I specialize in Kentucky First Time Homebuyers FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans. I have helped over 900 Kentucky families buy their first home and refinance their current mortgage for a lower rate; Kentucky First time buyers $0 down still available with 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 ID 1364
Pages
- 4 Things Required for a KY Mortgage Loan Approval
- Down Payment Assistance Kentucky 2024 Kentucky Housing Corporation KHC
- Credit Scores Required For A Kentucky Mortgage Loan Approval in 2024
- Kentucky First-time Home Buyer Programs
- Kentucky FHA Mortgage Information
- Kentucky VA Mortgage Loan Information
- USDA Rural Housing Kentucky Loan Information
- Zero Down Kentucky Mortgages
- First-time Home-buyers in Kentucky
- Documents Needed Mortgage Approval in Kentucky
- Free Credit Score Booklet
- Do's & Dont's before closing:
- Closing Costs Kentucky Mortgage
- Lock Kentucky Mortgage Loan Rate
- Home Inspections Kentucky
- Home
- Accessibility Statement
- Legal / Privacy Policy / Accessibility Statements
Louisville Kentucky VA Home Loan Mortgage Lender: Louisville Kentucky Mortgage Lender VA Home Loans
Kentucky Housing Corporation (KHC) Down Payment Assistance.
Kentucky Down payment assistance loans are available up to $10,000 for Mortgage
KHC is used for mostly applicants in Kentucky that don't have access to money for a down payment on their home.
- .
KENTUCKY HOUSING QUALIFYING CRITERIA FOR DOWN PAYMENT ASSISTANCE
$10,000 available thru KHC for down payment assistance KY
What is Kentucky Housing?
Kentucky Housing is a trusted state agency in Frankfort, KY that works with local lenders to ensure all Kentucky home buyers have access to safe and affordable housing with access to down payment assistance help and counseling if needed to buy a home.
Do I need to be a first-time home buyer to do a KHC loan?
No, you do not have to be a first time home buyer with KHC loans.
How much down payment assistance can I get to buy a home in Kentucky?
What is Kentucky Housing?
Kentucky Housing is a trusted state agency in Frankfort, KY that works with local lenders to ensure all Kentucky home buyers have access to safe and affordable housing with access to down payment assistance help and counseling if needed to buy a home.
Do I need to be a first-time home buyer to do a KHC loan?
No, you do not have to be a first time home buyer with KHC loans.
How much down payment assistance can I get to buy a home in Kentucky?
Can I use the $10,000 for repairs to the home or buy stuff for the home?
No you cannot! The down payment assistance can be used for down payment, closing costs and prepaids.
How long can I lock a KHC Loan?
You can lock a KHC Loan for 45 days
How long does it take to close a KHC loan?
It takes about 30 to 45 days typically to close a KHC loan.
Can I just get a down payment assistance loan from Kentucky Housing?
In order to use the down payment assistance programs from KHC, you must do the first mortgage loan with them too. Additional eligibility requirements may apply, including income limits.
What if I have bad credit and I get a KHC loan?
Kentucky Housing loans require a minimum 620 credit score. The usually follow agency guidelines for credit, bankruptcy, foreclosure, collections, etc depending on it is FHA, VA, USDA, Fannie Mae.
Can I build a home with a KHC loan?
Kentucky Housing does not provide temporary construction loans, but we can provide the permanent financing for a new construction property with one of your loan programs including FHA, VA, USDA, or Fannie Mae.
How much can the house cost for a KHC Loan?
Our current purchase price limits are $346,644 in the state of Kentucky Consult your lender to determine the amount you are approved to borrow in regards to agency debt to income ratios requirements. KHC typically will not go above 40% for the front-end housing ratio, or over 50% for the total debt to income ratio. They will make exceptions sometimes.
What is the required down payment for a KHC Loan?
Required down payments range from 0-3.5% depending on the underlying loan product (Conventional, FHA, RD, VA).
Is a co-signer allowed on a KHC Loan?
KHC does not allow for co-signers to qualify for a mortgage loan
Can I finance improvements or repairs?
KHC does not offer rehab loans or 203k loans, or Renovation loans.
Are there income limits based on gross or net income for a KHC?
Gross household income limits for total household income.
Can I finance a manufactured or mobile home with KHC?
Manufactured and mobile homes are eligible under some mortgage products for KHC Loans. Homes must be double-wide, permanently attached to a foundation, and taxed as real estate (not personal property). Consult your lender for more information.
Can I use the $10,000 for repairs to the home or buy stuff for the home?
No you cannot! The down payment assistance can be used for down payment, closing costs and prepaids.
How long can I lock a KHC Loan?
You can lock a KHC Loan for 45 days
How long does it take to close a KHC loan?
It takes about 30 to 45 days typically to close a KHC loan.
Can I just get a down payment assistance loan from Kentucky Housing?
In order to use the down payment assistance programs from KHC, you must do the first mortgage loan with them too. Additional eligibility requirements may apply, including income limits.
What if I have bad credit and I get a KHC loan?
