Different Types of Kentucky Home Loans

Understanding the Four Main Mortgage Loan Programs in Kentucky

When securing a mortgage loan in Kentucky, your loan will likely be backed by one of four major agencies: FHA, VA, USDA, or Fannie Mae/Freddie Mac (conventional loans). Each program has unique benefits and qualifications, tailored to different types of borrowers. Here's a breakdown to help you determine which program might be the best fit for you.

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 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.

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 with a 580-credit score or higher. And will go down to a 500-credit score with 10% down payment.

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 Chapter 7 and 1 year from a Chapter 13 plan 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 a 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 and NO max loan limits in Kentucky 

Most VA lenders I work with will want a 580-credit score even though VA does not require a minimum credit score per se on their written guidelines.

VA requires 2 years removed from bankruptcy or foreclosure.

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.

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% respectively.

USDA, VA, FHA, and Conventional Loans in Kentucky: Key Differences First-Time Homebuyers Must Know

When you're buying a home in Kentucky, selecting the right mortgage program is critical. Whether you're a first-time homebuyer or looking to upgrade, understanding the core differences between USDA, VA, FHA, and Conventional loans will help you make a confident, informed decision.

Below is a quick visual comparison followed by a detailed breakdown tailored to Kentucky borrowers.

Loan Program Comparison Chart

Feature	USDA	VA	FHA	Conventional
Max Financing	100%	100%	96.5%	97% (3%–5% down)
Financing Closing Costs	✅ Yes	❌ No	❌ No	❌ No
Upfront Fee	1.0% Guarantee Fee	0.3–3.6% VA Funding Fee	1.75% MIP	Varies
Monthly Mortgage Insurance	0.35%	❌ None	0.85%	Varies (can drop at 80% LTV)
Bankruptcy Wait	3 Years	2 Years	2 Years (Ch. 7)	4–7 Years
Foreclosure Wait	3 Years	2 Years	3 Years	7 Years
Short Sale Wait	3 Years	2 Years	3 Years	4 Years
Seller Concessions	6%	No cap (4% to debts)	6%	3–9% depending on LTV

Kentucky USDA Rural Housing Loan

• Ideal for: Rural Kentucky homebuyers with low to moderate income

• Down Payment: 0% required

• Credit Score: Most lenders want 640+ for automated approval via GUS

• Mortgage Insurance: Low (.35% monthly; 1% upfront)

• Location: Must be in USDA-eligible rural zones

• Bankruptcy/Foreclosure Wait: 3 years

• Best for: Borrowers who want 100% financing in eligible rural areas

Kentucky VA Loan (For Veterans and Military)

• Ideal for: Veterans, active duty, and eligible military members

• Down Payment: 0% required

• Credit Score: Typically 580+ (no official VA minimum)

• Mortgage Insurance: None

• Funding Fee: 2.3% (first-time use), 3.6% (subsequent use)

• Location: Anywhere in Kentucky

• Bankruptcy/Foreclosure Wait: 2 years

• Best for: Military buyers wanting no down payment and no MI

Kentucky FHA Loan

• Ideal for: First-time homebuyers or those with credit challenges

• Down Payment: 3.5% with 580+ credit score; 10% with 500–579

• Credit Score: 580 minimum for most

• Mortgage Insurance: 0.85% monthly for life of loan; 1.75% upfront

• Bankruptcy Wait: 2 years (Ch. 7), 1 year (Ch. 13 plan)

• Foreclosure Wait: 3 years

• Grants Allowed: Yes (e.g., KHC DAP)

• Best for: Buyers with less-than-perfect credit or lower down payments

Conventional Loan (Fannie Mae/Freddie Mac)

• Ideal for: Buyers with strong credit and stable income

• Down Payment: 3%–5%

• Credit Score: 620 minimum (680+ preferred for best pricing)

• Mortgage Insurance: Varies, can be removed at 80% LTV

• Closing Costs: Often higher unless lender-paid via higher rate

• Bankruptcy Wait: 4 years (Ch. 7), 2 years (Ch. 13)

• Foreclosure Wait: 7 years

• Best for: Borrowers with higher scores and at least 3%–5% down

Kentucky Down Payment Assistance (KHC)

• DPA Offered: $10,000 second mortgage paid over 10 years

• Available for: FHA, VA, USDA, Conventional

• Min Credit Score: 620 (660 for Conventional)

• Debt Ratio Cap: 50%

• Perfect for: Buyers with solid income but no down payment

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

---

Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

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

How much income do I need qualify for Kentucky Home Loan?

