Kentucky's Welcome Home Grant

WELCOME GRANT INFORMATION FOR QUALIFYING IN 2025




Kentucky's Welcome Home Grant: A $20,000 Boost for Homeownership!

Dreaming of owning a home in Kentucky but facing hurdles with the down payment? The Welcome Home Grant program might be your answer! This initiative offers a $20,000 grant to eligible homebuyers, giving them a significant financial boost towards their dream home. Let's delve into the program's details and see if you qualify!

What is the Welcome Home Grant Program?

This program, funded by the Federal Home Loan Bank of Cincinnati (FHLBC), partners with participating lenders across Kentucky to provide down payment and closing cost assistance to homebuyers. It aims to increase homeownership opportunities for individuals and families, particularly those with moderate income.

  1. Who is Eligible?
  2. Income Limits: Your household income must be at or below 80% of the Mortgage Revenue Bond (MRB) limit for your county. You can find these limits here 
  3. --👇>>https://kyfirsttimehomebuyer.wordpress.com/2024/01/20/kentucky-welcome-home-grant-5000-00/
  4. Only Kentucky First-Time Homebuyers? Not necessarily: Both first-time and repeat homebuyers can apply!
  5. Location: The property must be your primary residence and located in a county participating in the program. It's available in all 120 counties of Kentucky
  6. Other Requirements: You must have a fully executed purchase contract, contribute at least $500 of your own funds towards the down payment/closing costs, and meet the lender's creditworthiness standards.

Important Dates to Remember:


  • Application Period: Reservations for the 2025 Welcome Home Grant program open on March 1st, 2025, at 8:00 AM ET.
  • Funding Availability: Grants are limited and awarded on a first-come, first-served basis.
  • Program Duration: The program runs until all funds are reserved.
  • Must have contract under agreement to submit for funds. 

Benefits of the Welcome Home Grant:

  • Significant financial assistance: $20,000 can make a huge difference in lowering your down payment and closing costs.
  • More affordable monthly payments: A smaller down payment translates to a lower mortgage amount and potentially lower monthly payments.
  • Opens doors to homeownership: The grant can make homeownership more accessible for those facing financial constraints.

Next Steps:

  1. Check your eligibility: Visit the this  Kentucky Welcome Home Grant Qualifying Criteria or contact a participating lender to confirm you meet the income and other requirements. 
  2. Find a participating lender: A list of participating lenders is available on the FHLBC website or here --->>> Kentucky Lenders for Welcome Home Grant 2025.
  3. Get pre-approved: Getting pre-approved shows the seller you're a serious buyer and helps you understand your budget.
  4. Be prepared on March 1st: Have all necessary documents ready to submit your reservation for the grant as soon as applications open.
  5. Income Limits for Kentucky Welcome Grant for all Kentucky Counties below:👇
  6. 👉Kentucky welcome grant income limits for 2025


Kentucky Welcome Home Buyer Eligibility

A homebuyer would be eligible for the Kentucky Welcome Home grant if all of the following guidelines are met:

  • The total income for all occupants who will reside in the home is at or below 80 percent of the Mortgage Revenue Bond (MRB) limit for the county and state where the property is located;
  • A fully executed (signed by buyer and seller) purchase contract on an eligible property is in hand;
  • The homebuyer has at least $500 of their own funds to contribute towards down payment and/or closing costs; and,
  • If a first-time homebuyer (typically anyone who has not owned a home in the last three years), a satisfactory homebuyer counseling course is completed prior to the loan closing.
    Note: Applicants do not have to be first-time homebuyers.

Kentucky Property Eligibility

The Kentucky Welcome Home grant is available for various property types:

  • The property will be the homebuyer’s primary residence;
  • The property is a single family, townhome, condominium, duplex, multi-unit (up to four family units) or a qualified manufactured home. (Manufactured homes may be eligible if they are taxed as real estate and affixed to a permanent foundation); and,
  • The property is subject to a legally enforceable five-year retention mechanism, included in the Deed or as a Declaration of Restrictive Covenants to the Deed, requiring the FHLB Cincinnati be given notice of any refinancing, sale, foreclosure, deed in-lieu of foreclosure, or change in ownership during the five year retention period.
Beginning March 1, 2025, the Federal Home Loan Bank of Cincinnati offers grants of up to $25,000 for honorably discharged veterans, surviving spouses of military personnel, and active duty military homebuyers and up to $20,000 for all other homebuyers to assist with down payment and closing costs for income eligible homebuyers through the Welcome Home Program. Who are Eligible Homebuyers?
A homebuyer would be eligible for the Welcome Home grant if all of the following guidelines are met: The total income for all occupants who will reside in the home is at or below 80 percent of the Mortgage Revenue Bond limit for the county and state where the property is located –