Kentucky Housing loans require a minimum 620 credit score. The usually follow agency guidelines for credit, bankruptcy, foreclosure, collections, etc depending on it is FHA, VA, USDA, Fannie Mae.
Can I build a home with a KHC loan?
Kentucky Housing does not provide temporary construction loans, but we can provide the permanent financing for a new construction property with one of your loan programs including FHA, VA, USDA, or Fannie Mae.
How much can the house cost for a KHC Loan?
Our current purchase price limits are $346,644 in the state of Kentucky Consult your lender to determine the amount you are approved to borrow in regards to agency debt to income ratios requirements. KHC typically will not go above 40% for the front-end housing ratio, or over 50% for the total debt to income ratio. They will make exceptions sometimes.
What is the required down payment for a KHC Loan?
Required down payments range from 0-3.5% depending on the underlying loan product (Conventional, FHA, RD, VA).
Is a co-signer allowed on a KHC Loan?
KHC does not allow for co-signers to qualify for a mortgage loan
Can I finance improvements or repairs?
KHC does not offer rehab loans or 203k loans, or Renovation loans.
Are there income limits based on gross or net income for a KHC?
Gross household income limits for total household income.
Can I finance a manufactured or mobile home with KHC?
Manufactured and mobile homes are eligible under some mortgage products for KHC Loans. Homes must be double-wide, permanently attached to a foundation, and taxed as real estate (not personal property). Consult your lender for more information.
Kentucky Down payment assistance loans are available up to $10,0000 for Mortgage
KHC recognizes that down payments, closing costs, and prepaids are stumbling blocks for many potential home buyers. We offer a special loan program to help with those. Your KHC-approved lender can help you apply.
KHC recognizes that down payments, closing costs, and prepaids are stumbling blocks for many potential home buyers. We offer a special loan program to help with those. Your KHC-approved lender can help you apply.
Regular DAP
- Purchase price up to $349,525 with Secondary Market.
- Assistance in the form of a loan up to $10,000 in $100 increments.
- Repayable over a 10-year term at 3.75 percent.
- Available to all KHC first-mortgage loan recipients.
- Purchase price up to $349,525 with Secondary Market.
- Assistance in the form of a loan up to $10,000 in $100 increments.
- Repayable over a 10-year term at 3.75 percent.
- Available to all KHC first-mortgage loan recipients.
More About Down Payment and Closing Costs
- No liquid asset review and no limit on borrower reserves.
- Specific credit underwriting standards may apply to down payment programs.
- .
- No liquid asset review and no limit on borrower reserves.
- Specific credit underwriting standards may apply to down payment programs.
- .
SECONDARY MARKET FUNDING SOURCE
- Borrower must meet KHC’s Secondary Market Income Limits
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (charter coverage)
- All KHC DAPs applicable
- No minimum borrower contribution
- No reserves required
- 80 percent AMI income
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (standard coverage)
- All KHC DAPs applicable
- No minimum borrower contribution
- No reserves required
- Secondary Market Income limits apply
- Insured by the Federal Housing Administration
- 3.5 percent down payment
- All KHC DAPs applicable
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
Refinance Options (Available only through Secondary Market)
- Credit qualifying Streamline Refinance and Rate/Term Refinance
- Insured by the Federal Housing Administration
- Cash back to borrower not to exceed $500
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
- Guaranteed by the Veterans Administration for qualified military veterans
- No down payment if the property appraises for the sales price or greater
- All KHC DAPs applicable
- Minimum credit score of 620
- No monthly mortgage insurance payments
Refinance Options (Available only through Secondary Market)
- VA IRRRL
- 620 minimum credit score
- No appraisal required
- 30-year term
- VA existing loan
- Guaranteed by Rural Housing Services (RHS)
- Home must be located in a rural area as defined by RHS
- No down payment if the property appraises for the sales price or greater
- All KHC DAPs applicable
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
Refinance Options (Available only through Secondary Market)
- RHS Streamlined-Assist Refinance Program
- 620 minimum credit score
- No appraisal required
- Must have made timely mortgage payments for the last 12 months
- 30-year term
- RHS existing 502 guaranteed loan
KENTUCKY HOUSING CORPORATION
2021 SECONDARY MARKET
GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS
Effective May 1, 2021
Secondary Market Purchase Price Limit — $346,644
- Borrower must meet KHC’s Secondary Market Income Limits
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (charter coverage)
- All KHC DAPs applicable
- No minimum borrower contribution
- No reserves required
- 80 percent AMI income
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (standard coverage)
- All KHC DAPs applicable
- No minimum borrower contribution
- No reserves required
- Secondary Market Income limits apply
- Insured by the Federal Housing Administration
- 3.5 percent down payment
- All KHC DAPs applicable
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
Refinance Options (Available only through Secondary Market)
- Credit qualifying Streamline Refinance and Rate/Term Refinance
- Insured by the Federal Housing Administration
- Cash back to borrower not to exceed $500
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
- Guaranteed by the Veterans Administration for qualified military veterans
