5 Things to Know For First Time Home Buyers in Kentucky

 First Time Home Buyers in Kentucky

1. Do Mortgage Rates Change Daily?

Just like the gas prices at the pump,  mortgage rates can change daily or throughout the day.  Typically mortgage rates are published at 10-11 am daily by most lenders and you can lock up through the close of business which is usually around 6-7 PM.  Mortgage rates can change up or down throughout the day based on various financial, economics, and geopolitical news in the US Financial markets and World markets. Generally speaking, good economic news is bad for rates and vice versa, bad economic news is good for mortgage rates. 

The good news is this: Once you find a home and get it under contract, you can lock your mortgage loan rate. Typically it takes about 30-45 days to close a mortgage loan in Kentucky, so the typical lock is for 30-60 days. If rates get better you may be able to negotiate a better rate with your lender, but they usually have to improve by at least 25 basis points (.25) to do that. Not all lenders offer this option. The longer you lock the loan, the greater the costs. It is usually free to lock in a loan for up to 90 days without having to pay a fee.

What a lot of lenders are experiencing now is that some loans don't close on time for various reasons. You can always extend the lock on the loan but it will costs you usually .125 basis points to do so. If you let the lock expire on the loan, then you have to take worse case pricing on that day when you go to relock. It is usually best to extend the lock on your loan. 

2. What kind of Credit Score Do I need to qualify?

When applying for a mortgage loan, lenders will pull what they call a "tri-merge" credit report which will show three different fico scores from Transunion, Equifax, and Experian. The lenders will throw out the high and low score and take the "middle score" For example, if you had a 614, 610, and 629 score from the three main credit bureaus, your qualifying score would be 614. Most lenders will want at least two scores. So if you only have one score, you may not qualify. Lenders will have to pull their own credit report and scores so if you had it ran somewhere else or saw it on a website or credit card you may own, it will not matter to the lender, because they have to use their own credit report and scores. 

Most lenders will pull your credit report for free nowadays so this should not be a big deal as long as your scores are high enough. 

The Secondary Market of Mortgage loans offered by FHA, VA, USDA, Fannie Mae, and KHC all have their minimum fico score requirements and lenders will create overlays in addition to what the Government agencies will accept, so even if on paper FHA says they will go down to 580 or 500 in some cases on fico scores, very few lenders will go below the 620 threshold. 

If you have low fico scores it may make sense to check around with different lenders to see what their minimum fico scores are for loans. 

The lenders I currently deal with have the following fico cutoffs for credit scores:

FHA--580 minimum score

VA----580  minimum score

Fannie Mae--620 minimum score

USDA--620 minimum score

KHC with Down Payment Assistance --620 minimum score.

As you can see, 580-620 is the minimum score with most lenders for a FHA, VA, or Fannie Mae loan, is required for the no down payment programs offered by USDA for Kentucky for First Time Home Buyers wanting to go no money down.

3. What are the down payment requirements?

The most popular programs for Kentucky First Time Home Buyers usually involves one of the following housing programs outlined in bold below:

FHA:

FHA will allow a home buyer to purchase a house with as little as 3.5% down. If your credit scores are low, say 680 and below, a lot of times it makes sense to go FHA because everyone pays the same mortgage insurance premiums no matter what your score is, and the down payment can be gifted to you. Meaning you really don't have to have any skin into the game when it comes to down payment. 

They even allow down payment assistance for down payment requirements of 3.5% through eligible parties like Kentucky Housing, Welcome Home Grants and Louisville KY and Covington Kentucky Down Payment Grants. 

 Lastly, FHA will allow for higher debt to income ratios with sometimes getting loan pre-approvals up to 55% of your total gross monthly income. So if  you have a debt to income ratio of over 50%, Fannie Mae will not do the loan and USDA usually likes their debt to income ratios no more than 45%.

Think back to the last time you financed a purchase — be it a home, automobile, or what have you… You may remember having heard the term “debt-to-income ratio.” Today I want to spend some time going over exactly what this ratio is, and to also touch on how it can effect your personal finances.

4. What is your debt-to-income ratio?

Commonly referred to as your “DTI,” your debt-to-income ratio is a personal finance benchmark that relates your monthly debt payments to your monthly gross income.