In Jefferson County 1 or 2 person families can make up to $71,760. 3-4 persons in the household cap at $82,584. The limits are slightly higher or lower in the surrounding counties like Bullitt, Henry, Oldham, Spencer, Hardin, Meade, Nelson and Spencer Counites. see limits below



2025 Income Limits Kentucky Welcome Program Below:


Use the 80% limits for the Welcome Home Program

Kentucky Welcome Home Grant 2025 Income Limits for the $20,000 Grant.

Use the 80% limits for the Welcome Home Program

Use the 100% limits for the Disaster Reconstruction Program

Home Buyer Eligibility

A homebuyer would be eligible for the Welcome Home grant if all of the following guidelines are met:


The total income for all occupants who will reside in the home is at or below 80 percent of the Mortgage Revenue Bond (MRB) limit for the county and state where the property is located;
A fully executed (signed by buyer and seller) purchase contract on an eligible property is in hand;
The homebuyer has at least $500 of their own funds to contribute towards down payment and/or closing costs; and,

If a first-time homebuyer (typically anyone who has not owned a home in the last three years), a satisfactory homebuyer counseling course is completed prior to the loan closing.
Note: Applicants do not have to be first-time homebuyers.

Property Eligibility

The Welcome Home grant is available for various property types:


The property will be the homebuyer’s primary residence;
The property is a single family, townhome, condominium, duplex, multi-unit (up to four family units) or a qualified manufactured home. (Manufactured homes may be eligible if they are taxed as real estate and affixed to a permanent foundation); and,
The property is subject to a legally enforceable five-year retention mechanism, included in the Deed or as a Declaration of Restrictive Covenants to the Deed, requiring the FHLB Cincinnati be given notice of any refinancing, sale, foreclosure, deed in-lieu of foreclosure, or change in ownership during the five year retention period.



A fully executed (signed by buyer and seller) purchase contract on an eligible property is in hand; 

The homebuyer has at least $500 of their own funds to contribute towards down payment and/or
closing costs; And, If a first-time homebuyer (typically anyone who has not owned a home in the last three years), a satisfactory homebuyer counseling course is completed prior to the loan closing. 

YOU DO NOT HAVE TO BE A FIRST-TIME BUYER TO OBTAIN THIS GRANT.

What is an Eligible Property?

A property would be eligible if all of the following guidelines are met:
The property will be the homebuyer’s primary residence; The property is a single family, townhome, condominium, duplex, multi-unit (up to four family units); And, The property is subject to a legally enforceable five-year retention mechanism – this means it is forgiven at a rate of 20% per year and if you sell before 5 years, they will be repaid part of the grant.












  
 Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans


🌐 Websitewww.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.


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 approvalnor 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).


2025 Kentucky Homebuyers Guide: Getting Approved for a Mortgage Loan in Kentucky

If you’re a Kentucky homebuyer, this blog post will guide will help you. It will help you navigate the mortgage approval process in 2025.

If you're looking to purchase your next home, this guide is for you too. Whether you're considering FHA, VA, USDA, or KHC loans with down payment assistance, we’ll cover everything you need to know.

This includes credit score requirements and debt-to-income ratios. We will also discuss appraisals, inspections, bankruptcy, and foreclosure guidelines.


Zero Down Payment Options for Kentucky Homebuyers in 2025

Kentucky offers several programs that allow eligible home-buyers to buy a home with little to no down payment:

Kentucky Housing Corporation (KHC) Loans

FHA Loans with down payment assistance

VA Loans for veterans and active-duty personnel

USDA Rural Housing Loans

Special grants, like the $25,000 Kentucky Welcome Home Grant

Each program has its own qualifying criteria. Let’s dive into the specifics.

Zero Down Payment Options for Kentucky Homebuyers in 2025





Kentucky FHA loan with Down Payment Assistance


Kentucky FHA loan

KHC offers affordable loans paired with down payment assistance (DPA) to help Kentucky homebuyers.