- No down payment if the property appraises for the sales price or greater
- All KHC DAPs applicable
- Minimum credit score of 620
- No monthly mortgage insurance payments
Refinance Options (Available only through Secondary Market)
- VA IRRRL
- 620 minimum credit score
- No appraisal required
- 30-year term
- VA existing loan
- Guaranteed by Rural Housing Services (RHS)
- Home must be located in a rural area as defined by RHS
- No down payment if the property appraises for the sales price or greater
- All KHC DAPs applicable
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
Refinance Options (Available only through Secondary Market)
- RHS Streamlined-Assist Refinance Program
- 620 minimum credit score
- No appraisal required
- Must have made timely mortgage payments for the last 12 months
- 30-year term
- RHS existing 502 guaranteed loan
KENTUCKY HOUSING CORPORATION
2021 SECONDARY MARKET
GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS
Effective May 1, 2021
Secondary Market Purchase Price Limit — $346,644
Down payment Assistance for Kentucky Homebuyers $10,000 Through KHC
Down Payment Assistance Housing Programs for Kentucky First Time Home Buyers
$10,000 Down Payment assistance from Kentucky Housing Below see details below for restrictions:
@kentuckymortgagebroker #kentuckymortgage #ficoscore #firsttimehomebuyer #homeloan #homeloan #zerodownpayment #vamortgage #vamortgage #khcloan #usdaloan #ruralhousing #mortgagetips #fha ♬ Synchronize (Instrumental) - Milky Chance
KHC recognizes that down payments, closing costs, and prepaids are stumbling blocks for many potential home buyers. We offer a special loan program to help with those. Your KHC-approved lender can help you apply.
Regular DAP
- Purchase price up to $349,525 with Secondary Market.
- Assistance in the form of a loan up to $10,000 in $100 increments.
- Repayable over a 10-year term at 3.75 percent.
- Available to all KHC first-mortgage loan recipients.
More About Down Payment and Closing Costs
- No liquid asset review and no limit on borrower reserves.
- Specific credit underwriting standards may apply to down payment programs.
Secondary Market Eligibility
To qualify for a Secondary Market KHC loan, you must meet the following requirements:
- Meet Secondary Market Income Limits for your county.
- Be a U.S. citizen, other national or qualified alien person
- Have a minimum credit score of 620.
- Be a first-time or repeat homebuyer.
Property Eligibility
The home you wish to purchase must meet the following guidelines.
- Borrower must occupy the home within 60 days of closing and for duration of loan.
- New or previously occupied detached, single-family home.
- New or previously occupied condominium, townhouse, or attached unit in a planned unit development.
- Check with lender for eligible condominiums.
- New or previously occupied manufactured housing, single or double wide, permanently affixed to the foundation and taxed as real estate
- Must meet loan type's foundation requirements.
- The property purchased must be in Kentucky.
Secondary Market Funding Source
- First-time and repeat homebuyers statewide
- 30-year fixed interest rate
- Principal residence ONLY
- Purchase Price Limit: $349,525
- Borrower must meet KHC's Secondary Market Income Limits
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (charter coverage)
- KHC DAP applicable
- No minimum borrower contribution
- No reserves required
- 80 percent AMI income
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (standard coverage)
- KHC DAP applicable
- No minimum borrower contribution
- No reserves required
- Secondary Market Income limits apply
- Insured by the Federal Housing Administration
- 3.5 percent down payment
- KHC DAP applicable
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
Refinance Options (Available only through Secondary Market)
- Credit qualifying Streamline Refinance and Rate/Term Refinance
- Insured by the Federal Housing Administration
- Cash back to borrower not to exceed $500
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
- Guaranteed by the Veterans Administration for qualified military veterans
- No down payment if the property appraises for the sales price or greater
- KHC DAP applicable
- Minimum credit score of 620
- No monthly mortgage insurance payments
- VA IRRRL
- 620 minimum credit score
- No appraisal required
- 30-year term
- VA existing loan
Purchase Price Limitations
Secondary Market First Mortgage Programs and KHC's Homebuyer Tax Credit
Secondary Market New and Existing Homes................$349,525
KHC's Homebuyer Tax Credit.......................................$349,525
What is a good FICO Score for Mortgage Loan Approval?
What is a good FICO Score for Mortgage Loan Approval?
FICO Scores generally range from 300 to 850, where higher scores demonstrate lower credit risk and lower scores demonstrate higher credit risk (note: some types of FICO® Scores have a slightly broader range).
The chart below provides a breakdown of ranges for FICO® Scores found across the U.S. consumer population. Again, each lender has its own credit risk standards, but this chart can serve as a general guide of what a FICO® Score represents.
Kentucky Mortgage Rates and Home Loan Options
Kentucky Mortgage Rates and Home Loan Options
Kentucky is known for its native bluegrass pastures, thoroughbred horses, and bluegrass music. It's also estimated that one-third of all bourbon produced comes from the State of Kentucky. Its two largest metropolitan areas are the cities of Louisville and Lexington, the former being the home of the world's most famous horse race, the Kentucky Derby.
For those who don't fancy themselves bourbon fans or sport enthusiasts there are still many options for lively entertainment in Kentucky. And just as many options when it comes to settling down, owning a home, and finding a loan with a great mortgage rate.