Kentucky Lender's Criteria: Debt-to-Income Ratios

The Debt-to-Income (DTI) ratio is a critical factor in determining whether you qualify for a mortgage along with credit, work history and assets. It measures how much of your gross monthly income is used to cover your monthly debt obligations.

For Most Kentucky Mortgage loans ,the  debt to income ratio is centered around the front end ratio and back end ratio. The front end ratio will vary according to the different types of loans, and I will show them below.  The backend ratio, which measures the new house payment along with your current monthly payments on the credit report along with any court ordered payments like child support, DTI limit is typically 45 to 50%

From a Kentucky Mortgage lender's perspective, your ability to purchase a home depends largely on the following factors:

Front-End Ratio

The front-end ratio is the percentage of your yearly gross income dedicated toward paying your mortgage each month. Your mortgage payment consists of four components: principal, interest, taxes and insurance (often collectively referred to as PITI) A good rule of thumb is that PITI should not exceed 31% of your gross income. If you make $100,000 a year, then your max house payment to include escrows for home insurance, mortgage insurance, property taxes would be $2583.00

Back-End Ratio

The back-end ratio, also known as the debt-to-income ratio, calculates the percentage of your gross income required to cover your debts. Debts include your mortgage, credit-card payments, child support and other loan payments. Most lenders recommend that your debt-to-income ratio does not exceed 45% of your gross income. To calculate your maximum monthly debt based on this ratio, multiply your gross income by 0..45 and divide by 12. For example, if you earn $100,000 per year, your maximum monthly debt expenses should not exceed $3,750 with new mortgage payment. Utility bills, car insurance, cell phone bills, insurance payments does not factor into this ratio. Only bills listed on credit report and 401k loan and child support payment




If you are looking to purchase your first home, you have probably been doing your research about properties in your area, where you might be able to obtain a loan and how to qualify for it. A key term you may recognize from all that research is "debt-to-income ratio," which refers to the figure you get when you add up all your monthly debt payments and then divide that number by your monthly income. In laymen's terms, the debt-to-income ratio gives potential mortgage lenders an idea of how much your expenses are each month in comparison to how much you actually earn.


Depending on where you are in the home-buying process, you may have a good idea of where your credit score lands. As important as a strong credit score is, however, a favorable debt-to-income ratio is arguably of equal importance, and it may be just as closely scrutinized by any potential mortgage lender.

Front-end ratios vs. back-end ratios

When you try and obtain a loan, expect possible lenders to review two types of debt-to-income ratio. The front-end ratio, or "housing" ratio, gives them an idea of what percentage of your monthly income would have to go toward home-related expenses, such as the mortgage, associated taxes and any additional fees, such as homeowner's association expenditures, that may apply.


The back-end ratio, on the other hand, takes a more cumulative approach and compares your monthly income to all your expenses, from the housing-related ones to school tuition, child support, car payments and any other financial obligations you may have.

The ideal debt-to-income ratio

The exact percentage your lender will look for will likely vary based on factors such as your credit score, how much you have in your savings account and how much you have to put down for your down payment. Most standard lenders, however, prefer to see something in the ballpark of 28 percent for a front-end ratio. For a back-end ratio, they will likely look for a percentage that does not exceed 36 percent. Federal Housing Authority lenders typically look for a front-end ratio of about 31 percent and a back-end ratio that does not exceed 43 percent.

DTI Calculator for Kentucky Mortgage Loans

Wondering how much house you can afford in Kentucky? Use our simple DTI (Debt-to-Income) ratio calculator to estimate your maximum monthly mortgage payment based on FHA, USDA, VA, KHC, and Conventional loan program guidelines. This is especially helpful for first-time homebuyers in Kentucky applying for zero-down USDA loans, FHA loans, or KHC Down Payment Assistance.