As an example… Let’s say that your gross monthly salary is $5,000 and you are spending $2,800 of it toward monthly debt payments. In that case, your DTI would be an unhealthy 56%.

This version of your DTI is sometimes referred to as your “back-end” DTI. This is often broken down further to give a front-end debt-to-income ratio, which is a component of your back-end DTI.

How to calculate your front-end DTI for a Kentucky Mortgage Loan Approval

Your front-end DTI is calculated by dividing your monthly housing costs by your monthly gross income. Front-end DTI for renters is simply the amount paid in rent, whereas for homeowners it is the sum of mortgage principal, interest, property taxes, and home insurance (i.e., your PITI) divided by gross monthly income.

From above, if that $2,800 in debt payments is attributable to $1,500 in housing costs and $1,300 in non-housing costs, then your front-end DTI is $1,500/$5,000 = 30% (and your back-end ratio is still 56%, as calculated above).

Fannie Mae:

Fannie Mae requires just 3% down with their new Home Possible Program, but if you use their traditional mortgage loan, then 5% is the Fannie Mae Standard. Fannie Mae will go down 620 score, but if your scores are below 680, I would look seriously at the FHA loan program because Fannie Mae has steep increases to the interest rate and the mortgage insurance premiums if your scores are low. 

A couple of good things about Fannie Mae is that you can buy a larger priced home and have a large loan amount due to FHA only allowing most Kentucky Home Buyers a maximum mortgage loan amount of $356,000 for a max FHA loan and $545,000 for Fannie Mae Conventional loans in Kentucky for 2020.

Lastly when it comes to mortgage insurance, FHA mortgage insurance premiums are for life of loan while Fannie Mae mortgage insurance premiums drop off when you develop 80% equity position in your house. 

But as a tell most people, nobody has a loan for 30 years, and the average mortgage is either refinanced or home sold within the first 5-7 years. 

VA Loans- 

VA loans offer eligible Veterans and Active Duty Personnel to buy a home going no money down with no monthly mortgage insurance. This is probably the best no money down loan out there since the rates are traditionally very low on comparison to other government insured mortgages and no monthly mortgage insurance. The VA loan can be used anywhere in the state of Kentucky with the maximum VA loan limit being removed for 2021

USDA Loans- 

USDA loans offer people buying a home in rural areas (typically towns of $20k or less) to buy a home going zero down. 

Income Limits for: Most Locations

Household of 1-4

$110,650

- OR -

Household of 5-8*

$146,050

For non-specific areas, the income limits are $110,650 for a 1-4 member household and $146,050 for a 5-8 member household.

*If a household exceeds 8 members, each additional member receives 8% of the 4-person income limit for their area towards the total.

KHC or Kentucky Housing-

Kentucky First Time Home Buyers typically use KHC for their down payment assistance. KHC currently offers $10,000 for down payment assistance and sometimes throughout the year they will offer low mortgage rates on their mortgage revenue bond program.

 The down payment assistance usually never runs out because you have to pay it back in the form of a second mortgage. It helps a lot of home buyers that want to buy in urban areas that cannot utilizer the USDA program in rural areas. Most of the time the first mortgage is a FHA loan tied with the 2nd mortgage fore down payment assistance.  All KHC programs require a 620 score and rates are locked for 45 days. 

5. What if I have had a bankruptcy or foreclosure in the past? 

FHA and VA are the easiest on previous bankruptcies. FHA and VA both require 2 years removed from the discharge date on a Chapter 7. If you are in the middle of a Chapter 13, FHA will allow for financing with a 12 month clean history payment to the Chapter 13 courts, and with trustee permission. 

VA requires 2 years removed from a foreclosure (sheriff sale date of home) and FHA requires 3 years. 

USDA requires 3 years removed from both a foreclosure and bankruptcy, but on the foreclosure they do not go off the sale date. This may save you a little time if you had a previous foreclosure. 

Fannie Mae (Conventional Loan)

Fannie Mae is by far the strictest. They require 4-7  years out of a foreclosure or bankruptcy 

If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

 Text or call phone: (502) 905-3708

email me at kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only.  The posted information does not guarantee approval, nor does it comprise full underwriting guidelines.  This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the views of my employer. Not all products or services mentioned on this site may fit all people

usmortgagecalculator.org

No Money Down Home Loans Available in Kentucky in 2023

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?