Credit Score: Minimum 620 for government loans and 660 for conventional loans

Down Payment: 3.5% (may be offset by DPA programs)

Income Limits: Varies by county and household size click yellow link>---See income limits and purchase price limits here <

Debt-to-Income Ratio (DTI): 50% for housing costs; 50% for all debts

Work History: Minimum two years of stable employment

KHC Down Payment Assistance (DPA) Options:

Up to $10,000, repayable over 10 years at 3.75% interest. It can be used for down payment and closing costs and prepaids (property taxes, home insurance and odd days interest)

KHC offers affordable loans paired with down payment assistance (DPA) to help Kentucky homebuyers.  Credit Score: Minimum 620  Down Payment: 3.5% (may be offset by DPA programs)  Income Limits: Varies by county and household size  Debt-to-Income Ratio (DTI): 50% for housing costs; 50% for all debts  Work History: Minimum two years of stable employment  KHC Down Payment Assistance (DPA) Options:      Up to $10,000, repayable over 10 years at 3.75% interest.    Fully forgivable DPA options may be available depending on the program.



FHA Loans in Kentucky

Kentucky FHA loans are government-backed mortgages requiring low down payments, making them ideal for Kentucky first-time homebuyers with lower credit scores, scores under 620 and higher debt to income ratios over 45% on the backend.

Credit Score:

580+ with 3.5% down payment

500-579 with 10% down payment

Debt-to-Income Ratio: Generally up to 45.99% on front end ratio or housing ratio and up to 56.99% on the back-end ratio, meaning new house payment plus monthly payments on the credit report.

Work History: Two years of consistent income. Does not have to be the same job. If off work more than 6 months in the past 2 years, may require you to be on current job for 6 months, 

Bankruptcy/Foreclosure Requirements:

Two years after bankruptcy Chapter 7 and 1 year removed from A Chapter 13 with a perfect pay history can do a FHA loan while in Chapter 13 with 12 months paid on time and trustee approval form courts

Three years after foreclosure

Kentucky FHA Loan Limits for 2025 

The Federal Housing Administration (FHA) loan program is a popular choice for homebuyers due to its lower credit score requirements and modest down payment needs. Here are the updated FHA loan limits for Kentucky in 2025:

One-Unit Properties: $472,030
Two-Unit Properties: $604,400
Three-Unit Properties: $730,525
Four-Unit Properties: $907,800

FHA Loans in Kentucky Kentucky FHA loans are government-backed mortgages requiring low down payments, making them ideal for Kentucky first-time homebuyers with lower credit scores, scores under 620 and higher debt to income ratios over 45% on the backend.  Credit Score:  580+ with 3.5% down payment  500-579 with 10% down payment  Debt-to-Income Ratio: Generally up to 45.99% on front end ratio or housing ratio and up to 56.99% on the back-end ratio, meaning new house payment plus monthly payments on the credit report.  Work History: Two years of consistent income. Does not have to be the same job. If off work more than 6 months in the past 2 years, may require you to be on current job for 6 months,   Bankruptcy/Foreclosure Requirements:  Two years after bankruptcy Chapter 7 and 1 year removed from A Chapter 13 with a perfect pay history can do a FHA loan while in Chapter 13 with 12 months paid on time and trustee approval form courts  Three years after foreclosure


Kentucky VA Loans for Active Duty and Veterans

Kentucky VA loans are a top choice for veterans and active-duty military members. They require no down payment. They also require no mortgage insurance monthly but does have upfront mortgage insurance. see link here for guidelines > 

Certified of Eligibility Certificate of Eligibility (COE) Is Required

To qualify for a Kentucky VA mortgage loan, borrowers must obtain a Certificate of Eligibility (COE) from the VA. This document proves you meet the eligibility criteria for a VA loan. Here’s what you’ll need to get your COE:

Veterans: DD Form 214 (showing character of service and reason for separation).

Active-duty service members: A statement of service signed by your commander or personnel officer.

Surviving spouses: VA Form 26-1817 and the veteran’s DD Form 214, if available.

You can apply for your COE online, via mail, or through your lender.


Credit Score: No official minimum, but most lenders require 580-620. The higher your score and lower your debt to income ratio and the higher your residual income your changes of approval is greater

Income: Must demonstrate stable and sufficient income.