DTI Max House Payment Calculator

Gross Monthly Income ($): Total Monthly Debt Payments ($): Front-End DTI (%) Back-End DTI (%)

At EVO Mortgage, we help clients across Kentucky understand how to qualify based on DTI ratios, credit scores, and loan program rules. Contact Joel Lobb or call/text 502-905-3708 to get pre-approved today!

Lower a high ratio

Simply put, the most effective way to lower a high debt-to-income ratio and therefore make yourself more appealing to lenders is to pay off some of your debt. If you have a cosigner who may be willing to help you out with a loan, that could serve as an additional method of getting around a high ratio.

To calculate the debt-to-income (DTI) ratio for the scenario you provided, you'll need to figure out both the front-end and back-end DTI ratios.

1. Front-end DTI ratio: This ratio only includes the mortgage payment (including principal, interest, taxes, and insurance) divided by your gross monthly income.




2. Back-end DTI ratio: This ratio includes all monthly debts (mortgage, credit cards, auto loans, student loans, etc.) divided by your gross monthly income.

   
   

(DTI) ratio requirements for different types of mortgage loans in Kentucky, including FHA, VA, USDA, Fannie Mae, and Kentucky Housing loans

Here’s a breakdown showing how much house payment a borrower making $5,000 gross per month with $1,000 in monthly debts can qualify for across various loan programs in Kentucky, based on standard DTI guidelines. The table displays both front-end and back-end limits and illustrates which payment amount would be the true qualifying cap under each program. Let me know if you want to add taxes, insurance, or MI estimates next.

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

---

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

Kentucky FHA Mortgage Changes for 2025 Kentucky Home Buyers

🏠 Kentucky FHA Mortgage Loans

Expert Kentucky FHA Lending with 20+ Years Experience

Helping Kentucky Families Achieve Homeownership Since 2003

🔥 NEW: 2025 FHA Appraisal Updates in Effect!

June 27, 2025: HUD released Mortgagee Letter 2025-18 with streamlined FHA appraisal requirements. Faster approvals, less paperwork, and better alignment with conventional loans!

🎯 Top 5 Reasons Kentucky Families Choose FHA Loans

💰

Low Down Payment

Just 3.5% down payment required - much lower than conventional loans

📊

Flexible Credit

Minimum 580 credit score for 3.5% down, 500-579 for 10% down

🤝

Seller Paid Closing Costs

Sellers can contribute up to 6% toward your closing costs

💼

Flexible Income

Various income sources accepted with proper documentation

💑

Qualify Without Spouse

Can qualify individually even if spouse has poor credit

🆕 What's New: 2025 FHA Appraisal Changes

HUD's latest updates make FHA loans even more attractive for Kentucky homebuyers:

• 🚫 Eliminated: Remaining Economic Life requirements for appraisers
• 📷 Streamlined Photos: No more attic or crawl space photos required
• 📊 Fewer Comps: Reduced comparable sales requirements in dynamic markets
• ⚡ Faster Process: Quicker appraisal turnaround times
• 🎯 Better Consistency: Closer alignment with conventional loan standards

💡 What This Means for You

These changes make FHA loans more competitive in Kentucky's fast-moving real estate market. Your FHA offer can now compete more effectively with conventional financing, especially when combined with our available down payment assistance programs!

📋 Kentucky FHA Loan Requirements

Requirement	Details
Credit Score	580+ for 3.5% down | 500-579 for 10% down
Down Payment	3.5% minimum (can be gifted from family or qualified sources)
Co-Signer	Yes - non-occupying co-borrowers allowed to help qualify
Debt-to-Income	Typically 43% or less (higher with strong compensating factors)
Employment	2 years steady work history (fixed income sources accepted)
CAIVRS	Must have clear CAIVRS (no outstanding federal debt)
Property Types	Single family, condos, 2-4 unit properties, manufactured homes
Mortgage Insurance	Required for all FHA loans - based on loan-to-value and term (not credit score or DTI like conventional PMI)

💰 Kentucky FHA Loan Limits (2025)

Maximum FHA Loan Amounts by County

The maximum FHA loan amount varies by county in Kentucky. Current limits include:

• Base Limit: $524,225
• Mid-Range Counties: $671,200
• Higher Cost Areas: $811,275
• Highest Limit Counties: $1,008,300

Maximum Financing: 97.75% of appraised value or sales price (whichever is lower)

Contact me for specific loan limits in your Kentucky county - limits vary by location. I'll help you determine the exact limit for your area.

