Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Disputes on Credit Report and Kentucky Mortgage Lo...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Disputes on Credit Report and Kentucky Mortgage Lo...: 

Applying for a Kentucky Mortgage Soon? Don't Dispute that Account       Sounds counterintuitive, I'm sure ...       But until you...

 Got Dispute Comments on Your Credit Report? 

If you've disputed any accounts in the past, chances are your credit report still has dispute comments listed. That might seem harmless—but if you're applying for a mortgage, those comments could delay or even block your loan approval.

 Here’s what you can do:

1. Call each credit bureau (numbers on the graphic).

2. Ask to remove any dispute comments.

3. Verify they’re gone by pulling a fresh consumer credit report.

4. Follow up within 72 hours to confirm it’s been done.

Pro Tip: Do this before your lender pulls your credit. It could save time, stress, and keep your home loan on track.

If you’re not sure where to start, drop a comment or shoot me a message. I’m here to help walk you through the process!

#CreditTips #MortgageReady #HomeLoanHelp #KentuckyMortgage #JoelLobb #CreditRepair #HomebuyerTips #FHA #VA #USDA #KHC #CreditScoreMatters #NMLS57916 #EqualHousingLender

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.

Medical Debt Collections being Removed from Credit Reports

Medical Collections on Credit Report

The Consumer Financial Protection Bureau (CFPB) finalized a rule January 7, 2025 that will remove $49 billion in medical debt from credit reports, helping 15 million Americans! 

Here’s what’s changed: 

• Medical bills are no longer on credit reports – They won’t hurt your score anymore. 
• Lenders can’t use medical info in loan decisions. 
• Credit scores could rise – Many people will see a boost of points
•  More mortgage approvals

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

How does consumer credit counseling effects things on a Kentucky FHA or USDA loan in Kentucky ?

 KENTUCKY FHA GUIDELINES FOR CONSUEMR CREDIT COUNSELING

(J) Credit Counseling/Payment Plan (APPROVE/ELIGIBLE)Participating in a consumer credit counseling program does not require a downgrade to a manual underwriting.No explanation or other documentation is needed.

 

(K) Credit Counseling/Payment Plan (MANUAL UW) Participating in a consumer credit counseling program does not disqualify a Borrower from obtaining an FHA-insured Mortgage, provided the Mortgagee documents that:

• one year of the payout period has elapsed under the plan;
• the Borrower’s payment performance has been satisfactory and all required payments have been made on time; and
• the Borrower has received written permission from the counseling agency to enter into the mortgage transaction.

 

 

KENTUCKY RURAL HOUSING USDA GUIDELINES FOR CONSUMER CREDIT COUNSELING 

CONSUMER CREDIT COUNSELING - DEBT MANAGEMENT PLANS

Credit counseling provides guidance and support to consumers which may include assistance to negotiate with creditors on behalf of the borrower to reduce interest rates, late fees, and agree upon a repayment plan. The credit score will reflect the degradation of credit due to participation in this plan. Credit accounts that are included in the repayment plan may continue to report as delinquent or as late pays. This is typical and will not be considered as recent adverse credit. Lenders must retain documentation to support the accounts included in the debt management plan and the applicable monthly payment. Lenders must include the monthly payment amount due for the counseling plan in the monthly liabilities. GUS Accept/Accept with Full Documentation files: No credit exception is required. GUS Refer, Refer with Caution, and manually underwritten files: The following must be documented and retained in the lender’s permanent loan file: •One year of the payment period of the debt management plan has elapsed; •All payments have been made on time; and •Written permission from the counseling agency to recommend the applicant as acandidate for a new mortgage loan debt. •No credit exception is required

--

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

Disputes on Credit Report and Kentucky Mortgage Loan Approval?

Applying for a Kentucky Mortgage Soon?

Don't Dispute that Account

     Sounds counterintuitive, I'm sure ...

     But until you've talked to me (or your own local Mortgage Originator), don't even think about disputing an account found on your Credit Report.

     Why?  Unknowingly, you can be creating real problems for your Mortgage Application and Approval. 

     Consider this:  A creditor can refuse to change their disputed rating.  Too many disputed accounts on a Credit Report may result in your loan being denied.

     Is that a really a risk you want to run at such an important time?

     A formal dispute placed on a car loan, student loan, credit card, collection ... or even worse, a mortgage loan ... can cause havoc for your new Mortgage Application.  So ...

     Slow down.  Contact me ... and let's talk.  We'll analyze all your options and see what action is appropriate and in your best interest.  

     What is not commonly known:  Credit Bureaus and Automated Underwriting systems now reflect an evolution that has taken place over the last few years regarding credit disputes.  

     Both the Bureaus and Underwriting systems have been re-worked to recognize disputes as a negative impact and rating on a Borrower's "approvability" or "credit-worthiness".  

     But these changes have taken place without much fanfare and public recognition.  And because of that, hopeful Borrowers have all too often been contributing to the issues faced within their Mortgage Process later.     