Answer. Most lenders will wants a middle credit score of 620 to 640 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 620 to 640 middle score on their programs.


If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit score with at least 10% down payment, you will find it hard to get the loan approved because lenders will create overlays to protect their interest and maintain a good standing with FHA and HUD.


Another popular no money down loan is VA. Most VA lenders will want a 620 middle credit score but like FHA, VA on paper says they will go down to a 500 score, but good luck finding a lender for that scenario.


A lot of times if your scores are in the high 500’s or low 600’s range, we can do a rapid rescore and get your scores improved within 30 days.

∘ Does it costs anything to get pre-approved for a mortgage loan

Answer: Most lenders will not charge you a fee to get pre-approved, but some lenders may want you to pay for the credit report fee upfront. Typically costs for a tri-merge credit report for a single borrower runs about $50 or less. Maybe higher if more borrowers are included on the loan application.

∘ How long does it take to get approved for a mortgage loan in Kentucky?

Answer: Typically if you have all your income and asset documents together and submit to the lender, they typically can get you a pre-approval through the Automated Underwriting Systems within 24 hours. They will review credit, income and assets and run it through the different AUS (Automated Underwriting Systems) for the template for your loan pre-approval. Fannie Mae uses DU, or Desktop Underwriting, FHA and VA also use DU, and USDA uses a automated system called GUS. GUS stands for the Guaranteed Underwriting System.


If you get an Automated Approval, loan officers will use this for your pre-approval. If you have a bad credit history, high debt to income ratios, or lack of down payment, the AUS will sometimes refer the loan to a manual underwrite, which could result in a longer turn time for your loan pre-approval answer

∘ Are there any special programs in Kentucky that help with down payment or no money down loans for KY First Time Home Buyers?

Answer: There are some programs available to KY First Time Home Buyers that offer zero down financing: KHC, USDA, VA, Fannie Mae Home Possible and HomePath, HUD $100 down and City Grants are all available to Kentucky First Time Home buyers if you qualify for them. Ask your loan officer about these programs

∘ When can I lock in my interest rate to protect it from going up when I buy my first home?

Answer: You typically can lock in your mortgage rate and protect it from going up once you have a home picked-out and under contract. You can usually lock in your mortgage rate for free for 90 days, and if you need more time, you can extend the lock in rate for a fee to the lender in case the home buying process is taking a longer time. The longer the term you lock the rate in the future, the higher the costs because the lender is taking a risk on rates in the future.


Interest rates are kind of like gas prices, they change daily, and the general trend is that they have been going up since this summer.

∘ How much money do I need to pay to close the loan?

Answer: Depending on which loan program you choose, the outlay to close the loan can vary. Typically you will need to budget for the following to buy a home: Good faith deposit, usually less than $500 which holds the home for you while you close the loan. You get this back at closing; Appraisal fee is required to be paid to lender before closing. Typical costs run around $400-$450 for an appraisal fee; home inspection fees.

Even though the lender’s programs don’t require a home inspection, a lot of buyers do get one done. The costs for a home inspection runs around $300-$400. Lastly, termite report. They are very cheap, usually $50 or less, and VA requires one on their loan programs. FHA, KHC, USDAS, Fannie Mae does not require a termite report, but most borrowers get one done.

There are also lender costs for title insurance, title exam, closing fee, and underwriting fees that will be incurred at closing too. You can negotiated the seller to pay for these fees in the contract, or sometimes the lender can pay for this with a lender credit.


The lender has to issue a breakdown of the fees you will incur on your loan pre-approval.

How long is my pre-approval good for on a Kentucky Mortgage Loan?

Answer: Most lenders will honor your loan pre-approval for 60 days. After that, they will have to re-run your credit report and ask for updated pay stubs, bank statements, to make sure your credit quality and income and assets has not changed from the initial loan pre-approval.

How much money do I have to make to qualify for a mortgage loan in Kentucky?

Answer: The general rule for most FHA, VA, KHC, USDA and Fannie MAe loans is that we run your loan application through the Automated Underwriting systems, and it will tell us your max loan qualifying ratios.


