How to Get a Mortgage in Kentucky with Variable Income

 

How to Get a Mortgage in Kentucky with Variable Income (FHA, VA, USDA & Fannie Mae Guide)

Are you a commission-based, gig economy, or hourly wage worker wondering if your fluctuating income can get you approved for a mortgage in Kentucky? The answer is YES—with the right documentation and strategy. Here’s what you need to know to get approved with variable income for FHA, VA, USDA, and Fannie Mae loans in 2025.

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📌 What is Variable Income?

Variable income includes pay that changes monthly—like bonuses, overtime, tips, commissions, or self-employed earnings. Mortgage lenders require a history of income and proof that it's likely to continue.

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🏠 FHA Mortgage Guidelines

FHA loan Kentucky | FHA variable income | Kentucky mortgage approval

• 2 years of variable income history
• Income consistency required
• Documentation: W-2s, pay stubs, full tax returns

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🇺🇸 VA Loan Guidelines

VA loan Kentucky | veteran mortgage KY | variable income VA loan

• 1-2 years of consistent income
• Must pass residual income test
• Docs: Tax returns, LES, employer verification

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🌾 USDA Loan Guidelines

USDA loan Kentucky | rural mortgage KY | USDA income rules

• 12-24 months income history
• Stability must be documented
• Docs: 2 years of tax returns, YTD paystubs, VOE

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🏡 Fannie Mae (Conventional Loan) Guidelines

Conventional mortgage KY | Fannie Mae variable income

• Minimum 12 months history (24 preferred)
• Trending analysis required
• Docs: Pay stubs, tax returns, income verification

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📄 Tips for Getting Approved with Variable Income

• File taxes on time
• Keep consistent, accurate income records
• Avoid long income gaps
• Request an income stability letter from your employer

Bonus: Include side income if documented.

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👨‍💼 Advice from Kentucky Mortgage Expert – Joel Lobb

“As a Kentucky mortgage broker, I’ve helped hundreds of buyers get approved using commissions, bonuses, and gig work. The key is documentation and program selection.”

📞 (502) 905-3708
📧 kentuckyloan@gmail.com
🌐 www.mylouisvillekentuckymortgage.com
NMLS #57916 | Equal Housing Lender

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📊 Infographics & Visuals

• FHA Income Approval Chart
• VA Residual Income Chart
• USDA Income Verification Infographic
• Fannie Mae Trending Income Graphic

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🎯 Call to Action: Ready to Get Pre-Approved?

Let Joel Lobb and his team help you qualify using your variable income.

• ✔️ Free Pre-Approval
• ✔️ Same-Day Responses
• ✔️ Zero-Down Loan Options

Contact Joel Today:
www.mylouisvillekentuckymortgage.com
NMLS #57916 | www.nmlsconsumeraccess.org

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How the NAR Settlement Is Changing Kentucky Homebuyers Options for Mortgage Loan Approval

 On March 15th, 2024, the National Association of Realtors (NAR) agreed to pay $418 million in damages to settle some of their real estate commission lawsuits. The settlement prohibits NAR from requiring a seller's agent to engage in cooperative compensation with a buyer's agent.

The key details are:

• Date: March 15th, 2024
• Payment: NAR agreed to pay $418 million in damages
• Settlement terms: NAR prohibited from requiring seller's agent to cooperate with buyer's agent on commissions

This settlement is significant because the new terms will likely have ripple effects that both consumers and industry stakeholders will experience:

Consumers:

• Potentially lower real estate commission fees as a result of increased competition between agents
• More flexibility and control for sellers in how they compensate buyer's agents
• Possibility of buyers having to pay their agent's fees directly rather than them being bundled into the home price

Industry Stakeholders:

• Real estate brokerages and agents may need to adjust their business models and commission structures
• Reduced influence of NAR in setting industry standards and practices around commissions
• Potential for new business models and pricing approaches to emerge in the real estate market

Overall, this settlement represents a shift in the power dynamics of the real estate industry that could lead to more competition and consumer-friendly changes in the way real estate transactions are conducted. Let me know if you have any other questions!

Real Estate Commissions and Loan Types in Kentucky

The National Association of Realtors (NAR) recently reached a settlement that impacted real estate commissions for different mortgage loan types in Kentucky and across the United States. Here's a breakdown of how commissions can vary:

Conventional Loans

• For conventional mortgage loans, the typical real estate commission is 3-6% of the home's sale price.

