Joel Lobb Appraisals & Property Requirements, HUD Homes & $100 Down

Kentucky FHA Mortgage Loans with Private Flood Insurance

HUD INCREASES FLOOD INSURANCE OPTIONS FOR KENTUCKY HOMEOWNERS WITH KENTUKY FHA MORTGAGES LIVING IN FLOOD AREAS

Federal Housing Administration to allow private flood insurance policies on insured single-family mortgages in special flood hazard areas

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), is announcing today that effective December 21, 2022, it will allow homeowners with FHA-insured mortgage financing to obtain flood insurance policies that conform to FHA requirements from private insurance providers. The change was announced through a final rule published in the Federal Register today and in a companion Mortgagee Letter, also published today, that provides implementation guidance for FHA-approved lenders.

FHA requires that insured mortgages for properties in Federal Emergency Management Agency (FEMA)-designated Special Flood Hazard Areas (SFHAs) have flood insurance. Previously, only flood insurance obtained through the National Flood Insurance Program (NFIP) was permissible for FHA-insured mortgages, which limited choices for consumers.

“Today, HUD is increasing the flood insurance choices available to individuals and families with FHA-insured loans in areas that FEMA has designated to be at special risk for flooding,” said HUD Secretary Marcia L. Fudge. “Flood insurance is required to ensure families and individuals are prepared if disaster strikes. Increasing consumer options for this important protection is one way we are building more resilient communities in the face of climate change.”

“We know borrowers face affordability challenges right now, yet a flood can be devastating to a family who is not properly insured,” said Federal Housing Commissioner Julia Gordon. “The choice to select a private flood insurance option may enable some borrowers to obtain policies that are less expensive or provide enhanced coverage.”

As part of its implementation, as of December 21, 2022, FHA will require lenders to provide detailed flood insurance coverage information when electronically submitting mortgages for FHA insurance on properties in SFHAs. This data collection is an objective included in HUD’s Climate Action Plan and will allow FHA to capture and analyze flood insurance information on mortgages in its portfolio at a more granular level than has been possible previously.

Ensuring that borrowers are protected against flood risk is a key component of HUD’s Climate Action Plan. In 2021, HUD released its Climate Action Plan in response to President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad. HUD has been implementing this broad approach to the climate crisis that reduces climate pollution; increases resilience to the impacts of climate change; protects public health; delivers environmental justice; and spurs well-paying union jobs and economic growth. The action today further guides the integration of climate resilience and environmental justice into HUD’s core programs and policies. For more information about HUD’s work to advance sustainable communities and address climate change, visit hud.gov/climate.

#fha #fhaloans #fhaloan #floodinsurance #mortgage #homeloan #homebuying #homebuyingtips

Joel Lobb Appraisals & Property Requirements, Bankruptcy, Foreclosure & Short Sales, Collections, Student Loans & Debts, Credit Scores & Bad Credit, FHA Guidelines & Requirements, HUD Homes & $100 Down, Income, Employment & DTI

Kentucky FHA Manual Underwriting Explained

KENTUCKY FHA MORTGAGE MANUAL UNDERWRITING GUIDELINES FOR VA RESIDUAL INCOME

Kentucky FHA Mortgage Manual Undewriting Guidelines for FHA Mortgage Refer Eligible or Manual Downgrades

Continue reading “Kentucky FHA Manual Underwriting Explained” →

Joel Lobb Appraisals & Property Requirements

FHA Guidelines for Well Water in Kentucky

Image result for fha minimum property standards

Below are Kentucky  FHA guidelines for a property that has well water and septic tanks for waste disposal .  The Kentucky FHA appraiser should be able to address the distance between the well and septic for distance requirements, and comment if public sewers are available.

Well water test will be required as a closing condition. FHA mortgages loans in Kentucky  require a septic inspection unless the appraiser mentions it is necessary.

(O) Water Supply Systems in Kentucky 

(1) Public Water Supply System The Mortgagee must confirm that a connection is made to a public or Community Water System whenever feasible and available at a reasonable cost. If connection costs to the public or community system are not reasonable, the existing onsite systems are acceptable, provided they are functioning properly and meet the requirements of the local health department.