Work History: Two years of consistent employment. If getting out of the military and using your VA COE to buy a house the job must line up with your MOS. Military Occupational Specialty

Bankruptcy/Foreclosure Requirements:

Two years after bankruptcy or foreclosure

Debt-to-Income Ratio: No set maximum, can go much higher on the debt to income ratio on VA loans due to they have a residual income requirements. I have see a backend ratio get an approval as high as 75% but they had a great credit score (740 or higher),  high residual income and a lot of assets in the bank as far as checking, savings, 401k or retirement. 

VA loans also include a residual income requirement to ensure borrowers can afford living expenses after the mortgage payment, monthly payments on the credit report, child care expenses, maintenance, and utilities for the house. See the residual income chart below. This is very important for VA loan approval. If you are over this amount, you will not qualify, even with a great credit score, low debt ratio, and a lot of reserves in the bank.

VA Residual Income Chart for Kentucky Mortgage VA Loan Approval (2025) Family Size	Loan Amount $80,000 and Below	Loan Amount Over $80,000 1	$441	$541 2	$738	$888 3	$889	$1,041 4	$1,020	$1,158 5+ (per additional family member)	+$80	+$80

Example: Residual Income for a VA Loan Approval in Kentucky

Example: Residual Income for a VA Loan Approval in Kentucky
Family Size: 5
Loan Amount: Over $80,000
Required Residual Income: $1,158 (for 4 family members) + $80 (for the 5th member) = $1,238
Actual Residual Income: $1,500
Outcome: The borrower qualifies for the VA loan, as their residual income of $1,500 exceeds the required $1,238.


Outcome: The borrower qualifies for the VA loan, as their residual income of $1,500 exceeds the required $1,238.

Residual income is a critical requirement for VA loan approvals, ensuring borrowers have enough to cover living expenses, including housing utilities, child care, and maintenance costs. If residual income falls below the threshold, loan approval may not be possible, regardless of credit score or debt-to-income ratio.

 The higher your score and lower your debt to income ratio and the higher your residual income your changes of approval is greater

USDA Rural Housing Loans in Kentucky

The USDA Rural Housing Loan Program is perfect for Kentucky homebuyers looking to purchase in eligible rural areas. It offers 100% financing with low mortgage insurance premiums.

Credit Score:

640 for automated approval

Manual underwriting is available for borrowers with credit scores below 640. If they decide to manually underwrite a loan, they will ask for more information about the borrower's credit history from the past year.

All loans are ran through GUS Automated Underwriting Engine, and your pre-approval is based off this

Property Restrictions:


Eligible Properties:
Must be located in a designated rural area.
Includes single-family primary residences, modular homes, and detached or attached planned unit developments (PUDs).
Thermal standards must meet or exceed the International Energy Conservation Code (IECC).

Ineligible Properties:
Cooperatives.
Income-producing properties.
Manufactured or mobile homes.
Non-rural designated properties.
Non-owner-occupied homes.

How to Determine Eligibility

You need to confirm if a property is located in a designated rural area. Visit the USDA Property Eligibility Map by clicking this link 

Income Limits: Varies by county and household size

$112,450 for 1-4 person households

$148,450 for 5+ person households

To check income limits for your county, use the

️ USDA Income Eligibility Tool.


Work History: Two years of stable income required.

Debt-to-Income Ratio:

Front-end: 31%

Back-end: 45%

Key Advantage: USDA loans don’t need a down payment, and the upfront mortgage insurance can be rolled into the loan.

Breaking Down USDA Rural Housing Loans Financing Benefits Credit Score Requirements USDA Rural Housing Loan Income Limits Work History Debt-to-Income Ratios



Kentucky Down Payment Assistance and Grants

$25,000 Kentucky Welcome Home Grant for 2025

This grant provides significant assistance for down payments and closing costs.

Eligibility:

Must complete a homebuyer counseling program.

Contribute at least $500 toward closing costs.

Grant Repayment: Prorated repayment required if the home is sold within five years.

Eligible Loans: Can be used with FHA, USDA, VA, and conventional loans.

5% Kentucky Homebuyer Grant

Offers up to 5% of the buying price for down payment or closing costs.

Fully forgivable or repayable options available.

$25,000 Kentucky Welcome Home Grant for 2025

The Federal Home Loan Bank of Cincinnati (FHLB Cincinnati) offers grants of up to $25,000 for honorably discharged veterans, surviving spouses of military personnel, and active-duty military homebuyers and up to $20,000 for all other homebuyers to assist with down payment and closing costs for income eligible homebuyers through the Welcome Home Program (WHP).


