How to get approved for a Kentucky Mortgage Loan in 2024

To determine if you can get approved for a Kentucky mortgage, several factors need to be considered, including your credit score, income, employment history, debt-to-income ratio, and down payment. Here’s a general overview of what lenders typically look for:

1. Credit Scores : Most Kentucky Mortgage  lenders prefer a credit score of 620 or higher for conventional loans. FHA loans may accept lower credit scores, starting around 500, but a higher score (typically 580 or above) can improve your chances and offer better terms.

   Here are the general credit score requirements for FHA, VA, USDA, and Fannie Mae mortgage loans in Kentucky:

   Loan Program	Minimum Credit Score Requirement	Additional Notes
   FHA Loan	500 to 580	A credit score of 500 to 579 requires a 10% down payment; a score of 580 or higher requires a 3.5% down payment.
   VA Loan	No minimum score	VA lenders are more flexible with credit scores, but most lenders prefer a score of 620 or higher.
   USDA Loan	no minimum score	USDA lenders  typically require a minimum credit score of 640 or higher.
   Fannie Mae Loan	620 or higher	Fannie Mae loans generally require a credit score of 620 or higher.

2. Income and Employment History: Lenders evaluate your income stability and 2 year employment history to ensure you have a reliable source of income to make mortgage payments. Consistent employment and sufficient income are crucial.

   Here’s a chart outlining the employment and work history requirements for Kentucky FHA, VA, USDA, and Fannie Mae mortgage loans:

   Loan Program	Employment History	Work History	Guidelines
   Kentucky FHA Loan	2 years of consistent employment with steady income	2 years of stable employment, including gaps explained	Employment can include salaried, self-employed, or contract positions. Gaps in employment may require explanations and documentation.
   Kentucky VA Loan	Stable income with continuous employment	Stable work history with no significant gaps	VA loans focus on the stability of income rather than specific employment duration. Military service may fulfill employment requirements.
   Kentucky USDA Loan	2 years of stable employment with reliable income	2 years of continuous employment, including explanations for gaps	USDA loans prioritize consistent income and employment history. Gaps may require explanations and additional documentation.
   Fannie Mae Loan	2 years of employment with steady income and job stability	2 years of stable employment, including explanations for gaps	Fannie Mae loans emphasize a stable work history with a focus on income stability. Gaps in employment may need explanations and additional documentation.

   These guidelines provide an overview of the employment and work history requirements for FHA, VA, USDA, and Fannie Mae mortgage loans. Lenders may have specific criteria and may consider factors such as income stability, type of employment, gaps in employment, and documentation of income sources. Borrowers should consult with a mortgage professional or lender to understand the detailed employment and work history requirements for their loan application.

3. Debt-to-Income (DTI) Ratio: This ratio compares your monthly debt payments to your gross monthly income. Lenders typically prefer a DTI ratio of 31% to 45% on front end ratio and up to 55% on the back-end ratio, although some may accept higher ratios with compensating factors.

   Here’s a chart comparing the debt ratio requirements forKentucky FHA, VA, USDA, and Fannie Mae mortgage loans:

   Loan Program	Front-End DTI Ratio	Back-End DTI Ratio	Guidelines
   Kentucky FHA Loan	Up to 45%	Up to 56.99%	Front-end DTI includes housing-related expenses (mortgage, taxes, insurance). Back-end DTI includes all monthly debts.
   Kentucky VA Loan	41% or higher	41% or higher	VA guidelines do not have specific DTI ratio limits but focus on residual income after accounting for housing and debt costs.
   Kentucky USDA Loan	Up to 33%	Up to 45%	Front-end DTI includes housing expenses. Back-end DTI includes all monthly debts.
   Kentucky Fannie Mae Loan	Up to 40%	Up to 50%	Front-end DTI includes housing expenses. Back-end DTI includes all monthly debts.

4. Down Payment: The amount of your down payment can also impact your approval chances. A larger down payment can lower your loan-to-value ratio (LTV) and reduce the lender’s risk.