(2) Individual Water Supply Systems (Wells) When an Individual Water Supply System is present, the Mortgagee must ensure that the water quality meets the requirements of the health authority with jurisdiction. If there are no local (or state) water quality standards, then water quality must meet the standards set by the EPA, as presented in the National Primary Drinking Water regulations in 40 CFR §§ 141 and 142. Soil poisoning is an unacceptable method for treating termites unless the Mortgagee obtains satisfactory assurance that the treatment will not endanger the quality of the water supply. Requirements for the location of wells for FHA-insured Properties are located in 24 CFR § 200.926d (f) (3). The following tables provide the minimum distance required between wells and sources of pollution for Existing Construction:

Individual Water Supply System for Minimum Property
Requirements for Existing Construction*
1 Property line/10 feet
2 Septic tank/50 feet
3 Drain field/100 feet
4 Septic tank drain field reduced to 75 feet if allowed by local authority
5 If the subject Property line is adjacent to residential Property then local well distance requirements prevail. If the subject Property is adjacent to non-residential Property or roadway, there needs to be a separation distance of at least 10 feet from the property line.
* distance requirements of local authority prevail if greater than stated above

The following provides the minimum requirements for water wells:

Water Wells Minimum Property Standards for New Construction
24 CFR § 200.926d(f)(1)
1 Lead-free piping
2 If no local chemical and bacteriological water standards, state standards apply
3 Connection of public water whenever feasible
4 Wells must deliver water flow of five gallons per minute over at least a four-hour period
Water Wells Minimum Property Requirements for Existing Construction
1 Existing wells must deliver water flow of three to five gallons per minute
2 No exposure to environmental contamination
3 Continuing supply of safe and potable water
4 Domestic hot water
5 Water quality must meet requirements of local jurisdiction or the EPA if no local standard

Shared WellsThe Mortgagee must confirm that a Shared Well:

  • serves existing Properties that cannot feasibly be connected to an acceptable public or Community Water supply System;
  • is capable of providing a continuous supply of water to involved Dwelling Units so that each existing Property simultaneously will be assured of at least three gallons per minute (five gallons per minute for Proposed Construction) over a continuous four-hour period. (The well itself may have a lesser yield if pressurized storage is provided in an amount that will make 720 gallons of water available to each connected existing dwelling during a continuous four-hour period or 1,200 gallons of water available to each proposed dwelling during a continuous four-hour period. The shared well system yield must be demonstrated by a certified pumping test or other means acceptable to all agreeing parties.);
  • provides safe and potable water. An inspection is required under the same circumstances as an individual well. This may be evidenced by a letter from the health authority having jurisdiction or, in the absence of local health department standards, by a certified water quality analysis demonstrating that the well water complies with the EPA’s National Interim Primary Drinking Water Regulations;
  • has a valve on each dwelling service line as it leaves the well so that water may be shut off to each served dwelling without interrupting service to the other Properties; and
  • serves no more than four living units or Properties.

For both proposed and existing Properties, the Mortgagee must ensure that the shared well agreement complies with the guidance provided in the following table.

Item Provisions that must be reflected in any acceptable shared well agreement include the following:
1 Require that the agreement is binding upon signatory parties and their successors in title, recorded in local deed records when executed and recorded, and reflects joiner by any Mortgagee holding a Mortgage on any Property connected to the Shared Well.
2 Permit well water sampling and testing by the local authority at the request of any party at any time.
3 Require that corrective measures be implemented if testing reveals a significant water quality deficiency, but only with the consent of a majority of all parties.
4 Ensure continuity of water service to “supplied” parties if the “supplying” party has no further need for the shared well system. (“Supplied” parties normally should assume all costs for their continuing water supply.)
5 Prohibit well water usage by any party for other than bona fide domestic purposes.
6 Prohibit connection of any additional living unit to the shared well system without:·        the consent of all parties;