     Prospective Mortgage Applicants (and the public in general) must be educated to this fact.  The temptation to dispute an account must be avoided, if hoping to finance a home via a Mortgage Loan soon.       

     If a Creditor offers-up a path to formally dispute your account ... just say no!  At least prior to our talking.

     There may be a better course of action available to you.  During our conversation we'll weigh your options and best course as it pertains to your Mortgage and your Approval.  

     But providing solid, written proof and evidence regarding your stance on the account in question, WITHOUT placing a formal "dispute" on said account is often the most prudent course of action ... 

     Remember:  You must have legitimate data and written proof in order to accomplish your goal successfully.  But when you have that proof, your account can be "re-rated" or the derogatory rating can be deleted from your Credit Report. 

     Any "correction" should come from the Creditor (Credit Card company/bank/etc.) and immediately sent to each of the 3 Credit Bureaus (Experian, TransUnion, Equifax).  

     This final step trips-up way too many, as it's assumed that the Creditor(s) will share the new updated information with the 3 Credit Bureaus.  They may or may not.  

     Bottomline:  It remains YOUR responsibility to inform each of the 3 Bureaus.  

     Play it safe and follow through with this important task, as it's in your best interest to see that it's successfully done.   

     When a correction is reported to the Bureaus, they will, in turn, update your Credit Report.  While each case is different (and I do not represent that all results will be successful or as hoped for) ... you may head off potential issues with your Mortgage Approval by acting pro-actively.  Consult with a Credit Repair Specialist if uncertain of corrective steps to be taken.

     In the modern Mortgage Process, the experience level of the Mortgage Originator you choose can't be understated.  Successful navigation through the steps of addressing credit disputes and credit analysis is just one example of this fact.

Equifax, Experian and TransUnion will also no longer include medical collection debt under at least $500 on credit reports

 Consumer Reporting Agencies to Remove Most Medical Debt From Credit Reports

The three nationwide credit reporting agencies, Equifax, Experian and TransUnion, announced that effective July 1, 2022, they will no longer include medical debt that was paid after it was sent to collections on consumer credit reports.

The companies’ CEOs provided a joint statement on the decision to change their approach to medical collection debt reporting:

“Medical collection debt often arises from unforeseen medical circumstances. These changes are another step we’re taking together to help people across the United States focus on their financial and personal wellbeing,” said Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion. “As an industry we remain committed to helping drive fair and affordable access to credit for all consumers.”

The time period before unpaid medical collection debt would appear on a consumer’s report will be increased from 6 months to one year, according to a press release, “giving consumers more time to work with insurance and/or healthcare providers to address their debt before it is reported on their credit file.”

In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical collection debt under at least $500 on credit reports.

The changes will remove nearly 70% of medical debt in collections accounts from consumer credit reports.

How do collections and charge offs on the credit report affect a Kentucky VA Mortgage Loan Approval?

In order to get approved for a Kentucky VA loan with outstanding collections and charge offs listed on

the credit report, the VA underwriter will want to know the following about them:

Collections & Charge Offs are two different things.  Below is what VA saying about them:

 

Collection Accounts

Isolated collection accounts do not necessarily have to be paid off as a condition for loan approval. A credit report may show numerous satisfactory accounts and one or two unpaid medical (or other) collections. In such instances, while it would be preferable to have collections paid, it would not necessarily be a requirement for loan approval.

However, collection accounts must be considered part of the borrower's overall credit history and unpaid collection accounts should be considered open, recent credit.

Borrowers with a history of collection accounts should have re-established satisfactory credit in order to be considered a satisfactory credit risk.

While VA does not require that collection accounts be paid-off prior to closing if the borrower's overall credit is acceptable, an underwriter must address the existence of the collection account(s) with an explanation on VA Form 26-6393, Loan Analysis, for excluding the negative credit history they represent.

If the collection account is listed on the credit report with a minimum payment, then the debt should be recognized at the minimum payment amount.

Charged off Accounts

These accounts are typically collections in which the creditor is no longer pursuing collection of the account. The underwriter must address the circumstances regarding the negative credit history when reviewing the overall credit of the borrower(s).

 

 
2 different topics best if you can send me credit to review. 

 

·         Charged off accounts generally ignored

·         Collection accounts on Federal debt are a big issue so we careful there

·         Collections not required to be paid off unless they are extremely high

·         Manual Underwrite we do require an LOE from Veteran for collections

·         What happened, what they did to resolve, what are they doing in the future to either resolve or to prevent this from happening and finally if they are going to enter into a payment plan or not.  Ultimately on the resolution of the collection the UW does not care but VA requires that as part of LOE.

 

Hope this helps send me credit for full evaluation.

 

The VA underwriter will want to verify the Kentucky Mortgage Veteran has the ability to pay these items or will want to know how they were paid off before closing.

Any collection or charge off showing as a judgement or lien on the VA mortgage applicant's credit report, must be paid before closing. These affect the title and must be paid before the mortgage is recorded.

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/

This website is not affiliated with any government agencies, including the VA. NMLS ID #57916 (www.nmlsconsumeraccess.org)