 30-60 days, with more significant gains visible after six months.
2. Reduce Credit Card and Loan Balances
Understanding Credit Utilization
Your credit utilization ratio—the percentage of available credit you're actively using—accounts for roughly 30% of your FICO score. Lenders view high balances as a sign of financial stress, even if you're making on-time payments.
The 30% Rule
Aim to keep your credit card balances below 30% of your credit limit. For even stronger results, target balances under 10%. For example:
If you have a $5,000 credit limit, keep your balance under $500 (ideally) to $1,500 (acceptable)
Multiple cards at 20% utilization look better than one card maxed out
Debt Reduction Strategy
Create a monthly budget that prioritizes debt paydown before discretionary spending. Consider the avalanche method (paying highest interest rates first) or snowball method (paying smallest balances first) depending on your motivation style.
💡 Realistic Timeline
You can see score improvements from reduced utilization within 30 days of paying down balances, as credit card issuers typically report updated information monthly.
3. Limit New Credit Inquiries and Applications
Hard Inquiries vs. Soft Inquiries
When you apply for new credit—whether a credit card, auto loan, or mortgage—a "hard inquiry" is added to your credit report. Too many hard inquiries in a short period signals financial desperation to lenders and can lower your score by 5-10 points per inquiry.
The Smart Approach
If you're shopping for a mortgage, group your lender applications within a 30-45 day window. Credit scoring models treat multiple mortgage inquiries as a single inquiry when they occur within this timeframe, minimizing damage to your score.
What to Avoid
Opening new credit cards to boost available credit (counterintuitive and ineffective)
Applying for multiple retail store cards
Frequent new loan applications
Signing up for new credit "just in case"
Limit yourself to opening no more than one or two credit accounts per year. New credit inquiries represent about 10% of your FICO score but can have an outsized negative impact when clustered together.
4. Keep Old Credit Cards Open (Don't Close Them)
Why Length Matters
Your credit history length accounts for approximately 15% of your FICO score. Closing old accounts—especially your oldest ones—shortens your average account age and reduces the amount of available credit, both of which lower your score.
Best Practice
Keep all open accounts active, even if you're not using them regularly. For cards you've paid off or rarely use:
Make one small purchase monthly (gas, coffee, subscription)
Pay the full balance immediately
Never let the account go dormant or face closure by the card issuer
The Exception
If a card carries an annual fee you can't justify and the issuer won't waive it, closing it is acceptable. However, prioritize keeping older, fee-free cards open to preserve your credit history.
5. Request a Credit Limit Increase
Boost Your Available Credit Instantly
If you're consistently near your credit limit on one or more cards, requesting a credit limit increase can immediately improve your utilization ratio without requiring additional debt paydown.
How to Request
Call your credit card issuer's customer service number
Look for an online request option in your account dashboard
Request a limit increase without a hard inquiry (some issuers accommodate this)
Important Consideration
This strategy only works if you avoid increasing your spending to match the new limit. The goal is to lower your utilization percentage, not to spend more money.
6. Address Late Payments Before They Damage Your Report
Act Immediately If You Miss a Payment
If you miss a payment deadline, contact your creditor immediately—ideally within 30 days. If you have a strong payment history, the company may agree to not report the late payment to credit bureaus.
Damage Control
Explain your situation honestly (temporary hardship, oversight)
Request a goodwill adjustment or waiver of the late fee
Get confirmation in writing if they agree not to report it
Catch up on the balance as quickly as possible
Reality Check
Not all creditors will cooperate, but many will for long-time customers with otherwise good histories. The key is proactive communication rather than avoidance. Even if a late payment is reported, the damage is less severe if you immediately bring the account current. A late payment that remains unpaid for months causes far greater score damage.
How Long Does Negative Credit Information Stay on Your Report?
Understanding the timeline for credit repair helps set realistic expectations.
Item Type
Duration on Report
Late Payments
7 years from the date of first delinquency
Charge-Offs
7 years from the original delinquency date
Collections
7 years from the original debt date
Chapter 7 Bankruptcy
10 years from discharge
Chapter 13 Bankruptcy
7 years from completion or dismissal
Foreclosure
7 years from the date of first missed payment
Hard Inquiries
2 years (but impact on score lessens after 12 months)
Key Takeaway: While negative marks remain for years, their impact on your score diminishes over time as you build new, positive credit history. A 7-year-old late payment affects your score far less than a recent one.
Understanding credit requirements for different loan programs helps you plan your timeline.
FHA Loans in Kentucky
Can you qualify for an FHA loan with a 580 credit score? Yes. FHA loans are among the most credit-flexible programs available and are popular with Kentucky first-time homebuyers.