The more you know, the better equipped you will be to understand the qualifying requirements from some of the lenders in Kentucky. Most require financial documentation, while others have a more relaxed underwriting process.
It helps to be educated when shopping for your new home loan, and the best place to find out more about current mortgage rates and loan options in Kentucky is right here at lendingtree.com.
Mortgage Interest Rates on Kentucky FHA Loans
The FHA insured loan program provides many borrowers with competitive mortgage interest rates and an excellent loan option with which to purchase a home. Those who don't have a bundle to spend on down payments can use an FHA insured loan through a local lending partner to obtain financing up to 96.5 percent of the purchase price of the home with loan amounts up to $417,000.
To achieve even lower mortgage rates, those who can manage a larger down payment can get a conventional loan through traditional Kentucky lenders. These loans offer the lowest possible interest rates to both existing and new homeowners.
Jumbo Loan Options in Kentucky
If you need a loan that is larger than the conforming loan limit, chances are you'll be getting a jumbo loan. These loans are offered through most local and statewide lenders and those with good credit and income levels large enough to qualify can obtain a jumbo loan at market mortgage rates or just slightly above. They frequently carry higher mortgage interest rates due to the increase risk associated with the larger loan amount.
Assistance with Down Payment, Closing Costs, and KY Mortgage Rates
Government agencies, like the Kentucky Housing Corporation, can provide education materials and counseling for those wishing to own a home in the state of Kentucky. These agencies also offer loan programs through its lender partners in which buyers can tap into one of the following:
• VA Loan - guaranteed by the Veterans Administration for qualified military veterans. Offers no down payment if the property appraises for the sale price or greater, has flexible underwriting is flexible, and no monthly mortgage insurance payments and no minimum credit score requirements. Lenders however will create overlays to require a 620 credit score for most VA mortgage loan approvals nowadays with Automated Underwriting through DO/DU
• Conventional loans – with as little as three percent down payment (lower than FHA requirements) yet still covered by and approved mortgage insurance company. This loan is for those with a credit score of 680 or better, offering quick turnaround time and no up-front mortgage insurance payments.
-
4 Things Required for a KY Mortgage Loan Approval
Understanding Mortgage mortgage underwriting guidelines
Now that you have found your dream house, you are going to need to apply for a Louisville Mortgage mortgage loan. Your Realtor will either recommend a banking institution or you may already have one in mind.
You will be dealing with a loan officer who will be compiling all the data on you to see if you qualify for a loan to pay for this house. All lending institutions have different Underwriting Guidelines set in place when reviewing a borrower's financial history to determine the likelihood of receiving on-time payments. The primary items reviewed are the following 5 areas below:
1. Income
2. Debt
3. Credit History
4. Savings
5. Debt vs Income Ratio
Income is one of the most important variables a lender will examine because it is used to repay the loan. Income is reviewed for the type of work, length of employment, educational training required, and opportunity for advancement. An underwriter will look at the source of income and the likelihood of its continuance to arrive at a gross monthly figure.
Salary and Hourly Wages - Calculated on a gross monthly basis, prior to income tax deductions.
Part-time and Second Job Income - Not usually considered unless it is in place for 12 to 24 straight months. Lenders view part-time income as a strong compensating factor.
Commission, Bonus and Overtime Income - Can only be used if received for two previous years. Further, an employer must verify that it is likely to continue. A 24-month average figure is used.
Retirement and Social Security Income - Must continue for at least three years into the future to be considered. If it is tax free, it can be grossed up to an equivalent gross monthly figure. Multiply the net amount by 1.20%.
Alimony and Child Support Income - Must be received for the 12 previous months and continue for the next 36 months. Lenders will require a divorce decree and a court printout to verify on-time payments.
Notes Receivable, Interest, Dividend and Trust Income - Proof of receiving funds for 12 previous months is required. Documentation showing income due for 3 more years is also necessary.Rental Income - Cannot come from a Primary Residence roommate. The only acceptable source is from an investment property. A lender will use 75% of the monthly rent and subtract ownership expenses. The Schedule E of a tax return is used to verify the figures. If a home rented recently, a copy of a current month-to-month lease is acceptable.
Automobile Allowance and Expense Account Reimbursements - Verified with 2 years tax returns and reduced by actual expenses listed on the income tax return Schedule C.
Education Expense Reimbursements - Not considered income. Only viewed as slight compensating factor.
Self Employment Income - Lenders are very careful in reviewing self-employed borrowers. Two years minimum ownership is necessary because two years is considered a representative sample. Lenders use a 2-year average monthly income figure from the Adjusted Gross Income on the tax returns. A lender may also add back additional income for depreciation and one-time capital expenses. Self-employed borrowers often have difficulty qualifying for a mortgage due to large expense write offs. A good solution to this challenge used to be the No Income Verification Loan, but there are very few of these available any more given the tightened lending standards in the current economy. NIV loan programs can be studied in the Mortgage Program section of the library.