🏡 Available Kentucky FHA Loan Types

Purchase Loans

• FHA Purchase: Buy your primary residence with just 3.5% down
• FHA + KHC: Combine with Kentucky Housing Corporation down payment assistance

Refinance Options

• Rate/Term Refinance: Lower your rate or change loan terms
• Cash-Out Refinance: Access your home's equity for renovations, debt consolidation
• FHA Streamline: Quick refinance for existing FHA borrowers (no appraisal needed)

✅ Pros and Cons of FHA Loans

✅ Advantages

• Low 3.5% down payment
• Flexible credit requirements
• Competitive interest rates
• Down payment can be gifted
• Seller can pay closing costs
• Available after bankruptcy/foreclosure
• No prepayment penalties

⚠️ Considerations

• Mortgage insurance required
• Primary residence only
• Loan limits apply
• Property must meet FHA standards
• Upfront mortgage insurance premium

🕐 Waiting Periods After Financial Events

Event	Standard Waiting Period	With Extenuating Circumstances
Chapter 7 Bankruptcy	4 years	2 years
Chapter 13 Bankruptcy	2 years from discharge	1 year with court approval
Foreclosure	3 years	3 years (with conditions)
Short Sale/Deed-in-Lieu	3 years	2 years

🎁 Kentucky Down Payment Assistance Available

Kentucky Housing Corporation (KHC) Programs

We still have down payment assistance available through KHC programs for qualified Kentucky first-time homebuyers. These funds can significantly reduce your upfront costs and make homeownership more accessible.

Program Benefits:

• Up to $10,000 in KHC down payment assistance
• 5% grant available for qualified borrowers
• Below-market interest rates
• Can be combined with FHA loans
• Income and purchase price limits apply

🚀 Ready to Get Your Kentucky FHA Loan Started?

Over 20 Years Experience | 1,300+ Kentucky Families Helped

Let me guide you through the new 2025 FHA guidelines and find the best loan program for your situation. Free pre-approval with same-day decisions!

📞 Call/Text
(502) 905-3708

📧 Email
kentuckyloan@gmail.com

🌐 Website
KentuckyFHALoan.com

📍 Office
911 Barret Ave.
Louisville, KY 40204

📞 Get Free Pre-Approval 📧 Ask Questions

Joel Lobb - Kentucky Mortgage Loan Officer
NMLS #57916 | EVO Mortgage - NMLS #1738461

Important Disclosures:

• Equal Housing Lender - All loan programs subject to credit approval
• Rates and terms subject to change without notice
• Visit NMLS Consumer Access for licensing information
• This website is not endorsed by FHA, VA, USDA, or any government agency
• Kentucky Mortgage Loan Officer License Only

Can a person have more than one Kentucky FHA loan?

Can You Have Two Kentucky FHA Loans at One Time?

FHA will not insure more than one Property as a Principal Residence for any Borrower, except as noted below. FHA will not insure a Mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining Investment Properties, even if the Property to be insured will be the only one owned using FHA mortgage insurance.

Properties previously acquired as Investment Properties are not subject to these restrictions.

Listed below are the only circumstances in which a Borrower with an existing FHA-insured Mortgage for a Principal Residence may obtain an additional FHA-insured Mortgage on a new Principal Residence:

RELOCATION - A Borrower may be eligible to obtain another FHA-insured Mortgage without being required to sell an existing Property covered by an FHA-insured Mortgage if the Borrower is:
- relocating or has relocated for an employment-related reason; and
- establishing or has established a new Principal Residence in an area more than 100 miles from the Borrower’s current Principal Residence.

If the Borrower moves back to the original area, the Borrower is not required to live in the original house and may obtain a new FHA-insured Mortgage on a new Principal Residence provided the relocation meets the two requirements above.

