A Kentucky Mortgage Loan Officer that has closed over 600 home loans specializing in Kentucky First Time Homebuyer Loans to include the following FHA, VA, USDA, Rural Housing, Down Payment Assistance Loan from Kentucky Housing Corp or KHC and the Fannie Mae Home Path HUD $100 Down Mortgage Program in Kentucky. Call/Text 502-905-3708 with your mortgage questions or email kentuckyloan@gmail.com I try to respond to all requests within minutes during regular business hours. NMLS# 57916 Joel Lobb Loan Originator, American Mortgage Solutions NMLS ID. 1364 Equal Housing Lender
Originally posted on Kentucky FHA Mortgage Lender: Kentucky FHA Loan Requirements The requirements for Kentucky FHA loans are set by HUD. Borrowers must have a steady employment history of the last two years within the same industry or line of work. Recent college graduates can use their transcripts to supplant the 2 year work history…
Kentucky FHA Loan Requirements for 2024 to include Credit Fico Scores, Down Payment, Income and Job history
FHA
An FHA loan is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment.
Minimum Credit Score is 500 with at least 10% down
Minimum Credit Score is 580 if you put less than 10% down
Upfront and Monthly Mortgage Insurance is required regardless of the Loan to Value
FHA Loans are only available for financing primary residences
Maximum Debt to Income Ratio of 50% (unless mitigating factors justify allowing a higher DTI)
Kentucky FHA Loan Requirements
Kentucky FHA Loan Requirements
The requirements for Kentucky FHA loans are set by HUD.
Borrowers must have a steady employment history of the last two years within the same industry or line of work. Recent college graduates can use their transcripts to supplant the 2-year work history rule as long as it makes sense.
Self-Employed will need a 2-year history of tax returns filed with IRS. They will take a 2-year average.
FHA requires a 3.5% down payment. Can be gifted from family member or from retirement savings plan, or money saved-up. Any type of cash deposits is not allowed for down payments. No exceptions to this rule!! This is one of the biggest issues I see in FHA underwriting nowadays.
FHA loans are for primary residence occupancy. Not rental houses.
Borrowers must have a property appraisal from a FHA-approved appraiser.
Borrowers’ front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance, homeowners’ insurance) needs to be less than 31 percent of their gross income, typically. You may be able to get approved with as high a percentage as 43 percent. If the Automated Underwriting System gives you an Approved Eligible you can go higher on the debt ratios
Borrowers must have a minimum credit score of 580 for maximum financing with a 3.5% down payment
Borrowers must have a minimum credit score of 500-579 for maximum LTV of 90 percent with a minimum down payment of 10 percent. Most lenders will not go below 580 to 620 score, and very few lenders will go to 580 score. It’s best to work on getting your scores up before you apply or work with a loan officer to improve them.
2 years removed from Chapter 7 is required with good pay history after bankruptcy
1 year removed from Chapter 13 is okay with an excellent pay history with the Chapter 13 plan and permission from trustee. You will need to qualify with the Chapter 13 payment along with new house payment. Again, scores will play into your loan pre-approval.
Typically, borrowers must be three years out of foreclosure and have re-established good credit. Exceptions can be made if there were extenuating circumstances and you’ve improved your credit. If you were unable to sell your home because you had to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.
FHA
Low Down Payment which can be 100% gift from family member or Grant Program
Seller can pay closing costs-Maximum 6% of purchase price
There is maximum mortgage amount for each county. Check FHA loan limit for your county.
Non-occupant co-signers are allowed on this program. FHA Approved Condos-Single family home-2-4 unit properties, and PUDs are eligible.
Fast automated underwriting approval available. Also, the file can be manually underwritten by a live person to get loan approval if you do not receive approval through automated underwriting system.
FHA Foreclosure Program
Must be HUD Owned property or FHA Foreclosure in HUD Participating Communities
$100 Down Payment than standard FHA program
580 minimum credit score
Single family, 1-4 unit properties, HUD approved condominiums, and PUDS eligible
Kentucky Down payment assistance loans are available up to $10,000 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.
Eligibility: Both first-time and repeat home buyers purchasing a single-family dwelling. Purchase price can be no more than $481,176. Applicant’s income must be within applicable secondary market limits in effect. If KHC’s Homebuyer Tax Credit is used, then household income must be under the Homebuyer Tax Credit income limits.