·        the appropriate amendment of the agreement; and

·        compliance with item 3.
7 Prohibit any party from locating or relocating any element of an individual sewage disposal system within 75 feet (100 feet for Proposed Construction) of the Shared Well.
8 Establish Easements for all elements of the system, ensuring access and necessary working space for system operation, maintenance, improvement, inspection and testing.
9 Specify that no party may install landscaping or improvements that will impair use of the Easements.
10 Specify that any removal and replacement of preexisting site improvements, necessary for system operation, maintenance, replacement, improvement, inspection or testing, will be at the cost of their owner, except for costs to remove and replace common boundary fencing or walls, which must be shared equally between or among parties.
11 Establish the right of any party to act to correct an emergency in the absence of the other parties onsite. An emergency must be defined as failure of any shared portion of the system to deliver water upon demand.
12 Permit an agreement amendment to ensure equitable readjustment of shared costs when there may be significant changes in well pump energy rates or the occupancy or use of an involved Property.
13 Require the consent of a majority of all parties upon cost sharing, except in emergencies, before actions are taken for system maintenance, replacement or improvement.
14 Require that any necessary replacement or improvement of a system element(s) will at least restore original system performance.
15 Specify required cost sharing for:·        the energy supply for the well pump;

·        system maintenance, including repairs, testing, inspection and disinfection;

·        system component replacement due to wear, obsolescence, incrustation or corrosion; and

·        system improvement to increase the service life of a material or component to restore well yield or to provide necessary system protection.
16 Specify that no party is responsible for unilaterally incurred shared well debts of another party, except for correction of emergency situations. Emergency correction costs must be equally shared.
17 Require that each party be responsible for:·        prompt repair of any detected leak in this water service line or plumbing system;

·        repair costs to correct system damage caused by a resident or guest at their Property; and

·        necessary repair or replacement of the service line connecting the system to the dwelling.
18 Require equal sharing of repair costs for system damage caused by persons other than a resident or guest at a Property sharing the well.
19 Ensure equal sharing of costs for abandoning all or part of the shared system so that contamination of ground water or other hazards will be avoided.
20 Ensure prompt collection from all parties and prompt payment of system operation, maintenance, replacement or improvement costs.
21 Specify that the recorded agreement may not be amended during the term of a federally-insured or -guaranteed Mortgage on any Property served, except as provided in items 5 and 11 above.
22 Provide for binding arbitration of any dispute or impasse between parties with regard to the system or terms of agreement. Binding arbitration must be through the American Arbitration Association or a similar body and may be initiated at any time by any party to the agreement. Parties to the agreement must equally share arbitration costs.
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Joel Lobb
Mortgage Broker – FHA, VA, USDA, KHC, Fannie Mae
EVO Mortgage • Helping Kentucky Homebuyers Since 2001
📞 Call/Text: 502-905-3708
📧 Email: kentuckyloan@gmail.com
🌐 Website: www.mylouisvillekentuckymortgage.com
🏠 Address: 10602 Timberwood Cir, Ste 3, Louisville, KY 40223
NMLS #57916 | Company NMLS #1738461
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Joel Lobb Appraisals & Property Requirements

Kentucky FHA Condo Rules: Approved Projects and Single-Unit Approval

Updated November 4, 2026

You can use an FHA loan on a Kentucky condo in two ways: the whole project is FHA-approved, or your individual unit qualifies for Single-Unit Approval. A condo that isn’t on FHA’s list isn’t automatically ruled out.

Step 1: Check Whether the Project Is FHA-Approved

Search HUD’s FHA-approved condo list by location, name or status. If the project is approved and its approval is current, the project review is already done. Approvals can expire, so look at the status, not just the name. If the project isn’t approved, move on to Single-Unit Approval.

Step 2: See If the Unit Qualifies for Single-Unit Approval

Single-Unit Approval replaced the old “spot condo” approach. It lets one unit in a non-approved project qualify, as long as the project meets these standards:

RequirementFHA standard
Project approval statusNot on the FHA-approved list when the case number is assigned
Project sizeAt least 5 units
CompletionCertificate of occupancy issued at least 1 year ago, or the project has been occupied
Manufactured homesNot eligible
Owner occupancyAt least 50% of units
FHA loans in the project10+ units: FHA may stop new case numbers above 10% of units. Under 10 units: no more than 2 FHA loans
HOA reservesAt least 10% of monthly assessments, unless a reserve study supports less
Past-due duesNo more than 15% of units in arrears
One owner’s units20+ units: 10% or less. Under 20 units: one unit per owner
Commercial spaceNo more than 35% of total floor area
Loan approvalAutomated underwriting “Accept,” or a maximum 90% loan-to-value

That last line matters. If your file doesn’t get an automated Accept and has to be manually underwritten, you would need at least 10% down on a Single-Unit Approval rather than the usual 3.5%.