How the 2025 Kentucky Welcome Grant Works

Offered through local banks and credit unions partnered with the Federal Home Loan Bank of Cincinnati.

The program becomes available annually on March 1st.

Funds are distributed on a first-come, first-serve basis and are typically depleted within 15 days due to high demand.

Application and Closing Timeline

The program requires an application for approval tied to a specific property.

Due to the nature of the grant, the closing process may take longer, so planning ahead is crucial.

Why Choose the Kentucky Welcome Home Grant?

This grant offers an unparalleled opportunity to reduce the financial burden of homebuying. With the Kentucky Welcome Home Grant of  $25,000 available for qualified applicants, it can significantly lower the amount you need upfront for your new home.


Kentucky Welcome Home Grant Process Identify Eligibility Requirements Contribute Toward Closing Costs Grant Offered Through Institutions Funds Distributed Complete Homebuyer Counseling Apply for Grant Program Availability Closing Process


Other Mortgage Loan Requirements in Kentucky

Credit Score Requirements

Conventional Loans: Minimum 620 (higher scores preferred for better terms).

FHA Loans: 580+ (or 500-579 with 10% down).

VA Loans: 580-620 (varies by lender).

USDA Loans: 620-640 for most lenders.

KHC Down Payment Assistance. 620 for FHA, VA, USDA and 660 for Conventional Scores

Kentucky Mortgage Loan Requirements Overview KHC Down Payment Assistance Loans Conventional Loans 620 for government, 660 for conventional Minimum 620 credit score preferred USDA Loans FHA Loans 620-640 for most lenders, no minimum 580+ or 500-579 with 10% down VA Loans 580-620 varies by lender, no minimum




Debt-to-Income Ratio

Conventional Loans: 45% max with mortgage insurance 50% max without mortgage insurance

FHA Loans: 40%-56% max

VA Loans: Flexible, no max debt to income but must meet residual income requirements

USDA Loans: 31% front-end; 45% back-end, much tighter dti restriction's when compared to FHA, VA, USDA and KHC ...

Loan Types and Debt-to-Income Ratios Conventional Loans USDA Loans Maximum 45% with mortgage insurance, 50% without 31% front-end, 45% back-end VA Loans FHA Loans No maximum, but must meet residual income requirements Debt-to-income ratio range of 40%-56%





Work History and Income Verification

Lenders require at least two years of stable employment. Self-employed borrowers must provide two years of tax returns.


Stable Employment How to verify employment and income for lenders? Lenders require at least two years of stable employment for verification. Self-Employed Tax Returns Self-employed borrowers must provide two years of tax returns for verification.


Appraisals and Inspections

Appraisals ensure the home’s value matches the purchase price.

Home appraisals are required by a lender. Home inspections aren’t.
You must set up an inspection yourself while the lender will order an appraisal for you.
An appraisal may impact your ability to get the loan amount you need. An inspection won’t.
Appraisers typically only spot things visible to the naked eye, whereas inspectors use special devices and training to spot deeper issues.


Home buyers are allowed and encouraged to walk through the home with the inspector during the inspection.


An inspector will explain and educate during the interactive process. An appraiser won’t tell you their findings until they complete their report.


A home inspection only examines the condition of the home when making the assessment. A home appraisal considers the condition of the home, comparable home prices, lot size, home features, area crime rates and school zones.

Typically, an appraiser will go through the appraisal process alone.
The inspector and appraiser have a different set of skills, are trained and certified in different processes and have different areas of expertise.

Understanding Home Purchase Processes Loan Approval Appraisal is necessary for mortgage approval Lender's Role Orders appraisal, ensures unbiased evaluation Home Inspection Identifies potential issues, not required for all loans Appraisal Ensures home value matches purchase price



Bankruptcy and Foreclosure Requirements

FHA: Two years after bankruptcy; three years after foreclosure.

VA: Two years after bankruptcy or foreclosure.

USDA: Three years after bankruptcy or foreclosure.

Conventional: Four years after bankruptcy; seven years after foreclosure.

Navigating Post-Bankruptcy and Foreclosure Loan Wait Times FHA and VA loan eligibility Conventional loan eligibility VA loan eligibility Conventional loan eligibility 2 years after bankruptcy 4 years after bankruptcy 2 years after foreclosure 7 years after foreclosure 3 years after bankruptcy 3 years after foreclosure 3 years after foreclosure USDA loan eligibility FHA loan eligibility USDA loan eligibility

Time to Close

Most loans in Kentucky take 30-45 days to close, depending on the lender and loan program.