Mortgage Revenue Bond (MRB) First Mortgage Products
Eligibility: Must be a first-time home buyer, unless purchasing a single-family dwelling in a targeted county. Purchase price can be no more than $481,176. Gross annual household income must be within applicable limits in effect. All non-borrowing occupants age 18 or older must disclose income and complete Non- Borrowing Occupant Form.
KHC ELIGIBILITY AND CREDIT STANDARDS OVERVIEW (Not intended to be an all-inclusive list.)
Home Buyer Eligibility
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KHC can help both first time and repeat home buyers statewide.
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Must be a U.S. citizen or legal status to be in U.S.
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Applicant’s income ONLY through Secondary Market.
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Property must be the borrower’s principal residence.
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Borrower cannot own any other residential property at time closing for all loans with MRB Funding.
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Any Borrower that meets both the income and purchase price limit can have access to Down Payment Assistance.
Kentucky Housing Credit Standards
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620 minimum credit score required for FHA, VA, & RHS.
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660 minimum credit score required for Conventional.
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Debt ratios: 40/50%
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Collections in most cases do not need to be paid-off in full.
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Bankruptcies and foreclosures must be discharged two to seven years.
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Non-taxable income can be grossed-up.
Property Eligibility
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Both new and existing property.
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Both new & existing Manufactured Housing.
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With RHS only new construction Manufactured housing is allowed.
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Purchase price limit of $481,176 for Secondary Market, MRB Loans, and Tax Credit.
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Full appraisal required on all KHC loans.
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With Existing Property, VA is the only loan product that requires a termite inspection.
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A termite soil treatment certificate is required on ALL new construction
Regular Down Payment Assistance Programs (DAP) Only home buyers obtaining a Kentucky Housing Corporation first mortgage are eligible for DAP funds.
Interest Rate with DAP applicable.
Eligible KHC Mortgages FHA, RHS, VA, HFA Preferred, & HFA Preferred Plus 80 Income Eligibility
Secondary Market or Mortgage Revenue Bond Property Eligibility New and Existing Properties
Borrower Eligibility First-time and Repeat Home Buyers Amount Up to $10,000
Not required to be at maximum LTV first mortgage amount Terms 3.75% amortized over 10 years Purchase Price Limit $481,176 AUS
Borrower must qualify with additional monthly payment.
With AUS approval, can go up to 40/50% with all loans.
Required Repairs Buyer or seller must use OWN funds to pay for repairs DAP
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#57916
— 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.
The requirements for Kentucky FHA loans are set by HUD.
Borrowers must have a steady employment history of the last two years within the same industry or line of work. Recent college graduates can use their transcripts to supplant the 2 year work history rule as long as it makes sense.
Self-Employed will need a 2 year history of tax returns filed with IRS. They will take a 2 year average.
FHA requires a 3.5% down payment. Can be gifted from family member or from retirement savings plan, or money saved-up. Any type of cash deposits are not allowed for down payments. No exceptions to this rule!! This is one of the biggest issues I see in FHA underwriting nowadays.
FHA loans are for primary residence occupancy. Not rental houses.
Borrowers must have a property appraisal from a FHA-approved appraiser.
Borrowers’ front-end ratio (mortgage payment plus HOA fees…
Max housing ratios of 40% and 50% respectively. Meaning, your gross monthly income divided by your total house payment cannot be more than 40% of your total gross monthly income. And the bills listed on the credit report (monthly payments) combined with new house payment cannot be more than 50% of your total gross monthly income.
Household Income limits by county. Most limits are around $136,000 for the largest counties in Kentucky like Jefferson, Fayette,
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.
Glossary of Mortgage Terms to Know For A Kentucky Mortgage Loan.