What Usually Stops a Kentucky Condo

  • Too many rentals. Condos near campuses and downtowns can fall under the 50% owner-occupancy line.
  • Underfunded reserves. The HOA budget needs to show the reserve contribution.
  • Delinquent dues. If more than 15% of units are behind, the project fails.
  • Too few units. A project with two to four condo units doesn’t meet the five-unit minimum.
  • An HOA that won’t respond. Your lender needs the HOA’s budget and project information to verify these items, so slow answers can hold up a closing.

What This Means for Your Offer

Have the condo checked before you get far into a contract. Ask the listing agent or HOA for the current budget, the number of units, how many are owner-occupied, and how many owners are behind on dues. Send that to me and we can usually tell quickly whether it looks workable.

The rest of the loan works like any other FHA purchase: the same credit, income and down payment rules and the same FHA mortgage insurance. Your monthly HOA dues count in your housing payment when your debt-to-income ratio is calculated, so a high fee can reduce how much you qualify for.

Frequently Asked Questions

Can I use an FHA loan on a condo that isn’t FHA-approved?

Often, yes. If the unit and project meet the Single-Unit Approval standards above, the project doesn’t need to be on FHA’s approved list.

What’s the down payment on a Kentucky FHA condo?

The minimum is 3.5% with a 580 or higher credit score, the same as a house. On a Single-Unit Approval without an automated Accept, the maximum is 90% loan-to-value.

Can I buy an FHA condo as a rental?

No. FHA loans are for a primary residence, and that applies to condos too.

Sources: HUD’s condominium mortgage insurance page and Handbook 4000.1, Single-Unit Approval section.

Found a Condo? Send It to Me Before You Offer

Call or text Joel Lobb at 502-905-3708, email kentuckyloan@gmail.com, or send me your question here.

Joel Lobb — Mortgage Loan Officer
NMLS #57916 | EVO Mortgage, Company NMLS #1738461

Equal Housing Lender. This information is for educational purposes only and is not a commitment to lend. All loans subject to credit approval, underwriting, property approval, and program guidelines, which can change without notice. Not affiliated with or endorsed by FHA, HUD, or any government agency.

Joel Lobb Appraisals & Property Requirements, Bankruptcy, Foreclosure & Short Sales, Credit Scores & Bad Credit, FHA Guidelines & Requirements, FHA Mortgage Insurance (MIP), FHA Refinance (Streamline & Cash-Out), HUD Homes & $100 Down, Income, Employment & DTI

2026 Kentucky FHA Loan Guide: Benefits & Updates

Kentucky FHA Loan Guide 2026: Limits, Gift Funds, KHC Down Payment Help, and Welcome Home Grant

Buying a home in Kentucky in 2026? This guide breaks down the FHA loan limit, gift fund rules, KHC down payment assistance, and the Welcome Home Grant in a clean, mobile-friendly format with no scripts.

2026 FHA limit: $541,287 3.5% down with 580+ KHC DAP up to $12,500 Welcome Home opens April 6, 2026

If you are a Kentucky first-time home buyer, or even a repeat buyer looking for a low down payment option, FHA financing remains one of the strongest mortgage programs available in 2026. FHA works well for many buyers because it allows a lower down payment, flexible credit guidelines, and in many cases the ability to combine with down payment assistance.

On top of that, Kentucky buyers may also be able to use Kentucky Housing Corporation down payment assistance or the Welcome Home Grant to reduce cash needed at closing. When the loan is structured correctly, that can make the difference between buying now and waiting another year.

2026 Kentucky FHA quick update The 2026 FHA one-unit loan limit in Kentucky is $541,287. KHC continues offering up to $12,500 in Regular DAP. The Welcome Home Program opens April 6, 2026 at 8:00 a.m. ET. Gift fund documentation is cleaner than it used to be, but large deposits still need to be documented properly.

2026 Kentucky FHA Loan Highlights

$541,287
2026 FHA loan limit
Standard one-unit Kentucky FHA limit
3.5%
Minimum FHA down payment
For borrowers with a 580 or higher credit score
580
Typical minimum score for 3.5% down FHA
Lower scores may require more money down
$12,500
KHC Regular DAP
Repayable over 15 years at 4.75%
$10,000–$20,000
Welcome Home assistance
Grant funds available through participating lenders while funds last

FHA Gift Funds and Large Deposits in 2026

One of the biggest advantages for FHA borrowers today is that gift fund documentation is cleaner than it used to be. That matters because many Kentucky buyers rely on family help for down payment or closing costs.