   Here’s a down payment chart for Kentucky  FHA, VA, USDA, and Fannie Mae mortgage loans:

   Loan Program	Minimum Down Payment	Down Payment Source
   Kentucky FHA Loan	3.5% of purchase price	Can be from personal savings or gift funds
   Kentucky VA Loan	0% (No down payment)	N/A (VA loans offer 100% financing)
   Kentucky USDA Loan	0% (No down payment)	N/A (USDA loans offer 100% financing)
   Kentucky Fannie Mae Loan	3% to 5% of purchase price	Can be from personal savings or gift funds

    

5. Other Factors: Lenders may also consider your savings and assets, existing debts, credit history, and the type of mortgage you’re applying for (e.g., FHA, VA, USDA, conventional).

To get a more accurate assessment of your mortgage approval chances, it’s best to consult with a mortgage lender or broker. They can review your financial situation, credit history, and specific loan requirements to determine your eligibility and help you navigate the mortgage approval process.

Joel Lobb  Mortgage Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708
fax: 502-327-9119
email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

 

 

 

 

NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574

 

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).

 

Property Flipping Rules for Mortgages for FHA VA USDA Conventional Appraisals

FHA MORTGAGE LOANS AND FLIPPING RULE FOR APPRAISALS
Resales Occurring 90 Days or Fewer after Acquisition:
 Not eligible for FHA financing
Resales occurring between 91 days and 180 Days after Acquisition:
 Obtain 2nd appraisal if resold between 91 to 180 days after acquisition
 Obtain 2nd appraisal if resale price is 100% or more over price paid by seller
 If 2nd appraisal is more than 5% lower than value of first appraisal, the lower value must be used
 Borrower not allowed to pay for 2nd appraisal
Exceptions to FHA Flipping Rules:
 Property purchased by an employer or relocation company due to relocation of an employee
 Resales by HUD – REO program
 Sales by other government agencies (i.e., IRS, court-ordered, DEA, etc.)
 Sales of non-profit agencies approved to purchase HUD properties
 Acquisition due to inheritance
 Sales of properties by federally chartered financial institutions
 Sales of properties by GSE’s
 Sales of properties by local or state governments
 Sales by builders selling a new home
 Sales of properties in federally declared disaster areas
NOTE: Mortgage Company must obtain a 12-month chain of title to document time restrictions above.
VA MORTGAGE AND FLIPPING RULE

 No Flipping Rules – Overlays may apply or at Underwriter’s discretion
USDA RURAL HOUSING MORTGAGE FLIPPING RULES
 Lender is responsible to ensure that any recently sold property’s value is strongly supported when a significant
increase between sale and purchase occurs.
 Lender must ensure that the appraisal value is supported with validated comps and protect the borrower from
predatory lending.
Fannie Mae Appraisal Flipping Rules
 No Flipping Rules – Lender overlays may apply
Freddie Mac
 No Flipping Rules – Lender overlays may apply

 

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc. NMLS# 1364

10602 Timberwood Circle, Suite 3

Louisville, KY 40223

text or call my phone: (502) 905-3708
email me at kentuckyloan@gmail.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 view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.

 

 

 

Fannie Mae Mortgage Student Loan Solutions Frequently Asked Questions

 

Fannie Mae Student Loan Solutions Frequently Asked Questions
Listed below are common questions about Fannie Mae’s Student Loan Solutions.

Q1. How does Fannie Mae anticipate Student Loan Solutions will benefit
borrowers?
Forty-four million Americans today have student loan debt; seven in 10 graduates
of public and nonprofit colleges in 2015 had student loan debt; and recent
graduates averaged $34,000 in student loan debt.*
The Student Loan Solutions referenced in the Announcement address
challenges and obstacles to homeownership due to a significant increase in
student loan debt over the past decade and provide access to credit for qualified
borrowers. The new solutions give homeowners the opportunity to pay off one or
more student loans with a lower cost mortgage refinance, allow borrowers to
exclude certain monthly obligations paid by others from debt-to-income (DTI)
ratio, and make it more likely for borrowers with student debt to qualify for a
mortgage loan by allowing lenders to accept student debt payments included on
credit reports.
Student Loan Cash-Out Refinance
Q2. Why did Fannie Mae decide to offer the Student Loan Cash-Out Refinance
option and how did they get comfortable from a risk perspective?
The Student Loan Cash-Out Refinance offers simpler eligibility terms and
reduced fees designed to provide additional options for borrowers with student
debt.
Q3. Can part of a student loan debt be paid off with the refinance?
No, borrowers may not partially pay down a student loan. Student loan(s) must
be paid in full with the transaction. No other debts can be paid except PACE
(Property Assessed Clean Energy) loans.