An applicant's liabilities are reviewed for cash flow. Lenders need to make sure there is enough income for the proposed mortgage payment, after other revolving and installment debts are paid.
All loans, leases, and credit cards are factored into the debt calculation. Utilities, insurance, food, clothing, schooling, etc. are not.
If a loan has less than 10 months remaining, a lender will usually disregard it.
The minimum monthly payment listed on a credit card bill is the figure used, not the payment made.
An applicant who co-borrowed for a friend or relative is accountable for the payment. If the applicant can show 12 months of on-time cancelled checks from the co-borrower, the debt will not count.
Loans can be paid off to qualify for a mortgage, but credit cards sometimes cannot (varies by lender). The reasoning is that if the credit card is paid off, the credit line still exists and the borrower can run up debt after the loan is closed.
A borrower with fewer liabilities is thought to demonstrate superior cash management skills.
Most lenders require a residential merged credit report (RMCR) from the 3 main credit bureaus: Trans Union, Equifax, and Experian. They will order one report which is a blending of all three credit bureaus and is easier to read than the individual reports. This "blended" credit report also searches public records for liens, judgments, bankruptcies and foreclosures. See our credit report index.
Credit report in hand, an underwriter studies the applicant's credit to determine the likelihood of receiving an on-time mortgage payment. Many studies have shown that past performance is a reflection of future expectations. Hence, most lenders now use a national credit scoring system, typically the FICO score, to evaluate credit risk. If you're worried about credit scoring see our articles on it.
The mortgage lending process, once very forgiving, has tightened lending standards considerably. A person with excellent credit, good stability, and sufficient documentable income to make the payments comfortably will usually qualify for an "A" paper loan. "A Paper", or conforming loans, make up the majority of loans in the U.S. and are loans that must conform to the guidelines set by Fannie Mae or Freddie Mac in order to be saleable by the lender. Such loans must meet established and strict requirements regarding maximum loan amount, down payment amount, borrower income and credit requirements and suitable properties. Loans that do not meet the credit and/or income requirements of conforming "A-paper" loans are known as non-conforming loans and are often referred to as "B", "C" and "D" paper loans depending on the borrower’s credit history and financial capacity.
Here are some rules of thumb most lenders follow:
12 plus months positive credit will usually equal an A paperloan program, depending on the overall credit. FHA loans usually follow this guideline more often than conventional loans.
Unpaid collections, judgments and charge offs must be paid prior to closing an A paper loan. The only exception is if the debt was due to the death of a primary wage earner, or the bill was a medical expense.
If a borrower has negotiated an acceptable payment plan, and has made on time payments for 6 to 12 months, a lender may not require a debt to be paid off prior to closing.
Credit items usually are reported for 7 years. Bankruptcies expire after 10 years.
Foreclosure - 5 years from the completion date. From the fifth to seventh year following the foreclosure completion date, the purchase of a principal residence is permitted with a minimum 10% down and 680 FICO score. The purchase of a second or investment property is not permitted for 7 years. Limited cash out refinances are permitted for all occupancy types.
Pre-foreclosure (Short Sale) - 2 years from the completion date (no exceptions or extenuating circumstances).
Deed-in-Lieu of Foreclosure - 4 year period from the date the deed-in-lieu is executed. From the fifth to the seventh year following the execution date the borrower may purchase a property secured by a principal residence, second home or investment property with the greater of 10 percent minimum down payment or the minimum down payment required for the transaction. Limited cash out and cash out refinance transactions secured by a principal residence, second home or investment property are permitted pursuant to the eligibility requirements in effect at that time.
Chapter 7 Bankruptcy - A borrower is eligible for an A paper loan program 4 years after discharge or dismissal, provided they have reestablished credit and have maintained perfect credit after the bankruptcy.
Chapter 13 Bankruptcy - 2 years from the discharge date or 4 years from the dismissal date.
Multiple Bankruptcies- 5 years from the most recent dismissal or discharge date for borrowers with more than one filing in the past 7 years.
The good credit of a co-borrower does not offset the bad credit of a borrower.
Credit scores usually range from 400 to 800. Changes to lending standards are occurring on a daily basis as a result of tightening lending standards, and can vary from lender-to-lender-- so this information should be considered simply a guideline. For conforming loans, most lenders will lend down to a FICO of 620, with additional rate hits for the lower-end credit scores and loan-to-values. When you are borrowing more than 80%, they typically will not lend if you have a FICO below 680. The FHA/VA program just changed their minimum required FICO to 620, unless you are qualifying a borrower with non-traditional credit. The few non-conforming loan programs that are still available typically require 30% down payment with a minimum FICO of 700 for self-employed and 650 for W-2 employees, and the loan-to-value will change with the loan amount.
Lenders evaluate savings for three reasons.
The more money a borrower has after closing, the greater the probability of on-time payments.
Most loan programs require a minimum borrower contribution.
Lenders want to know that people have invested their own into the house, making it less likely that they will walk away from their life's savings. They analyze savings documents to insure the applicant did not borrow the funds or receive a gift.