Credit Score 580+: Qualify with just 3.5% down payment
Credit Score Below 580: Some lenders approve with 10% down through manual underwriting
Why FHA Works: Designed for borrowers with limited credit history or past credit challenges
VA Loans for Kentucky Veterans
The VA doesn't set a minimum credit score requirement, but most Kentucky lenders require 580-620 or higher. VA loans are exceptionally flexible for service members and veterans with credit challenges.
Expected Result: Significant improvement possible; lender options available
Bottom Line: Working with a mortgage professional early allows you to build a personalized timeline and accelerate your path to homeownership. Some borrowers qualify within weeks; others benefit from a 6-12 month strategy.
Bankruptcy and Kentucky Mortgage Loans
If you're navigating bankruptcy, homeownership is still possible.
Chapter 7 Bankruptcy
FHA Loans: Wait 2 years from discharge date
VA Loans: Wait 2 years from discharge date
USDA Loans: Wait 3 years from discharge date
Conventional Loans: 4-7 year waiting period
Chapter 13 Bankruptcy
May qualify after 12 months of on-time payments with court approval
Must obtain court permission to take on new debt
Some lenders work with borrowers still in active Chapter 13 plans
Your Next Step: Create Your Credit Repair Strategy
Your credit score isn't permanent. By implementing these six strategies, you can meaningfully improve your financial position and qualify for Kentucky mortgage programs designed to help you achieve homeownership.
Whether you need to repair damaged credit or optimize an already-decent score, timing matters. Starting today gives you months of payment history to present to lenders.
Ready to Explore Your Mortgage Options?
As a Kentucky mortgage specialist with over 20 years of experience, I've helped more than 1,300 families secure the right loan program—even with credit challenges.
✓ Free Mortgage Application with Same-Day Approval
The first step is a conversation—no obligation, no pressure.
Frequently Asked Questions
Can I buy a house in Kentucky with a 580 credit score?
Yes. With a 580 credit 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?
For Chapter 7 bankruptcy, wait 2 years from discharge for FHA and VA loans, and 3 years for USDA loans. For Chapter 13 bankruptcy, you may qualify after 12 months of on-time payments with court approval. Conventional loans require longer waiting periods.
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. 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 doesn't set a minimum score. However, many lenders in Kentucky require 620 or higher. Since VA loans are more flexible, they're 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 620 score is required for KHC's down payment assistance, though 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 significantly improve scores. 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 personalized timeline and strategy.
Contact Information
Joel Lobb Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA
NMLS Personal ID: 57916 Company NMLS ID: 1738461 www.nmlsconsumeraccess.org Equal Housing Lender | Mortgage Loans Only in Kentucky
Disclaimer: The information provided on this page is for educational purposes and does not guarantee mortgage approval. Not all products or services may be available to all borrowers. This is an independent platform created to assist Kentucky homebuyers and is not endorsed by the FHA, VA, USDA, or any government agency. For more information about loan programs and licensing, visit www.nmlsconsumeraccess.org.
What credit score do I need to qualify for Kentucky FHA loan is one of the most common questions lenders hear. The short answer is you must have a minimum credit score of 500 to be eligible for an Kentucky FHA loan. Higher scores will get you better terms and a smaller down payment requirement. Anything lower than 500 disqualifies you from consideration for an Kentucky FHA loan.
There are two sets of credit score requirements.
One important thing to understand is that the Federal Housing Administration (FHA) does not lend money directly to home buyers. You will fill out an application with a regular lender just as you would if you were applying for any other type of mortgage. What the FHA does is ensure your loan to help protect the lender in case you default. You will be required not only to meet the FHA guidelines to qualify for a loan but also meet any additional qualifications required by the lender. This means there are two sets of requirements you have to meet with your credit score.
1. The first set of requirements comes from the Department of Housing and Urban Development (HUD). HUD oversees the FHA and determines what a borrower’s minimum eligibility requirements will be to obtain an FHA loan.
2. The second set of requirements comes from the mortgage lender. The mortgage lender has the right to add its requirements to those mandated by HUD.
What HUD requires of borrowers to be eligible for an FHA loan
The HUD Handbook 4000.1 includes the official guidelines when it comes to the FHA mortgage insurance program.
It states that in 2020 the borrowers with credit scores of 580 or higher are eligible for a 96.5% loan with 3.5% down.
Borrowers with credit scores from 500 to 579 are eligible for a 90% loan with 10% down.
Individuals with credit scores below 500 are not eligible for the FHA program.
What lenders may require of borrowers to be eligible for an FHA loan
Lenders have the right to add requirements over and above the minimum requirements of HUD. These additional requirements are called overlays. Your lender may or may not require them. This is not something that should come as a surprise to you, however. Requiring a credit score of 580 to 620 is not unusual. In addition to your credit score, you must have a manageable debt level that lenders are comfortable with and enough income to repay your loan.