Here’s a blog post based on the text and flow chart steps provided in the image, tailored for Kentucky homebuyers:


Step-by-Step Guide to Getting Approved for a Mortgage Loan in Kentucky

Buying a home in Kentucky can feel overwhelming, especially for first-time homebuyers. Understanding the mortgage process, the timeline involved, and what is needed to close your loan will make the journey smoother and less stressful. Here’s a step-by-step guide to walk you through the process.


Step 1: Pre-Purchase Consultation

The first step is scheduling a pre-purchase consultation with a mortgage professional. During this meeting:

Discuss your financial goals and homeownership plans.

Review your credit score, income, and overall qualifications for a mortgage loan.

Understand the loan options available, including FHA, VA, USDA, and conventional loans.

Tip: Be prepared to ask questions and clarify your expectations during this phase.


Step 2: Pre-Qualification

Once your consultation is complete, gather the necessary documents (such as pay stubs, tax returns, and bank statements) to verify your financial situation. After reviewing these, your lender will issue a pre-qualification letter, which shows sellers that you are a serious buyer with financing in place.


Step 3: Find a Home and Negotiate the Contract

With your pre-qualification letter in hand, you can now:

Start searching for your dream home.

Work with a realtor to make an offer and negotiate the purchase contract.

Note: Ensure that the home you choose aligns with your loan requirements, such as USDA property eligibility for rural housing loans.


Step 4: Review Loan Terms and Sign Initial Disclosures

After your contract is accepted:

Your lender will provide initial disclosures outlining the loan terms, estimated costs, and required steps.

Carefully review the loan documents and sign them to proceed with the loan application.

Step 5: Order Inspection, Appraisal, and Title

At this stage, the following steps are initiated:

Home Inspection: Ensures the property is in good condition and identifies potential issues.

Appraisal: Confirms the home’s value matches the purchase price.

Title Work: Verifies there are no legal issues with property ownership.

Tip: Coordinate closely with your realtor and lender to ensure these steps are completed in a timely manner.

Step 6: Submit Loan Package to Underwriting

Once all initial documents are gathered, your lender will submit the complete loan package to underwriting. The underwriter reviews:

Credit score

Debt-to-income ratio

Employment history

Property appraisal

Title work

Expect the underwriter to request updated documents or clarification on certain details.

Step 7: Clear Underwriting Conditions

After the underwriter reviews your loan file, they may issue conditional approval. This means you need to provide additional documentation, such as:

Updated bank statements

Proof of funds for closing

Explanations for any credit inquiries

Once all conditions are met, the underwriter will issue final approval.

Step 8: Closing Disclosure and Waiting Period

Before closing, you’ll receive a Closing Disclosure (CD), which outlines the final terms and costs of your mortgage. By law, you must review this document during a 3-day waiting period before the closing.

Step 9: Closing Day

Congratulations, it’s time to finalize your loan! On closing day:

Sign the final loan documents.

Pay any remaining closing costs (if applicable).

Receive the keys to your new home.


Mortgage Loan Approval Process in Kentucky Pre-Purchase Consultation Pre-Qualification Find Home and Negotiate Contract Review Loan Terms Order Inspection, Appraisal, Title Submit Loan Package Clear Underwriting Conditions Receive Closing Disclosure


What to Expect Throughout the Process

Timeline: The mortgage process typically takes 30-45 days from pre-qualification to closing, though this can vary depending on the loan type and how quickly documents are provided.

Communication: Stay in close contact with your lender, realtor, and title company to avoid delays.

Updated Documents: Be prepared to provide updated pay stubs, bank statements, or other documentation throughout the process.

Tips for a Smooth Closing

Stay Organized: Keep all required documents in one place for easy access.

Respond Quickly: Promptly address any requests from your lender or underwriter.

Ask Questions: Don’t hesitate to clarify terms or processes you don’t understand.

Be Financially Stable: Avoid making major purchases or changes to your financial situation during the process.

Ready to Get Started?

If you’re ready to purchase a home in Kentucky, partnering with an experienced loan officer will make the process seamless. Whether you're a first-time homebuyer or upgrading, programs like FHA, VA, USDA, and KHC down payment assistance are designed to help you achieve your dream of homeownership.