ACCRUED INTEREST: Accumulated interest since the principal investment that has not yet been paid. AMORTIZATION: Paying off debt, principal and interest, with a fixed repayment schedule in regular installments over a fixed period of time. ANNUAL PERCENTAGE RATE (APR): The annual rate charged for borrowing money expressed as a percentage. APR takes into account interest, discount points, lender fees and mortgage insurance. APPLICATION FEE: A fee charged by a lender to cover the initial costs of processing a loan application. APPRAISAL: A written estimate of a property’s current market value, based on the current condition of the property and recent sales information from similar properties in the same area. APPRAISAL FEE: The cost to have a licensed, certified appraiser estimate the market value of a property as of a specific date. BORROWER: An individual who receives a loan from a lender with the intention of repaying the loan in full over the agreed upon time-frame. CAP: A limit on the amount the interest rate can increase or decrease for an ARM, either in an adjustment period or over the life of the loan. CERTIFICATE OF ELIGIBILITY: A document given to qualified veterans entitling them to a VA loan. Obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility). CERTIFICATE OF REASONABLE VALUE (CRV): An appraisal issued by the VA. CLOSING: Also called “settlement,” is when all parties in a mortgage loan transaction sign the necessary documents to legally transfer property and funds. CLOSING COSTS: Expenses incurred during the home purchase or refinance process that are paid at closing, including the loan origination fee, discount points, attorney’s fees, title insurance, appraisals, etc. CLOSING DISCLOSURE (CD): A five-page document listing final details about the mortgage such as loan terms, projected monthly payments and total closing costs. COMMITMENT LETTER: A legal document issued to a loan applicant from the lender to provide them with a mortgage under certain terms and conditions. COMPARABLES: An abbreviation for “comparable properties;” recently sold properties with similar characteristics and location to the subject property that help the appraiser determine the fair market value of the subject property. CONVENTIONAL LOAN: A loan not secured by the U.S. government, such as FHA, VA, or USDA. DEBT-TO-INCOME RATIO (DTI): A percentage of an individual’s debt, measured by dividing total monthly recurring debt payments by gross monthly income. DEED: A written legal document showing who owns a particular property. This must be signed to transfer a property’s ownership rights to a new homeowner. DEPARTMENT OF VETERANS AFFAIRS (VA): A government agency that manages benefits and other services for eligible veterans of the military. DOWN PAYMENT: The upfront money paid to purchase a home. It is deducted from the total amount of a mortgage and represents the beginning equity.
EARNEST MONEY: A security deposit made by a buyer to a seller to demonstrate that the buyer is serious and willing to purchase the property. EQUAL CREDIT OPPORTUNITY ACT (ECOA): Federal law enacted in 1974 making it unlawful for any creditor to discriminate based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs. EQUITY: The portion of a property that homeowner owns. Equity is the difference between the home’s fair market value and the outstanding balance of the mortgage on the property. ESCROW: A third party that holds money to ensure pay property taxes, homeowner’s insurance or mortgage insurance is paid on time. HAZARD INSURANCE (HOMEOWNER’S INSURANCE): Protects a homeowner against loss due to fire or other natural disasters in exchange for a premium paid to the insurer. HOMEOWNERS ASSOCIATION (HOA): An organized group of owners, usually found in condominiums or closed communities, who manage the common areas and enforce rules. INTEREST RATE: The amount charged to borrow money from a lender, expressed as a percentage of the principal loan. LOAN ESTIMATE (LE): A three-page document that explains the important details about a borrower’s loan, including the estimated interest rate, monthly payment and total closing costs for the loan. The LE will be provided within three business days of the lender receiving the loan application. LOAN-TO-VALUE RATIO (LTV): The percentage of the loan amount to the appraised value of the property. LOCK-IN RATE: An offer by a lender to guarantee an interest rate for a set period of time. MARKET VALUE: Also called “home value;” the amount for which a house will likely sell. MORTGAGE INSURANCE (MI): Insurance that protects the lender if a borrower defaults on their mortgage loan. MI is usually required if the down payment is less than 20% of the purchase price. ORIGINATION FEE: A fee charged by a lender to cover the administrative costs of processing a loan. PREPAYMENT: An advanced principal payment prior to the due date, thus saving money on interest. PREPAYMENT PENALTY: A fee charged to borrowers for paying ahead on their mortgage. PRINCIPAL: Outstanding loan balance still owed to the lender, not including interest. REALTOR: A licensed real estate professional who represents a buyer or seller in a real estate transaction in exchange for a commission; a member of the National Association of Realtors. REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA): A federal law requiring lenders to provide disclosures to borrowers informing them of loan settlement costs. These guidelines provide acceptable practices and fees in real estate transactions. SECOND MORTGAGE: An additional mortgage, or lien, placed on a property with subordinate rights to the first mortgage. TERM: The period of time that covers the life of the loan, usually in years. TITLE: A document that indicates ownership of a property, as well as rights of ownership and possession of the property. TITLE INSURANCE: Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss due to disputes over property ownership.
There are several alternative mortgage options available if you don’t have a down payment, haven’t established a strong credit history, or are unable to supply documentation for a “traditional” mortgage. Some options include:
DOWN PAYMENT ASSISTANCE (DPA) by KHC
These programs often come from states and municipalities allowing you to purchase a home with a smaller down payment. Many DPA programs come in the form of a repayable second mortgage or a deferred or forgiven grant
Kentucky FHA (FEDERAL HOUSING ADMINISTRATION)
An FHA loan is insured by the Federal Housing Administration and is ideal for low- or moderate-income individuals or families, or borrowers with past credit problems or limited down payment resources.
