General Kentucky FHA loan requirements include:
- The loan must be for a property used for your primary residence.
- The property must be appraised by an FHA-approved appraiser.
- The property must be safe, sound and secure, in compliance with minimum property standards as defined by the U.S. Department of Housing and Urban Development, or HUD.
- You must have a valid Social Security number and be a legal resident of the U.S.
- You must have a minimum credit score of 580 with a down payment of at least 3.5 percent, or a minimum credit score of 500 with a down payment of at least 10 percent.
- You may not have delinquent federal debt or judgments, or debt associated with past FHA loans.
- You must have steady employment history.
- You must make a down payment of at least 3.5 percent of the purchase price. If the down payment was gifted by a family member, documentation is required.
- You must have a DTI ratio that does not exceed limits.
- Any judgments or collections on the credit report must be resolved or satisfactorily explained.
- Any required waiting period has passed, as follows:
Event | Waiting period | Waiting period with extenuating circumstances (nonrecurring events beyond your control that result in sudden, significant, prolonged reduction in income or a catastrophic increase in financial obligations) |
Chapter 7 or 11 bankruptcy | Four years | Two years |
Chapter 13 bankruptcy | Two years from discharge, or four years from dismissal | Two years |
Multiple bankruptcies | Five years if more than one filing in last seven years. Most recent bankruptcy must have been caused by extenuating circumstances. | Three years from most recent discharge or dismissal |
Foreclosure | Seven years | Three years, with additional requirements after three years up to seven years: 90 percent maximum loan-to-value purchase, principal residence, limited cash-out refinance |
Deed-in-lieu of foreclosure, preforeclosure sale (short-sale), or charge-off of mortgage account | Four years | Two years |
Debt-to-Income Ratio Limits for Kentucky FHA Loans
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Applications for Kentucky FHA borrowers with lower salaries and higher DTIs are manually underwritten. Manual underwriting means that your lender assigns a person to review your loan application and documents, versus running your information through an automated underwriting system. Manually underwritten FHA loans allow for front- and back-end DTI ratios of up to 40 percent and 50 percent, respectively. To qualify for these higher DTI limits, you will need to meet other requirements.
Mortgage Loan Officer
email: kentuckyloan@gmail.com