What credit score do I need to qualify for FHA loan?
These percentages show that the majority of borrowers who successfully qualify for FHA loans fall into the 600 to 799 range. While it is true that some successfully qualify in the low range of 500 to 599, you have a much better chance of being approved for a loan with good terms and a low down payment if you fall into the higher range.
Kentucky Home Buyers: What Credit Score Do You Need?
Buying a home in Kentucky? Your credit score plays a crucial role in determining which mortgage loans you qualify for and how much you’ll pay in interest rates. Understanding the minimum credit score requirements for FHA, VA, USDA, and Conventional loans can help you prepare for homeownership and secure the best loan options.
While there's no single, simple answer, this guide will break down the minimum credit score requirements for various Kentucky mortgage options, empowering you to understand where you stand and how to achieve your homeownership goals. We'll cut through the confusion and give you the straight facts!
Why Your Credit Score Matters: More Than Just a Number
Think of your credit score as your financial reputation. Lenders use it to assess the risk of lending you money. A higher score signals lower risk, translating to better interest rates, more favorable loan terms, and potentially lower down payment requirements.
Here's the credit score impact on interest rates and your wallet (in general terms):
760-850: The Gold Standard! Expect the lowest interest rates and the most attractive loan options.
700-759: Excellent! You'll still qualify for very competitive rates and favorable terms.
640-699: Good. You'll likely be approved, but interest rates will be slightly higher.
620-639: Acceptable. This range is often the minimum for conventional loans, but be prepared for less favorable rates.
As the guide shows, aiming for a 740+ score can lead to best rates and closing costs on mortgage loans, especially Conventional Mortgage Loans,.
Let's explore the minimum credit score requirements for different Kentucky mortgage types:
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 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 a 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.
There is also a max household income limits with most cutoff starting at 109,500 for a family of four, and up to $136,000 for a family of five or more.
The income limits change every spring, so make sure and check to see what updated income limits are. USDA requires 3 years removed from bankruptcy and foreclosure There is no max USDA loan limit.
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 counteract 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.
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% for first time use, and 3% 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 and no max loan limits in Kentucky
Most VA lenders I work with will want a 580-credit score, even though VA says in their guidelines there is no minimum score, good luck finding a lender VA requires 2 years removed from bankruptcy or foreclosure Clear Caviars needed to for a VA loan.
Kentucky Down Payment Assistance
This type of loan is administered by KHC in the state of Kentucky. They typically have $10,000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years. Current terms are $10,000 over 10 years at 3.75%
Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.
KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs. The conventional loan requirements at KHC requires 660 credit score. The max debt to income ratios is set at 50% and 50% respectively.
FHA Loans – Best for First-Time Homebuyers with Low Credit
500-579 Credit Score – Requires 10% down payment 580+ Credit Score – Requires 3.5% down payment Flexible credit guidelines & lower down payments Easier approval for first-time buyers & those with past credit issues
VA Loans – Best for Veterans and Active Military
No official minimum credit score Most lenders require 580-620+ 0% down payment – No mortgage insurance required Best for veterans, active-duty military & eligible spouses
USDA Loans – Best for Rural & Suburban Homebuyers
Minimum 620 to 640+ Credit Score (for automatic approval through GUS ) Some lenders may approve below 640 with manual underwriting with a minimum score of 581 and above 0% down payment required Best for low-to-moderate-income homebuyers in rural areas Income limits and property locations restrictions
Conventional Loans – Best for Borrowers with Good Credit
Minimum 620+ Credit Score-Truthfully, if scores are 620 and less than 20% down payment look at going to the government loan programs like FHA, USDA and VA Higher scores (760+) qualify for better interest rates Down payment: 3%-5% or more Best for buyers with strong credit & stable income
Minimum 620+ Credit Score, Income limits and max dti is 50% usually used for the down payment and closing costs on a FHA, VA, USDA or Conventional loan with the $10k DAP assistance Offers down payment assistance for eligible buyers Best for first-time homebuyers needing financial help
Non-QM Loans – Alternative Financing for Unique Situations
Minimum 500-620 Credit Score (Varies by lender) Includes Bank Statement Loans, DSCR Loans, Asset-Based Loans Best for self-employed borrowers, real estate investors & those with non-traditional income sources
Why Choose Non-QM? These non-traditional loans are great for borrowers who don’t qualify for conventional or government-backed loans due to income verification challenges.
How Credit Scores Affect Mortgage Interest Rates
Your credit score doesn’t just determine loan eligibility—it also affects the interest rate you receive.