Q4. Are high-balance loans eligible?
Yes.
Q5. Are there any technical considerations for lenders and technology service
providers?
Yes

Q6. Why did Fannie Mae make this policy change to exclude debt paid by
others and how did they get comfortable from a risk perspective?
The policy change provides greater access to credit for creditworthy
borrowers who meet all other requirements. It also supports Fannie Mae’s
broader efforts to mitigate the widespread challenges of student debt.
From a risk perspective, we are still requiring 12 months of documentation
to verify that a party (other than the borrower) has been paying the
monthly payments

.
Q7. What evidence needs to be provided?
Lenders must obtain the most recent 12 months’ cancelled checks (or
bank statements evidencing 12 months payments) from the party paying
the debt. Additionally, lenders must ascertain that there is not a history of
delinquent payments for that debt.
Q8. If someone else pays only a portion of the non-mortgage debt, is all of the
non-mortgage debt excluded in the DTI ratio, or is it only the portion that is
paid by the third party?
In order for the debt to be excluded from the DTI ratio, the other party has
to pay the complete monthly obligation every month for a minimum of 12
months.
Q9. What about mortgage debt?
Fannie Mae’s policy regarding mortgage debt has not changed. Fannie
Mae will continue permitting exclusion of the mortgage monthly payment
from a borrower’s DTI ratio when the lender can provide a 12-month
history of satisfactory payment by another party, but only if the other party
is obligated on the mortgage debt.

Q10. Why is Fannie Mae making this student loan payment calculation change
and how did they get comfortable from a risk perspective?
Fannie Mae recognizes the operational complexity of their previous policy
and this change simplifies the process for lenders. For student loans
associated with an income-driven repayment (IDR) plan, the student loan
payment, as listed on the credit report, is the actual payment the borrower
is making and that payment should be used in qualifying. Any future
increases in the IDR payment will be tied to similar increases in the
student’s income, mitigating concerns that IDR payments may create
payment shock.
Q11. Some IDR plans allow a borrower’s payment to go to $0. In that case, how
is the student loan payment calculated?
As long as the lender can provide documentation showing the IDR payment is
$0, they can qualify the borrower with $0 for the monthly qualifying payment.
Q12. What if the credit report does not reflect the correct student loan monthly
payment and there is documentation in the file to support a different
monthly payment?
If a lender has student loan documentation in the file (i.e., most recent
student loan statement), evidencing a different monthly payment than the
credit report, the lender may use that alternative documentation to support
the correct monthly payment amount. Alternatively, lenders may obtain a
credit report supplement or update the credit report to reflect the correct
monthly payment amount.
Q13. Will Fannie Mae continue allowing lenders to manually calculate an
estimated student loan payment in cases where the repayment terms are
unknown?
Yes. If the repayment terms are unknown and lenders choose not to
estimate a 1% (of unpaid principal balance) payment, lenders may calculate
a payment that will fully amortize the loan(s) based on the current prevailing
student loan interest rate and the allowable repayment period shown in the
table below.
The “current prevailing student loan interest rate” can be found on a variety
of websites. For example, see U.S. Department of Education Federal
Student Aid in E-1-03, List of Contacts (01/31/2017). The table below
specifies the repayment period to be used when calculating a fully amortizing
payment.

Calculating a Student Loan Repayment
Total Outstanding Balance Of All Student Loans Payment period payback
Example: Calculating an
Amortizing Payment
$1 – $7,499 10 years
Balance: $17,500
$7,500 – $9,999 12 years
Repayment Period: 15 years
$10,000 – $19,999 15 years
Interest Rate: 4.29%
$20,000 – $39,999 20 years
Monthly Amortizing Payment:
$132.00
$40,000 – $59,999 25 years
$60,000 + 30 years
Note: The lender is responsible for determining that the payment on the credit report or
other documents provided by the student loan lender or borrower are fully amortizing
payments

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

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.