Lenders look at the following types of accounts and assets for down payment funds:
Checking and Savings - 90 days seasoning in a bank account is required for these funds.Gifts and Grants - After a borrower's minimum contribution, a gifts or grant is permitted.
Sale of Assets - Personal property can be sold for the required contribution. The property should be appraised and a bill of sale is required. Also, a copy of the received check and a deposit slip are needed.
Secured Loans - A loan secured by property is also an acceptable source of closing funds.
IRA, 401K, Keogh & SEP - Any amount that can be accessed is an acceptable source of funds.
Sweat Equity and Cash On Hand - Generally not acceptable. FHA programs allow it in special circumstances.
Sale Of Previous Home - Must close prior to new home for the funds to be used. A lender will ask for a listing contract, sales contract, or HUD 1 closing statement.
The percentage of one's debt to income is one of the most important factors when underwriting a loan. Lenders have determined that a house payment should not exceed approximately 30% of Gross Monthly Income. Gross Monthly Income is income before taxes are taken out. Furthermore, a house payment plus minimum monthly revolving and installment debt should be less than 40% of Gross Monthly Income (this figure varies from 35%-41% contingent on the source of financing).
Example
An applicant has $4,500 gross monthly income. The maximum mortgage payment is:
$4500 X .30 = $1350
Their total debts come to:
$500 Car
$20 Visa
$30 Sears
$75 Master Card
----------------
$625 per month.
Remember, their total debts (mortgage plus other debts) must be less than or equal to 40% of their gross monthly income.
$2,800 X .40 = $1800
$1800 is the maximum debt the borrower can have, debts and mortgage payments combined. Can the borrower keep all their debts and have the maximum mortgage payment allowed? NO!
In this case, the borrower, since they have high debts, must adjust the maximum mortgage payment downward, because:
$625 debts
$1350 mortgage
-------------
$1975 - which is more than the $1800 (40% of gross debt) we calculated above.
The maximum mortgage payment is therefore:
$1800 - $625 (monthly debt) = $1175.
Some restrictions apply. Ask for details. Loan decision is subject to satisfactory appraisal and title review and no change in financial condition. This is not an offer for extension of credit or a commitment to lend. Equal Housing Opportunity.
This communication is provided to you for informational purposes only and should not be relied upon by you.
Joel Lobb (NMLS#57916)
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
Text/call 502-905-3708
kentuckyloan@gmail.com
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/
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Qualifying for A VA Home Loan in KY
1. Income
You need income. You need to be able to afford the home. But what is acceptable income? Let’s just say that there are two ratios mortgage underwriters look at to qualify you for mortgage payment:
First Ratio – The first ratio, top ratio or housing ratio. Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment. The housing payment consists of Principle, Interest, Taxes and Insurance. Whether you escrow or not every one of these items are factored into your ratio. There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.
Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has. So, it includes housing payment as well as every other debt that a borrower may have. This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on. Again, if you’re paying less than 45% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe. You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.
What qualifies as income? Basically, it’s income that has at least a proven, two year history of being received and pretty high assurances that the income is likely to continue for at least three years. What’s not acceptable? Unverifiable cash income, short term income and income that’s not likely to continue like unemployment income, student loan aid, VA education benefits, or short term disability are not allowed for a mortgage loan.
2. Assets
What the mortgage underwriter is looking for here is how much can you put down and secondly, how much will you have in reserves after the loan is made to help offset any financial emergencies in the future.
Do you have enough assets to put the money forth to qualify for the down payment that the particular program asks for. The only 100% financing or no money down loans still available in Kentucky for home buyers are available through USDA, VA, and KHC or Kentucky Housing Loans. Most other home buyers that don’t qualify for the no money down home loans mentioned above, will turn to the FHA program. FHA loans currently requires a 3.5% down payment.
Kentucky Home buyers that have access to putting down at least 5% or more, will usually turn to Fannie Mae or Freddie Mac mortgage programs so they can get better pricing when it comes to mortgage insurance.
These assets need to be validated through bank accounts, 401k or retirements account and sometimes gifts from relatives or employer.. Can you borrower the down payment? Sometimes. Generally if you’re borrowing a secured loan against a secured asset you can use that. But rarely can cash be used as an asset. FHA will allow for gifts from relatives for down payments with little as 3.5% down but Fannie Mae will require a 20% down payment when a gift is being used for the down payment on the home.
3. Credit Scores
- Kentucky FHA Mortgage loan credit score requirements:
- The minimum credit score is 500 for Kentucky FHA loans. However please keep in mind these two things: 1. Lenders credit their own overlays to increase the credit score threshold, most being 620, and secondly, if your credit score is below 580, you would need 10% minimum down payment, and if the credit score is over 580, then you can go with the minimum 3.5% down payment.
- Obviously if you have a higher credit score, this will increase your chances of getting approved for a Kentucky FHA Mortgage and possibly better rates and closing costs options.
- Kentucky VA Mortgage loans requirements :
- VA does not have a minimum credit score requirement, but if the credit score is below 620 few lenders will do the loan, but I am set up with several Kentucky VA lenders where I have closed them down to a 560 credit score, but the borrower had good compensating factors such as: large down payment, low dti ratios, good job history and good residual income with no previous bankruptcies or foreclosures.