Even with that improvement, large deposits still matter. If a deposit is unusually large compared to your monthly qualifying income, underwriting will usually require an explanation and documentation showing where the money came from.

The bottom line is simple: gift funds can absolutely help, but the file still needs to be documented the right way from the start.

KHC Down Payment Assistance 2026

The Kentucky Housing Corporation loan program remains one of the best tools available for Kentucky buyers who need help with down payment and closing costs.

How KHC helps FHA buyers

KHC Regular DAP can be paired with an eligible KHC first mortgage. For borrowers who qualify, that can help cover some or all of the FHA down payment and part of the closing costs.

This is especially useful for buyers who have the income to qualify but do not have a large amount of liquid cash saved. That is a common issue, and KHC helps address it directly.

Regular DAP is offered up to $12,500 and is repaid over 15 years at 4.75 percent.

Basic KHC eligibility points

  • You must use an eligible KHC first mortgage program.
  • You must meet KHC credit score requirements.
  • You must stay within applicable income and purchase price limits.
  • The home must be a primary residence.
  • Program overlays and lender guidelines still apply.

Welcome Home Grant 2026

Separate from KHC

The Welcome Home Program is separate from KHC down payment assistance. A lot of buyers mix those up, but they are not the same program and they do not operate the same way.

The Welcome Home Program opens April 6, 2026 at 8:00 a.m. Eastern Time. Funds are first-come, first-served, so serious buyers need to be fully pre-approved and ready before the window opens.

  • Program opens April 6, 2026
  • Opening time is 8:00 a.m. ET
  • Potential grant range is generally $10,000 to $20,000
  • Available through participating lenders
  • Income, occupancy, and program rules apply
  • Funds can run out quickly

Official program information: FHLB Cincinnati Welcome Home Program

Internal Links to Related Kentucky Loan Programs

Official External Resources

How to Buy a House in Kentucky with an FHA Loan

1. Review your credit

Know where your mortgage scores stand before you start shopping.

2. Get pre-approved

Review your credit, income, assets, and employment up front so the right loan structure is clear from the beginning.

3. Review assistance options

Do not stop at FHA only. Check KHC and Welcome Home eligibility at the same time.

4. Gather documents early

Have pay stubs, W-2s, bank statements, ID, and documentation for any unusual deposits ready early.

5. Structure the offer correctly

Seller concessions, program fit, and property eligibility all matter before contract execution.

6. Move through underwriting and closing

Clean files close faster. Disorganized files do not.

Ready to Buy a Home in Kentucky?

Get a straight answer on your FHA, KHC, USDA, or VA options and find out which loan structure fits your situation best.

Apply Online Call or Text 502-905-3708

Frequently Asked Questions

What is the Kentucky FHA loan limit for 2026?

The standard one-unit FHA loan limit for Kentucky in 2026 is $541,287.

How much is KHC down payment assistance in 2026?

KHC Regular DAP is offered up to $12,500 and is repayable over 15 years at 4.75 percent for eligible borrowers.

When does the Welcome Home Program open in 2026?

The 2026 Welcome Home Program opens April 6, 2026 at 8:00 a.m. Eastern Time.

Can I use gift funds on an FHA loan?

Yes. FHA allows gift funds, but they still have to be documented properly for underwriting.

Which is better in Kentucky: FHA, USDA, VA, or KHC?

That depends on your credit, income, location, veteran status, and cash available. The right answer is the loan structure that gives you the best overall execution, not just the one with the most familiar name.

About Joel Lobb

Joel Lobb is a Kentucky mortgage professional helping home buyers with FHA, VA, USDA, KHC, and conventional financing across Kentucky.

NMLS #57916
Company NMLS #1738461
Phone: 502-905-3708
Email: kentuckyloan@gmail.com

Verify license at NMLS Consumer Access

Disclaimer: This information is for educational purposes only and is not a commitment to lend. All loans are subject to credit approval, income verification, asset review, and property approval. Program guidelines, rates, limits, and eligibility can change. Equal Housing Lender.