INCREASE IN FAMILY SIZE - A Borrower may be eligible for another house with an FHA-insured Mortgage if the Borrower provides satisfactory evidence that:
- the Borrower has had an increase in legal dependents and the Property now fails to meet family needs; and
- the Loan-to-Value (LTV) ratio on the current Principal Residence is equal to or less than 75% or is paid down to that amount, based on the outstanding Mortgage balance and a current residential appraisal.
  
VACATING A JOINTLY-OWNED PROPERTY - A Borrower may be eligible for another FHA-insured Mortgage if the Borrower is vacating (with no intent to return) the Principal Residence which will remain occupied by an existing co-Borrower.

NON-OCCUPYING CO-BORROWER - A non-occupying co-Borrower on an existing FHA-insured Mortgage may qualify for an FHA-insured Mortgage on a new Property to be their own Principal Residence.

For additional information see Handbook 4000.1 II.A.1.b.iii.(A) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

     

 

Home > FHA Loans Kentucky > Two FHA Loans Kentucky

Can You Have Two FHA Loans at the Same Time in Kentucky?2025 Guide

Updated June 2025 | By Joel Lobb, Kentucky Mortgage Broker | 8 min read

📋 Table of Contents

• Quick Answer
• Why FHA Usually Caps You at One Loan
• The Four HUD Exceptions
• Kentucky Lender Checklist
• Options If You Don't Qualify
• Kentucky-Specific Examples
• Expert Consultation

🎯Quick Answer

Yes—but only under four tightly‑defined HUD exceptions. Below we unpack each scenario, outline documentation you'll need, and offer Kentucky‑specific strategies if you don't qualify.

Four Ways to Have Two FHA Loans in Kentucky

Interactive guide showing the four HUD-approved exceptions for having two FHA loans simultaneously in Kentucky.

Why the FHA Usually Caps You at One Loan

FHA loans are engineered to encourage owner‑occupied, primary‑residence purchases. Multiple simultaneous FHA loans would effectively convert the program into a low‑down‑payment tool for investment property accumulation—something HUD explicitly forbids (Handbook 4000.1 § II.A.1.b.iii(A)).

This policy ensures that FHA's mission remains focused on helping Americans achieve homeownership for their primary residence, not building real estate portfolios. The program's low down payment requirements and flexible credit guidelines are specifically designed for owner-occupants who will live in the home.

Important: Attempting to circumvent these rules can result in loan fraud charges and immediate loan acceleration. Always work with a licensed Kentucky mortgage professional to ensure compliance.

The Four HUD Exceptions That Permit a Second FHA Loan

#	Exception	Core Requirements
1	Employment‑Related Relocation ("100‑Mile Rule")	Job transfer or new employment more than 100 miles from current home New Kentucky primary residence must be established in the distant area Existing home can be retained or rented Must be employment-related (not personal choice)
2	Increase in Family Size	Documented increase in legal dependents makes current home inadequate Existing FHA loan is ≤ 75% LTV or paid down to that level Current residential appraisal required Birth certificates, adoption papers, or legal guardianship documents
3	Vacating a Jointly‑Owned Property	Borrower permanently leaves home still occupied by co‑borrower Common in divorce or separation situations Must demonstrate no intent to return Co-borrower continues occupancy as primary residence
4	Non‑Occupying Co‑Borrower	Previously co‑signed someone else's FHA loan without occupying Now seeking own Kentucky primary residence Must meet all standard FHA qualification requirements Common with parent co-signers helping adult children

How to Prove You Qualify (Kentucky Lender Checklist)

1Gather Documentation

Gather relocation or family‑size documentation. Employment offer letter, corporate transfer memo, birth/adoption certificates, divorce decree—whatever applies to your specific exception.

Kentucky Tip: For employment relocations, companies like GE Appliances, Humana, or UPS often provide detailed transfer documentation.

2Order Current Appraisal

Order an appraisal to confirm 75% LTV if using the family‑size exception. Use Kentucky-licensed appraisers familiar with current market conditions.

3Run AUS Analysis

Run both housing payments through AUS (DU / TOTAL Scorecard). Standard FHA DTI caps (31/43) still apply, though strong compensating factors may warrant a manual underwrite.