There are two ratios that matter when you qualify for a mortgage loan. The front-end ratio, is the new house payment divided by your gross monthly income. The back-end ratio, is the new house payment added to your current monthly bills on the credit report, to include child support obligations and 401k loans.


Car insurance, cell phone bills, utilities bills does not factor into your qualifying rations.


If the loan gets a refer on the initial desktop underwriting findings, then most programs will default to a front end ratio of 31% and a back-end ratio of 43% for most government agency loans that get a refer. You then take the lowest payment to qualify based on the front-end and back-end ratio.


So for example, let’s say you make $3000 a month and you have $400 in monthly bills you pay on the credit report. What would be your maximum qualifying house payment for a new loan?


Take the $3000 x .43%= $1290 maximum back-end ratio house payment. So take the $1290-$400= $890 max house payment you qualify for on the back-end ratio.


Then take the $3000 x .31%=$930 maximum qualifying house payment on front-end ratio.


So now your know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.

Customer Testimonials

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 2019

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 recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan.



Kayle Griffin



“Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010



Tim Beck


“Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.” September 1, 2010


Nancy Nalley


“I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them. August 23, 2012


Jon ClarK



“Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011



RICHARD VOLZ , Residential Sales , Remax Foursquare Realty



“When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgeable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say's they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!” August 21, 2010

Stacie Drake



"We first used 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



Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn't expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS.


Cee Bell August 2017

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/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

Can I Get A Mortgage Loan in Kentucky After a Bankruptcy?

There are two different types of Bankruptcies for most consumers.

 
1. Chapter 7 Bankruptcy in Kentucky


Chapter 7 bankruptcy involves selling off your assets to pay back your outstanding debts. If you have significant equity in your home, it may be sold. It's possible to keep the property during bankruptcy, but the lender retains a lien on it, meaning you have to keep making payments on the loan or the lender could foreclose on it. Usually done by borrowers you don't have any assets and is filing on unsecured debts like, medical bills, collections, credit cards, personal loans etc.

2. Chapter 13 Bankruptcy in Kentucky


Chapter 13 bankruptcy Instead of using assets to pay off their debt, borrowers can keep their property and enter into a repayment plan. That means you're likely to keep your home if you file for Chapter 13 bankruptcy protection. Usually people with assets do this loan program. i.e. equity in home, and substantial savings account of money that is not tied-up in retirement accounts.


When can you buy a Home After Chapter 7 or 13 Bankruptcy?


It really depends on what type of loan you are getting. I breakdown the different requirements below:


Chapter 7 Bankruptcy Guidelines for FHA, VA and Conventional Loans


Kentucky FHA Loans: FHA loans require that you wait at least two years from your Chapter 7 bankruptcy discharge date before you can buy a home again.


Kentucky VA Loans: You need to waits 2 years from the discharge date.

Kentucky Conventional mortgages: You need to wait 4 years the bankruptcy discharge date before you can apply for conventional mortgage

Chapter 13 Bankruptcy Guidelines for FHA, VA and Conventional Loans.

Kentucky FHA loans: You'll need to wait at least a year from the start of your payout period under Chapter 13 bankruptcy and then prove a perfect pay history with the courts and get permission from the Chapter 13 trustee to borrower a certain amount of mortgage loan. They will say ya or nay-usually they will okay it.


Kentucky VA Loans: You can potentially use a VA loan after 1 year in the Chapter 13 plan, but you must prove an on-time pay history from the courts and permission from the trustee to borrow a certain amount on the mortgage loan.


Kentucky Conventional mortgages: The waiting period for Chapter 13 bankruptcy will depend on whether your case was discharged or dismissed. In the case of dismissal, which doesn't prevent creditors from collecting qualifying debts, you must wait at least four years to refinance, though under extenuating circumstances, you only need to wait two years. If your case was discharged, the waiting period is shortened to two years, regardless of the circumstances.


If you have filed more than one bankruptcy within the past seven years, you have to wait five years before you can qualify for any type of home loan.






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/

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Kentucky First Time Home Buyer Programs

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky First Time Home Buyer Programs For Home M...: 

Kentucky first-time homebuyer programs KHC  Regular Down Payment Assistance :  Receive a loan of up to $6,000 and repay it over 10 years at ...

How To Buy A Kentucky Home With No Money Down

These loans are through a federal government-backed loan program. Eligible homebuyers in Kentucky  can use the following loan programs without having to put money down.