- I would suggest if your credit scores are below 580, I would suggest on working on getting the scores up before you applied for a VA mortgage loan.
- A lot of lenders will do a rapid rescore which in some cases can increase your credit scores in as little as 7-10 working days.
- The federal Department of Veterans Affairs (VA) guarantees loans for current and former members of the military and their families. VA loans provide very favorable terms to eligible borrowers and have limited qualifying requirements. You can get a VA loan with no down payment so long as the home isn’t worth more than you pay for it, and there’s no minimum credit score to qualify. You also don’t have to pay for mortgage insurance, although you do have to pay an up-front funding fee of of between .5% and 3.3% of the loan amount unless you fall within an exception for disabled vets or military widows or widowers.
- Kentucky USDA Mortgage credit score requirements:
- According to their guidelines, USDA does not have a minimum credit score, but most lenders will want a 640 credit score. USDA uses an online system to underwrite the risk of the loan, and scores under 640 are very difficult to get approved.
- Validating the Credit Score. Two or more eligible tradelines are necessary to validate an applicant’s credit report score. Eligible tradelines consist of credit accounts (revolving, installment etc.) with at least 12 months of repayment history reported on the credit report. At least one applicant whose income or assets are used for qualification must have a valid credit report score
- The Rural Housing Service (RHS) operates under the federal Department of Agriculture to guarantee loans for rural home-buyers with limited income who can’t obtain conventional financing. The upside is that Kentucky USDA loans require no down payment. The downside is that they charge a steep up-front fee of 1% of the loan amount (which can be paid off over the entire loan term) and an annual fee of 0.35%.
4. Appraisal
Generally, there’s nothing you can do to affect this. Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?” If not, then not good things start to happen. Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing. The big issue comes in refinancing. In purchase transactions, the value is determined as the
Lower of the value or the contract price!!!
That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000. Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000. Big issues….Talk to your loan officer.
5 POPULAR PROGRAMS THAT KENTUCKY HOME BUYERS USE TO PURCHASE THEIR FIRST HOME.
• At least 3%-5% down
Max Conventional loan limits are set at $647,200 for 2022 in Kentucky
New Income limits for most counties (*) in Kentucky are $91,900 for a 4 unit household and household families of five or more + can make up to $121,300.
The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Bracken, Gallatin, and Pendleton are $99,250 for a household of four or less and up to $130,000 for a family of five or more.
Remember, Jefferson County Kentucky, Fayette County Kentucky are not eligible for USDA loans.
There is no max USDA loan limit.
Maximum FHA loan limits in Kentucky are set at $420,680 for 2022…If you are looking at a larger loan amount, then you would need to look at doing a conventional loan which has a max loan amount of $647,200.00
VA Funding Fee
Generally, all Veterans using the VA Home Loan Guaranty benefit must pay a funding fee. This reduces the loan’s cost to taxpayers considering that a VA loan requires no down payment and has no monthly mortgage insurance. The funding fee is a percentage of the loan amount which varies based on the type of loan and your military category, if you are a first-time or subsequent loan user, and whether you make a down payment. You have the option to finance the VA funding fee or pay it in cash, but the funding fee must be paid at closing time.
You do not have to pay the fee if you are a:
- Veteran receiving VA compensation for a service-connected disability, OR
- Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay, OR
- Surviving spouse of a Veteran who died in service or from a service-connected disability
The funding fee for second time users who do not make a down payment is slightly higher. Also, National Guard and Reserve Veterans pay a slightly higher funding fee percentage. As of January 1, 2020, the Blue Water Navy Veterans Act will impact the funding fee percentages depending on your category of service and loan type, please review the following to determine the path most beneficial to you moving forward:
FUNDING FEE TABLES The VA funding fee is calculated as a percentage of the total loan amount. It must be paid or rolled into the loan at closing time. VA strongly recommends that you verify with your lender that the funding fee matches your military service. In Public Law 116-23, Congress has established rates for loans closed on or after January 1, 2020, and before January 1, 2022 at the levels listed below: Purchase and Construction Loan Note: Reduced fees only apply to purchase loans with a down payment of at least 5 percent.
* If the Veteran’s only prior use of entitlement was for a manufactured home loan, the higher subsequent use fee does not apply.
** Active Duty includes Reserves and National Guard ordered to active service that meets the eligibility requirements for their era of service (https://www.benefits.va.gov/homeloans/purchaseco_eligibility.asp). Active service does NOT include active duty for training.
Note: A list of Tribes participating in the NADL Program is at https://www.benefits.va.gov/homeloans/nadl_mou.asp
The following do NOT pay the VA funding fee:
• Veteran receiving VA compensation for a service-connected disability;
• Veteran entitled to receive VA compensation for a service-connected disability, but receives retirement pay or active service pay;
• Surviving spouse of a Veteran who died in active service or from a service-connected disability;
• Servicemember on Active Duty who provides, on or before date of loan closing, evidence of having been awarded the Purple Heart.