4Budget for Reserves

Budget for reserves. Many Kentucky lenders overlay one‑ or two‑month PITIA reserves on both properties. Plan for additional cash requirements beyond down payment.

Real Kentucky Scenarios

Scenario 1: Louisville to Nashville Relocation

Sarah works for Humana in Louisville and gets transferred to their Nashville operations—exactly 180 miles away. She can keep her current FHA-financed home in St. Matthews as a rental property while getting a new FHA loan for her Nashville primary residence.

Scenario 2: Growing Family in Lexington

The Johnson family has twins on the way, making their 2-bedroom Lexington home inadequate. Their current FHA loan balance is $180,000 on a home now worth $250,000 (72% LTV). They qualify for a second FHA loan to purchase a larger home in Hamburg or Chevy Chase areas.

Scenario 3: Divorce in Northern Kentucky

A couple in Northern Kentucky (Covington area) divorces. The wife moves out permanently while the husband keeps the FHA-financed home. She can now apply for her own FHA loan for a new primary residence in Cincinnati or another Kentucky city.

Options If You Don't Qualify for a Second FHA Loan

• Refinance your first FHA into a Conventional loan to free up FHA eligibility and potentially drop monthly MIP. This is often the most practical solution for Kentucky borrowers with improved credit and equity.
• Pursue VA loans (for veterans), USDA loans (rural areas), or Kentucky Housing Corporation (KHC) financing for the new home if eligible.
• Sell or legally assume the existing FHA‑financed home, then apply for a fresh FHA case number. The strong Kentucky market makes selling often profitable.
• Consider conventional loans with low down payment options like 3% down conventional or HomeReady/HomePossible programs.

Need a custom game plan? Skip to my contact info and let's run the numbers for your specific Kentucky situation.

🎯 Ready for a Scenario Review?

I can confirm your eligibility in 10 minutes or less. Call or text (502) 905‑3708 or email kentuckyloan@gmail.com for a same‑day analysis — no cost, no obligation.

Call/Text (502) 905‑3708 Email for Analysis Schedule Online

📚 Related Kentucky Mortgage Resources

FHA Loan Requirements

Complete guide to FHA loan requirements, credit scores, and down payment options in Kentucky.

Read More →

Kentucky First-Time Buyer Programs

Discover all available Kentucky first-time home buyer programs including KHC, FHA, VA, and USDA options.

Read More →

FHA vs VA vs USDA Loans

Compare Kentucky's top government loan programs to find the best fit for your situation.

Read More →

Kentucky Housing Market 2025

Latest Kentucky real estate trends, home values, and market predictions for informed buying decisions.

Read More →

JL

Joel Lobb

Mortgage Broker – FHA, VA, USDA, KHC

EVO Mortgage · NMLS #57916 · Company NMLS #1738461

Joel Lobb has been helping Kentucky families navigate FHA loans and complex mortgage scenarios since 2003. As a licensed mortgage broker specializing in government loan programs, he provides expert guidance on FHA, VA, USDA, and Kentucky Housing Corporation loans throughout the Commonwealth.

📍 10602 Timberwood Circle Ste 3, Louisville, KY 40223

📞 Call/Text: 502‑905‑3708

✉️ kentuckyloan@gmail.com

🌐 KentuckyLoan.com

⚖️

Equal Housing Lender

Licensed in Kentucky | Member NMLS

📋 Important Disclosures & External Resources

Equal Housing Lender. All loans subject to credit approval, verification, and collateral evaluation. Programs, rates, and guidelines are subject to change without notice. Manufactured/mobile homes are ineligible as collateral.

Government Resources:

• HUD Handbook 4000.1 - Official FHA Guidelines
• Federal Housing Administration Official Website
• CFPB Home Buying Resources
• Kentucky Housing Corporation

Licensing Information: Joel Lobb, NMLS #57916. EVO Mortgage, NMLS #1738461. Licensed mortgage originator in Kentucky. Verify licensing at www.nmlsconsumeraccess.org

Educational Purpose: This article is for educational purposes only and does not constitute a commitment to lend. All borrowers must meet qualification requirements. HUD/FHA policy reference: Handbook 4000.1 § II.A.1.b.iii(A)

w3.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). Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.

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