For personalized guidance and support, contact:


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.


Untitled (Website) by joel lobb

The Credit Report and Credit Scores Used For A Kentucky Mortgage Loan Approval FHA, USDA, Fannie Mae and VA

Understanding Credit Scores for Kentucky Mortgage Loan Approval




Why do some mortgage lenders require a certain credit score whereas other mortgage lenders may not?



One Word Mortgage Overlays. Some lenders will institute a higher credit score than the minimum below to lessen their risk of having to buy the loan back from the government agencies if they get too many mortgage defaults. In order to protect their lending portfolio and hedging their risk, they will require say a 640 credit score or higher for a FHA loan, whereas the guidelines clearly state you can do a FHA loan with a minimum credit score of 580 To understand mortgage overlays, it helps to have a foundation of how the mortgage approval process works. Mortgage lenders always have underwriting guidelines—standards to determine the amount and terms you qualify for.

Credit Score Minimum guidelines are typically set based on the mortgage program, e.g., FHA, VA, or USDA. FHA, --

👇

How Credit Scores Affect your Kentucky Mortgage Loan Approval Chances




What score does the Mortgage Lender Use? Why may it be different than the one you are seeing?




The reason mortgage lenders use older FICO Scores is because they don’t have a choice. They are essentially forced to use them.

For a bank to sell a mortgage to Fannie Mae or Freddie Mac, FHA VA, USDA, Etc, the loan has to meet certain guidelines. Some of these guidelines require borrowers to have a minimum credit score under specific FICO Score generations.

If you’re planning to apply for a mortgage, be aware that the credit score you see on your application might differ slightly from the one you’re used to.

It might even be different than what comes up when you monitor your credit, or even when you apply for a car loan.

Banks use a slightly different credit score model when evaluating mortgage applicants. Below, we go over what you need to know about credit scores you’re looking to buy a home.

The scoring model used in mortgage applications

While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage:

FICO® Score 2 (Experian)
FICO® Score 5 (Equifax)
FICO® Score 4 (TransUnion)

As you can see, each of the three main credit bureaus (Equifax, Experian and TransUnion) use a slightly different version of the industry-specific FICO Score. That’s because FICO tweaks and tailors its scoring model to best predict the creditworthiness for different industries and bureaus. You’re still evaluated on the same core factors (payment history, credit use, credit mix and age of your accounts), but the categories are weighed a little bit differently.

The FICO 8 model is known for being more critical of high balances on revolving credit lines. Since revolving credit is less of a factor when it comes to mortgages, the FICO 2, 4 and 5 models, which put less emphasis on credit utilization, have proven to be reliable when evaluating good candidates for a mortgage.

Mortgage lenders pull all three reports, from all three bureaus, but they only use one when making their final decision.

“A bank will use all three bureaus,”--- “It’s called a tri-merge.”

If all three of your scores are the same, then their choice is simple. But what if your scores are different?

And if you are applying for a mortgage with another person, such as your spouse or partner, each applicant’s FICO 2, 4 and 5 scores are pulled. The bank identifies the median score for both parties, then uses the lowest of the final two.


How Credit Scores Affect your Kentucky Mortgage Loan Approval Chances





How Credit Scores Affect your Kentucky Mortgage Loan Approval Chances

Contact Joel Lobb for Expert Mortgage Advice

Joel Lobb is an experienced Mortgage Loan Officer , Inc. specializing in helping Kentucky homebuyers navigate credit and mortgage processes.

Contact Information:



Disclaimer: The information provided is for educational purposes and does not guarantee approval or represent underwriting guidelines. Always consult with your lender for personalized advice.

If you'd like any adjustments or additional details, let me know!


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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 approvalnor 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).



 


Kentucky USDA Rural Housing Mortgage Lender: 11 Things Borrowers Don’t Know About USDA Loans in...

Kentucky USDA Rural Housing Mortgage Lender: 11 Things Borrowers Don’t Know About USDA Loans in...:  If you’re exploring home-ownership options in Kentucky, you will be surprised to learn about the unique benefits of USDA loans. Many refer ...

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.


Different Types of Kentucky Home Loans Different Types of Kentucky Home Loans










• 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.

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.

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.


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.




click on link for mortgage pre-approval


1 - 📅 Email - kentuckyloan@gmail.com 
2.  📞 Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans


🌐 Websitewww.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.