VA requires 2 years removed from bankruptcy or foreclosure.
Kentucky Down Payment Assistance
Kentucky Down payment assistance loans are available up to $7,500 for Mortgage
KHC recognizes that down payments, closing costs, and prepaids are stumbling blocks for many potential home buyers. Here are several loan programs to help.
Regular DAP
- Purchase price up to $346,644 with Secondary Market.
- Assistance in the form of a loan up to $7,500 in $100 increments.
- Repayable over a 10-year term at 3.75 percent.
- Available to all KHC first-mortgage loan recipients.
Affordable DAP
- Purchase price up to $346,644 with Secondary Market.
- Assistance up to $7,500.
- Repayable over a 10-year term at 1.00 percent.
- Borrowers must meet Affordable DAP income limits.
MORE ABOUT DOWN PAYMENT AND CLOSING COSTS
- No liquid asset review and no limit on borrower reserves.
- Specific credit underwriting standards may apply to down payment programs.
SECONDARY MARKET FUNDING SOURCE
- First-time and repeat homebuyers statewide
- 30-year fixed interest rate
- Principal residence ONLY
- Purchase Price Limit: $346,644
- Borrower must meet KHC’s Secondary Market Income Limits
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (charter coverage)
- All KHC DAPs applicable
- No minimum borrower contribution
- No reserves required
- 80 percent AMI income
- Minimum credit score of 660
- 3 percent down payment
- Monthly mortgage insurance (standard coverage)
- All KHC DAPs applicable
- No minimum borrower contribution
- No reserves required
- Secondary Market Income limits apply
- Insured by the Federal Housing Administration
- 3.5 percent down payment
- All KHC DAPs applicable
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
Refinance Options (Available only through Secondary Market)
- Credit qualifying Streamline Refinance and Rate/Term Refinance
- Insured by the Federal Housing Administration
- Cash back to borrower not to exceed $500
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
- Guaranteed by the Veterans Administration for qualified military veterans
- No down payment if the property appraises for the sales price or greater
- All KHC DAPs applicable
- Minimum credit score of 620
- No monthly mortgage insurance payments
Refinance Options (Available only through Secondary Market)
- VA IRRRL
- 620 minimum credit score
- No appraisal required
- 30-year term
- VA existing loan
- Guaranteed by Rural Housing Services (RHS)
- Home must be located in a rural area as defined by RHS
- No down payment if the property appraises for the sales price or greater
- All KHC DAPs applicable
- Upfront and monthly mortgage insurance
- Minimum credit score of 620
Refinance Options (Available only through Secondary Market)
- RHS Streamlined-Assist Refinance Program
- 620 minimum credit score
- No appraisal required
- Must have made timely mortgage payments for the last 12 months
- 30-year term
- RHS existing 502 guaranteed loan
Kentucky First Time Home Buyer Common Questions and Answers:
∘ WHAT KIND OF CREDIT SCORE DO I NEED TO QUALIFY FOR DIFFERENT FIRST TIME HOME BUYER LOANS IN KENTUCKY?
∘ DOES IT COSTS ANYTHING TO GET PRE-APPROVED FOR A MORTGAGE LOAN?
∘ HOW LONG DOES IT TAKE TO GET APPROVED FOR A MORTGAGE LOAN IN KENTUCKY?
∘ ARE THERE ANY SPECIAL PROGRAMS IN KENTUCKY THAT HELP WITH DOWN PAYMENT OR NO MONEY DOWN LOANS FOR KY FIRST TIME HOME BUYERS?
∘ WHEN CAN I LOCK IN MY INTEREST RATE TO PROTECT IT FROM GOING UP WHEN I BUY MY FIRST HOME?
∘ HOW MUCH MONEY DO I NEED TO PAY TO CLOSE THE LOAN?
HOW LONG IS MY PRE-APPROVAL GOOD FOR ON A KENTUCKY MORTGAGE LOAN?
HOW MUCH MONEY DO I HAVE TO MAKE TO QUALIFY FOR A MORTGAGE LOAN IN KENTUCKY?
Customer Testimonials
Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours.
Anderson Johnson April, 2018
We moved from Michigan to Northern Kentucky area and we were really impressed. We got a USDA loan no money down and closed in less than 3.5 weeks. We shopped around online with other lenders but Joel was always first to respond and his rates were just a little better than other lenders. He kept us informed through the process along with our realtor and there was absolutely no surprises like we heard from other co-workers and friends that they experienced in their loan process. We have already referred another co-worker to Joel . He’s AWESOME!
We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel’s website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services.
Angela Forsythe
“We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel’s website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him.” September 2016
Monica Leinhardt
“We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan.Kayle Griffin
RICHARD VOLZ , Residential Sales , Remax Foursquare Realty
“We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else.”
Melody Glasscock March 2014
I can answer your questions and usually get you pre-approved the same day.
Call or Text me at 502-905-3708 with your mortgage questions.
Email Kentuckyloan@gmail.com
Joel Lobb (NMLS#57916)
Senior Loan Officer
Text/call 502-905-3708
kentuckyloan@gmail.com