• This commission is usually split evenly between the buyer's agent and the seller's agent.

• Buyer may pay their Agent's reasonable commissions or have the seller or agent constructio to the commission of the buyer agents' commission.  Typical fees paid by the seller are not subject to the IPC limits.  (interested party contribution)

FHA Loans

• For FHA (Federal Housing Administration) loans, the real estate commission is typically slightly lower, around 3-6% of the sale price.

• This lower commission is due to the additional requirements and paperwork involved with FHA loans.

• FHA Loans-FHA allows buyer to pay commissions of their agents, or negotiate the seller's or agent contribution to commission to the buyer's agent. – If the State and Local law or custom permits this, and if the commissions and fees are reasonable in amount, the existing policy would not treat it as an IPC. (interested party contribution)

VA Loans

• For VA (Veterans Affairs) loans, the real estate commission is usually the lowest, around 3-6% of the sale price.

• VA loans have strict guidelines, and the lower commission helps offset some of the additional costs associated with these loans.

• VA Loans-Buyer may pay their agent's commission or negotiate the seller or  agents contribution to commission to the buyer's agent.  (interested party contribution) IPC is not mentioned. A temporary variance is permitted for the Veteran buyer to pay Buyer Broker Fees.

USDA Loans

• USDA (United States Department of Agriculture) loans, which are designed for low-income homebuyers in rural areas, also typically have a real estate commission of 3-6%.

• The lower commission helps make these loans more affordable for the homebuyers.

• USDA loans-Buyer may pay their agents commission or negotiate the seller's or agent's contribute to the commission of the buyer's agent. Real Estate Commission Fees are excluded from the 6% cap for IPC concessions

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Interested Party Contributions: On April 15, Fannie Mae and Freddie Mac announced that they will not count buyer’s agent commissions as part of their allowable interested party contributions (IPCs). This is not an update to their selling guides, but a clarification on how seller-paid real estate agent fees are treated. Fannie/Freddie guidelines allow sellers to contribute 2-9% of the property value toward the borrower’s closing costs. In their announcement, Fannie and Freddie stated that “fees or costs customarily paid by the property seller according to local convention are not subject to these financing concessions limits.”

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•  The new terms outlined in this settlement will have ripple effects that both consumers and industry stakeholders will likely experience.

• The consumer impact:

  Consumers may feel more pressured to finance the broker’s commission into their loan. This could negatively impact underserved, low-to moderate-income, and first-time borrowers who may not have the necessary means to fund a buyer’s commission out of pocket.

• Higher mortgage costs:

  Financing the buyer-broker commission into the loan poses challenges to the Section 32 points & fees test, which could lead to an increase in higher-cost mortgages and non-qualified mortgage (QM) loans.

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On March 15th, 2024, the National Association of Realtors (NAR) agreed to pay $418 million in damages to settle some of their real estate commission lawsuits. The settlement prohibits NAR from requiring a seller's agent to engage in cooperative compensation with a buyer's agent.

The key details are:

• Date: March 15th, 2024
• Payment: NAR agreed to pay $418 million in damages
• Settlement terms: NAR prohibited from requiring seller's agent to cooperate with buyer's agent on commissions

This settlement is significant because the new terms will likely have ripple effects that both consumers and industry stakeholders will experience:

Consumers:

• Potentially lower real estate commission fees as a result of increased competition between agents
• More flexibility and control for sellers in how they compensate buyer's agents
• Possibility of buyers having to pay their agent's fees directly rather than them being bundled into the home price

Industry Stakeholders:

• Real estate brokerages and agents may need to adjust their business models and commission structures
• Reduced influence of NAR in setting industry standards and practices around commissions
• Potential for new business models and pricing approaches to emerge in the real estate market

Overall, this settlement represents a shift in the power dynamics of the real estate industry that could lead to more competition and consumer-friendly changes in the way real estate transactions are conducted. Let me know if you have any other questions!

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Reach out to me anytime on my cell --  Always happy to help!

Joel Lobb  Mortgage Loan Officer NMLS 57916

EVO Mortgage
 911 Barret Ave, Louisville, KY 40204
Company NMLS ID # 173846

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

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NMLS 57916  | Company NMLS #173846

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).