Guidelines Changes on Student Loans for Conventional Fannie Mae, USDA, FHA, and VA Mortgage loans in Kentucky

Agreed, Student loans kill more mortgage loans now more than any other borrower that has good credit than anything else. The mortgage giants, ie, (Fannie Mae, Freddie Mac, USDA, FHA, VA, RHS) use to be very friendly toward student loans and if they were deferred or in forbearance we counted no payment for it.

Now with the massive explosion in student loan debts since the recession of 2008, student loan debt has now passed a lot of forms of debts and it’s growing every day since the cut backs from state and local governments and the increase of education costs being shifted toward the school and borrower.

Student loan debts by 2020 will be the biggest debt out there, surpassing mortgage debt.

They have reigned the requirement to make it more difficult to borrow now due to the increasing debts and fear of the borrower walking away from the house. You cannot walk way from student loan debts but you can a home, so tht is there thinking I am told by the higher-ups.

Recent changes to Fannie Mae and Freddie Mac guidelines have made it easier for some, but not all with student loan debt to still qualify for home mortgage loans.

Both Fannie and Freddie have set underwriting guidelines that if lenders follow, makes the selling of loans to Fannie Mae and Freddie Mac much easier.

Student Loans. How do lenders calculate?

Student loans can be in active repayment, some sort of reduced repayment (which is typically an income based repayment), or completely deferred.  While a student loan may be deferred for the next year or two, your mortgage loan is typically a 30-year loan. It only makes sense that lenders take current or future student loan payments into consideration when calculating debt ratios and affordability.

To avoid confusion, I’ll just talk about current guidelines for how lenders currently deal with your student loan debt for debt-to-income ratio purposes.

FHA Loans:

FHA loans must use the greater of 1% of the outstanding balance, or the payment listed on the credit report, unless you can document the payment is a fully amortizing payment. No income based repayment, graduated payments, or interest only payments allow

Fannie Mae Loans:

For deferred loans, must use 1% of the outstanding balance. For loans currently in repayment, use the payment listed on the credit report. If payment is listed as $0.00, but $0.00 is an active income based repayment, we must verify with the student loan company that $0.00 is the income based repayment.

Freddie Mac Loans:

For loans in repayment, use the amount listed on the credit report, or at least .50% (1/2%) of the outstanding balance, whichever is greater.

For deferred loans, must use the amount listed on the credit report, or 1% of the outstanding balance as reported on the credit report

.

USDA Rural Housing Loans:

For USDA loans, if the loan is deferred, income based payment, graduated payment, or interest only payment, must use the greater of   .5% of the outstanding balance, or the amount listed on the credit report.

VA Home Loans:

For VA loans, if payment is deferred at least 12 months past the loan closing date, no payment need be listed.

If payment will begin within 12 months of closing, use the payment calculated based on:

  a) 5% of the outstanding balance divided by 12

  b) The payment listed on the credit report if the payment is higher than calculated under (a).

  or

If payment on credit report is less than (a), a letter, dated within the last 60-days directly from the student loan company that reflects the actual loan terms and payment information is required to use the smaller payment.

These updated guidelines primarily help those currently in repayment, but with income based, graduated payment, and interest only payment student loans obtain conventional loans

The FNMA student loan calculation has been amended to the following

• If the credit report lists a payment amount, then the listed amount can be used for qualifying purposes
• If the credit reports lists a $0 payment or no payment at all, either of the following calculations can be used
  • o   1% of the outstanding student loan balance; OR
  • o   A calculated payment that will fully amortize the loan based on the loan repayment terms

 

Note: This applies to deferred student loans as well, no matter the length of deferment.

text or call my phone: (502) 905-3708

email me at kentuckyloan@gmail.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 view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.

 

What is the difference between the Kentucky Freddie Mac Home Possible and the Fannie Mae Home Ready Loan Program?

Kentucky Home Possible  vs. Kentucky Home Ready Mortgage Loan This easy to read chart gives you a side by side comparison of these products:

 

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Joel Lobb
Senior  Loan Officer

(NMLS#57916)

 

phone: (502) 905-3708

 Fax:     (502) 327-9119

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 view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org). We lend in the following states: Kentucky