Kentucky USDA Home Loan

A U.S. Department of Agriculture (USDA) home loan is also known as a Rural Housing Loan. While it typically applies to those who live in rural areas, the program is also available to low-to-moderate-income households in some less-populated suburban areas within or near major cities. With this loan, there is no down payment required and no set maximum home purchase price. Additionally, homeowners may have the option to include home repair costs in the loan.

To apply for a USDA home loan, applicants must meet the following requirements:

• The gross total of a household's income cannot exceed 115 percent of the county's average income.
• A homebuyer's debt-to-income ratio cannot exceed 45 percent.
• The location of a homebuyer's potential home must be in an area deemed eligible according to the USDA's eligibility map.
• The home must be a primary residence.

Kentucky VA Home Loan

A Kentucky VA home loan is backed by the U.S. Department of Veteran Affairs and is set aside for active-duty military members, veterans and their family members. This loan allows homebuyers to pay a one-time-only funding fee of 2.3 percent of the loan value instead of purchasing mortgage insurance. For every use of a VA loan thereafter, the required funding fee without a down payment is 3.6 percent.
To qualify for a VA home loan, homebuyers must meet at least one of the following requirements:

• Served 90 days of consecutive service during wartime.
• Served 181 days of consecutive service during peacetime.
• Is the widow of a qualifying service member.
• Served in the National Guard or Reserves for more than six years.

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What is a Kentucky USDA Loan?

The U.S. Department of Agriculture offers a 100% financing mortgage. The program is also technically called a Section 502 mortgage, however, it’s more commonly known as ’Rural Housing Loan’ or a ’USDA loan.’

Despite the term “rural loan“ the USDA loan program is also available to low-to-moderate income homebuyers in less-populated suburbs of some major U.S. cities suburban areas.

Some key benefits of the USDA loan include:

• No down payment requirement
• No maximum home purchase price 
• Eligible home repairs and improvements may be included in your loan amount
• Upfront guarantee fee can be added to the loan balance at closing; mortgage insurance is collected monthly

 

USDA Home Loan Requirements

To be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be in an eligible rural area as defined by USDA. According to the USDA website applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house as well as demonstrate a willingness and ability to repay debt. (Note: household income includes the income of all adult household members.)

Additional eligibility requirements can be found at the USDA Income and Property Eligibility website.

USDA mortgage rates are often lower than rates for comparable, low- or no-down-payment mortgages. For qualified applicants, financing a home via the USDA can be the lowest-cost path to homeownership.

 

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 What is a VA Loan?

A VA loan is a loan guaranteed by the United States Department of Veteran Affairs. Designed for active-duty military, Veterans, and their families, this loan requires zero money down. While standard mortgage insurance is not required, the Funding Fee is specific to VA loans and is paid upfront. For purchase loans, the one-time fee usually ranges from 1.4% to 2.6% of the loan amount, depending on the loan down payment.  

The VA is technically not a mortgage lender as private lenders originate the loan, and the VA guarantees a portion of it. No down payment is required if the sales price isn’t higher than the properties appraised value.

Although VA loans are credit flexible, applicants must have a stable income, and a steady job, however, a Veteran may be retired to qualify. All applicants must also meet some basic military service requirements.

 

VA Loan Requirements

Here are a few of the requirements listed by the U.S. Department of Veterans Affairs.  

• Served 90 consecutive days of active service during wartime (or less if you were discharged for a service-connected disability.
• Served 181 days of active service during peacetime
• Served more than six years with the National Guard or Reserves (or 90 days under Title 32 with at least 30 of those days being consecutive)

There are also VA loan programs for surviving spouses of a service member who died in the line of duty or from a service-related disability.

For the lender to make a VA-backed loan you must provide proof that you meet the eligibility requirements. A Certificate of Eligibility, or (COE,) serves as that proof. Your COE will have the entitlement amount on it so the lender knows exactly how much the VA will give them if you were to default. Detailed information on how to obtain a COE for a loan can be found on the VA website.