FHA loans are popular for Kentucky first-time home buyers because they offer down payment options as low as 3.5% and an upfront Mortgage Insurance Premium (MIP) financed into your loan amount. 100% of the money needed at closing is allowed to be a gift.
FHA also allows a “streamline” refinance when rates go down to lower your interest rate.
Kentucky VA (VETERAN’S ADMINISTRATION)
If you have served or are currently serving in the U.S. military, we thank you for your service! The VA loan program offers low rates and low- or no-money-down payment options. VA loans do not require mortgage insurance, and also offer a low-cost Interest Rate Reduction Loan (IRRL) program allowing you to refinance and lower your mortgage payment. The maximum VA loan amount varies, so check with your Mortgage Professional for up-to-date information.
Kentucky USDA Mortgage Loans
If you plan to live in a more rural area, the USDA (United States Department of Agriculture) has a variety of loans to help low- or moderate income individuals and families buy, repair or renovate a home. USDA loans often carry lower interest rates and do not require a cash down payment. Not all properties qualify, so check with your
KENTUCKY HOME PURCHASE DOCUMENT CHECKLIST
l. INCOME SALARY/HOURLY Most recent 30 days of pay stubs Last 2 years of W2s Most recent tax return (pages 1 and 2) SELF EMPLOYED (all schedules) 2 years personal tax returns 2 years business tax returns P&L and balance sheet through most recent quarter (FHA & Jumbo required) OTHER (Social Security/Pension/Annuity) 2 years 1099s Awards letter
ASSETS (every page)
Most recent 2 months bank statements Most recent quarterly statement for 401K, Retirement, Profit Sharing accounts
PROPERTY
Purchase Contract: disclosures, addendums,
copy of Earnest Money check
Homeowner’s Insurance: Agent name and
MISCELLANEOUS (if applicable) Divorce Decree *These documents may Child support order upon receipt of fully ex Bankruptcy documents with discharge VA: Certificate of Eligibility (COE) / DD-214 Papers OTHER PROPERTIES OWNED: Mortgage Statement Proof of Insurance Proof of any association fees
GIFT LETTER: Evidence of transfer/deposit (Conventional) Evidence of transfer/deposit and document donor ability to gift (FHA)
THE 8 STEPS OF HOMEOWNERSHIP There are several events that will occur throughout your new home purchase process. This guide will help you fully understand the process to eliminate stress:
Save for Down Payment & Credit Scores
Apply for Pre-Approval
Determine Housing Criteria & Neighborhood
Hire an Agent & Start Your Home Search
Complete the Loan Application
Move Through the Loan Process
Set a Closing Date
Understand Monthly Mortgage Payments STEP 1: SAVE FOR DOWN PAYMENT & CREDIT SCORES Buying a home requires some upfront cash, including your down payment and closing costs. Financial experts typically recommend a down payment of 20% of the purchase price. However, you can purchase a home with a down payment as little as 0-3% of the purchase price. While you’re working on saving for your down payment, keep an eye on your credit score. Your credit score is a number that indicates how much of a credit risk you pose when you borrow money and helps determine your interest rate. Typically, the higher your score, the lower your rate. There are three different credit scores agencies: Equifax (BEACON), Experian (FICO Risk Model), and TransUnion (FICO Risk Score, Classic). Credit scores range from 300-850. Each credit reporting agency gives you different scores, but all three should be pretty similar. Your credit score is divided into five factors: 10% 10% 35% Payment History……………………………………………………. 35% Amounts Owed……………………………………………………… 30% Length of Credit History………………………………………. 15% Inquiries……………………………………………………………………. 10% Type of Credit Used………………………………………………. 10% 15% 30% Often, when you’re shopping for a mortgage, you may look for the best rate from multiple lenders. Each lender may pull your credit report which is typically bad for your score. However, credit reporting agencies distinguish a single loan search from a search for many new credit lines by the length of time the inquiries occur. Avoid lowering your score by completing your rate shopping within a short period of time, such as 14 days.
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/
Joel Lobb, American Mortgage Solutions (Statewide)
Joel has worked with KHC for 12 of his 20 years in the mortgage lending business. Joel said, “A lot of my clients would not have been able to purchase a home of their own or possibly delayed their purchase due to lack of down payment but with the $6,000 DAP loan program, this gets them into a house sooner and starts their path to homeownership while building equity instead of throwing their money away.”