Here’s how credit scores impact mortgage rates (examples based on typical loan rates):
Credit Score
Estimated Interest Rate
Kentucky Mortgage Loan Options Available
760-850
Best Rate (Lowest Cost)
Kentucky Conventional, FHA, VA, USDA
700-759
Good Rate
Kentucky Conventional, FHA, VA, USDA
640-699
Higher Rate
Kentucky FHA, VA, USDA, Some Conventional
620-639
Even Higher Rate
Kentucky FHA, VA, USDA, Some Conventional
Below 620
Limited Options, Highest Rates
FHA, VA, USDA and (with higher down payment), Non-QM
Evo Mortgage Company NMLS# 1738461 Personal NMLS# 57916
For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.
Kentucky Local Home Loan Lender Services
First-Time Home Buyers Welcome FHA, Rural Housing (USDA), VA, and Kentucky Housing Corporation (KHC) Loans Conventional Loan Options Available Fast Local Decision-Making Experienced Guidance Through the Home Buying Process
Here are the important points about Kentucky USDA Rural Housing Loans:
USDA loan are only available in certain counties of Kentucky.
There are two types of USDA loans available: Direct and Guaranteed.
100% financing. No down payment
USDA will go down to a no score and uses and automated underwriting pre-approval system called GUS-Guarantee Underwriting System. The GUS findings will dictate your loan pre-approval.
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/
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).
How to get approved for a Kentucky FHA Mortgage Loan with Bad Credit in 2023.
Below details the DTI requirements The maximum Front and Back ratios applicable to manually underwritten Kentucky FHA Mortgages are detailed below.
Maximum DTI allowed for Manual UW is 40/50
**IMPORTANT – any loan where ALL borrowers have No Fico Score, the Maximum DTI is 31/43 per HUD DTI and Compensating Factor Requirements:
560 FICO and Above – DTI up to 31/43.Comp Factors Required - NONE.
560 FICO and Above - DTI up to 37/47Comp Factors Required– 1 Required
560 FICO and Above – DTI up to 40/50Comp Factors Required– 2 Required
ACCEPTABLE COMPENSATING FACTORS:
RESERVES – 3 mo (1-2 Unit) 6 Mo (3-4 Unit)
HOUSING DECREASE – new PITI is no more than $100 or 5%, the lesser of the two
RESIDUAL – Meet VA residual requirements
ADDITIONAL INCOME – Income not reflected in DTI (this comp factor is only permitted when DTI is over 37/47 and if income were used, it would decrease DTI under 37/47)
MANUAL UNDERWRITE REQUIREMENTS ON ALL LOANS
12 Months verified housing history OR rent free letter,
Reserves, AND
1 month reserves for 1-2 Unit
3 month reserves for 3-4 Unit
NOTE: If you use reserves as a compensating factor, then you do not need these reserves in addition
Letter of explanation for all derogatory credit, including any NSFs and/or overdrafts in bank accountIf applicable, 2 months for all bank statements in the file (60 days activity)
Maximum DTI 40/50 (HUD guideline, no exceptions
Instructions for Residual Income as Compensating Factor
Residual income may be used as compensating factor when it meets or exceeds the stated amounts in
the table below. Note that all household members must be counted for ‘family size’ except for individuals
who are fully supported from a verified source of income not included in the effective income of the loan.
Residual Income Calculation When Needed as a Compensating Factor
Gross Monthly Income1 2
- (State income taxes3)
- (Federal income taxes3)
- (Municipal or other taxes3)
- (Retirement deductions and/or Social Security deductions)
- (Total monthly housing payment)
- (Estimated maintenance and utilities4)
- (Job related expenses (e.g., childcare)5)
= Monthly Residual Income for Family Support.
[When using Residual Income as a compensating factor, the “Monthly Residual Income for Family Support” must
meet or exceed the dollar amount in the “Residual Income Table” above.
1 Income from occupying borrowers only
2 Non-taxable income may not be grossed up
3 Federal and state taxes must be used to determine appropriate deductions or paystub if taxes are not available
4 Multiply total living area (sq ft) x 14
5 Childcare letter is not required (as it is for VA) and should not be requested
Exceptions to the Required Residual Income
You may reduce the residual income figure from the above tables by 5% if:
1. The borrower(s) is an active duty or retired serviceperson, OR
2. There is a clear indication that a borrower will receive the benefits resulting from use of military-based
facilities located near the property.
Examples of military service for reduced residual income are:
Guard and Reserve military retirees, 100% disabled Veterans and their family members, or Medal of Honor
recipient.
Joel Lobb Mortgage Loan Officer Individual NMLS ID #57916
American Mortgage Solutions, Inc. 10602 Timberwood Circle Louisville, KY 40223 Company NMLS ID #1364
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).
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