 

Kentucky FHA Loan Down Payment

Benefits of the Kentucky FHA Home Loan:

• • Low down payment requirement (as low as 3.5% for 580 score )
  • Flexibility on debt-to-income ratio up to 56.9%
  • Qualify with less-than-perfect credit with a 500 credit score with 10% down and 580 credit score with 3.5% down payment
  • Down payment funds can be gifted, grants, down payment assistance from approved funds
  • Purchase or refinance loan options available

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Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

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

https://www.mylouisvillekentuckymortgage.com/

 

KENTUCKY FIRST TIME HOME BUYERS MORTGAGE REQUIREMENTS

Kentucky First Time Home Buyers Programs 

Kentucky First Time Home Buyer Programs so you can buy a home with little or nothing down at really low fixed rates.

There are basically 4 mortgage programs for first time home buyers in Kentucky to consider:

1. FHA: 

Kentucky FHA loans are a popular choice in Jefferson County Kentucky first time home buyers because they allow the least down payment of 3.5%, vs Fannie Mae which now requires a 5% investment on primary residences.

The current credit score requirements center around the 580 score for most FHA loans in Kentucky, with no bankruptcies in the last 2 years and no foreclosures in the last 3 years.

Even though FHA insure a mortgage loan down to a 580 credit score or lower sometimes, it is very difficult to find a lender that will approve the loan with scores below 620. Keep that in mind.

The house payment will need to be around 30% of your gross monthly income. For example if you gross around $3000 a month, then the maximum mortgage payment you would qualify would be $1000 a month. If the loan comes back as an accept, the debt to income ratio can be substantially higher than the 31% rule.

All FHA loans are pre-approved through an AUS, an automated underwriting system upfront that will dictate your loan approval. The software underwriting engine looks at your credit, income, assets and figures your loan approval and will recommend an accept, refer/eligible, or refer/ineligible, or out of scope.

Most FHA investors will want a Accept on your underwriting findings to do a loan. It it comes back referred, then there are additional conditions or overlays that could stop your loan from being approved.




Check Kentucky FHA Rates Here----->>>>>>>>

2. VA:

Kentucky VA loans require no down payment but you must have a VA certificate of Eligibility issued by the Veterans Administration to purchase a home using your VA loan entitlement.

The current credit score that most Kentucky VA lenders want is 580. There can be no bankruptcies or foreclosures in the last two years with good reestablished credit.

The maximum debt to income ratio is 41% with a residual income of around $1000 a month after you pay all your bills. For example, if you make $4000 gross monthly, then the maximum house payment along with your other household bills would be set at $3000 a month so as you have the $1000 residual income requirement met. There are some variances on the residual income to whereas it is based on the number of people living in the household and which state you live in.


Check Kentucky VA Mortgage Rates Here------>>>>>>>


3. USDA/Rural Housing:

USDA or Rural Housing loans are not available in the more highly populated counties in Kentucky . The counties of Jefferson and Fayette Counties are not eligible for USDA loans.

USDA loans require no down payment and are subject to income and property eligibility requirements by County..


Check Kentucky USDA  Income Limits Here"----->>>>

Check Kentucky USDA Property Eligibility Limits Here--->>>>

All Kentucky Rural Housing Loans are ran through GUS, Guarantee Underwriting System, an online to determine your loan approval

The Automated Underwriting engine will come back with an Accept, Refer, or Ineligible.

Most USDA mortgage investor want an Accept on the initial underwriting approval to do the loan.

640 is the score that most USDA lenders want, but USDA will go down to a 580 credit score in their guidelines but it is very difficult to get approved.

If you have a score below 640 and trying to go USDA, work on getting your credit scores up first.

4. Kentucky Housing Corp or KHC 

KHC is used for mostly applicants in urban areas of Kentucky that don't have access to USDA or other government agencies to buy a home with no down payment.
Down Payment Assistance for Ky First Time Home Buyer, 100% Financing

How the Down Payment Assistance Program (DAP) Works

A minimum of 3.5% down payment is required with this loan. Down payment assistance loans are available from $4500-$6,000, and are paid back over a period of ten years. They are typically offered to buyers with limited cash reserves and carry an interest rate of 1 to 5.5%. These loans can make a critical difference to buyers for whom the down payment is an obstacle. Buyers whose 3.5% down payment is less than the $6000 limit may choose to use the remainder of a down payment loan to pay closing costs, further reducing the amount needed to bring to closing.