Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans Employment Gaps, Fannie Mae Homepath, FHA, FHA Approved Condo Kentucky, FHA Back to Work Program Ky, FHA Co-signors, FHA Guidelines, fha mortgage insurance premiums, FHA Refund Upfront MIP, FHA Streamline Refinance, fico score, fico score used for mortgages, fico scores FHA loan, first time buyer kentucky, First Time Home Buyer, Frequently Asked Questions, Kentucky FHA HUD Homes for $100 Down, Kentucky FHA Mortgage Forbearances Guidelines, Kentucky Housing, khc, khc down payment assistance, KY FHA LOANS

FHA vs Conventional Loans: A Guide for Kentucky Buyers

FHA vs. Conventional Loans: Which Is Better for Kentucky Homebuyers?

Compare FHA and conventional loans for Kentucky homebuyers. Learn credit requirements, down payments, mortgage insurance, and which loan fits your situation.

When comparing FHA loans vs conventional loans in Kentucky, the decision comes down to four core factors: credit score, down payment, debt-to-income ratio, and mortgage insurance. Both loan programs are widely used across Louisville, Lexington, Northern Kentucky, and rural areas, but they serve very different borrower profiles.

FHA Loans: Built for Flexibility

Kentucky FHA loans are designed for buyers who need more flexibility. FHA financing is often a strong option for borrowers with credit scores under 680, limited savings, or little to no cash reserves after closing. FHA also allows buyers to qualify sooner after major credit events, including foreclosures that are three to seven years old and short sales that occurred two to four years ago.

Another major advantage of FHA loans in Kentucky is gifting. The entire down payment and most closing costs can be covered with gift funds from approved sources. This makes FHA especially popular with first-time homebuyers and buyers using down payment assistance programs.

FHA Mortgage Insurance (MIP) Breakdown:

  • Upfront mortgage insurance premium: 1.75% of loan amount (rolled into the loan)
  • 30-year loans with less than 5% down: 0.85% annually
  • 30-year loans with 5%+ down: 0.80% annually
  • 15-year loans: 0.45% to 0.70% annually (depending on down payment)

Conventional Loans: For Stronger Credit

Kentucky conventional loans are best suited for borrowers with stronger credit and more money saved. Conventional financing generally favors buyers with credit scores above 680, at least five percent down, and reserves remaining after closing. Borrowers with foreclosures over seven years old or short sales that occurred five to seven years ago typically fit conventional guidelines more easily.

One of the biggest advantages of conventional loans is mortgage insurance flexibility. Unlike FHA, there is no upfront mortgage insurance premium. Monthly private mortgage insurance can be lower for borrowers with strong credit, and PMI automatically drops off once the loan reaches roughly 80 percent loan-to-value. FHA mortgage insurance, by contrast, usually lasts for the life of the loan when the down payment is less than ten percent.

Quick Comparison Table

Factor FHA Loans Conventional Loans
Credit Score Required 580+ 3.5% down payment (some lenders 500+ 10% down payment) 720+ typically
Down Payment 3.5% (with 580+ score) 3-5% minimum, typically 5%
Mortgage Insurance Required on all loans (lifetime with <10% down) Only if less than 20% down; drops at 80% LTV
Upfront Insurance Premium 1.75% None
Gift Funds 100% of down payment allowed Limited or restricted
Max Debt-to-Income Up to 56.99% (with compensating factors) Typically 45%
Property Types Owner-occupied only Owner-occupied and investment
Appraisal Standards Stricter More flexible

The Bottom Line

FHA loans are ideal for Kentucky buyers rebuilding credit, using gift funds, or purchasing with limited savings. Conventional loans reward borrowers with stronger credit, larger down payments, and long-term equity goals.

Most homeowners do not keep a mortgage for 30 years. Because many refinance or sell within five to seven years, FHA’s lifetime mortgage insurance is often less of a concern than it appears on paper. In many cases, the lower interest rate and easier approval standards outweigh the insurance cost.

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans $100 down FHA program, 580 credit score FHA

Understanding Key Mortgage Terms for Homebuyers

The mortgage process can often be a confusing one — whether you’ve bought a home before or not. There’s a lot of prep work and moving parts, and most of the terminology is unfamiliar to the average consumer.

Fortunately, that last part is an easy fix.

Are you getting ready to buy a home or refinance your current mortgage? Take a look at some of the lesser-known terms you might want to know.

  • Annual Percentage Rate (APR): This number reflects the total annual cost of taking out your mortgage loan. It’s different from your mortgage interest rate and includes some extra fees.
  • Underwriting: When a loan professional evaluates your application and verifies all your financial details, that’s underwriting. It’s important to ensure that you have the means to manage your new monthly payment.
  • Escrow: An escrow account is used to hold funds prior to closing, including your earnest money deposit. You might also pay into an escrow account to cover property taxes, homeowners insurance and private mortgage insurance (if you have it).
  • Closing Disclosure: This is a document that you’ll be given at least three days before your closing date. It should detail all the final costs of your loan, as well as what you’ll be expected to pay on closing day.
  • Mortgage Note: You’ll sign this document at closing.It outlines the terms of your home loan and includes how much you’re borrowing, whether it’s a fixed-rate or adjustable-rate mortgage and more.
  • Prepaid Costs: These also come up at closing and will go into your escrow account. They usually cover mortgage interest, property taxes and homeowners insurance expenses that occur between your closing date and the date your first mortgage payment is due.

If you need help understanding any part of the mortgage process, get in touch today.

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans 7500 down payment assistance KHC, Down payment assistance, down payment grant, first time buyer, first time buyer kentucky, First Time Home Buyer, Grants And Down payment Assistance, Homeownership Assistance Programs: Kentucky, Kentucky Housing, khc, khc down payment assistance

How to Access KHC’s $12,500 Down Payment Assistance

Kentucky Down Payment Assistance

This type of loan is administered by KHC in the state of Kentucky. They typically have $12,500  down payment assistance year around, that is in the form of a second mortgage that you pay back over 15 years at a interest rate of   4.75% depending on your income in the household.

Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA

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.”

When you’re ready to purchase a home in Joel’s area, contact him at:
Phone: 502-905-3708
Email: Kentuckyloan@gmail.com
Website: www.mylouisvillekentuckymortgage.com

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans $100 down FHA program, 500 credit score FHA loan, 580 credit score FHA, 620 credit score FHA loan, Appraisers FHA, back to work program FHA KY, bad credit fha loans Kentucky, bankruptcy fha, usda, va, conventional loan, bonus income fha loan, FHA Approved Condo Kentucky, FHA Back to Work Program Ky, FHA Guidelines, fha mortgage insurance premiums, job changes fha, job gaps FHA Kentucky Loan, job history FHA loan, KY FHA LOANS, manual underwriting guidelines FHA, mortgage charge-offs, overtime income fha loan, Overtime, Bonus, or Tip Income, Pre-Approval Mortgage Loan Kentucky

Kentucky FHA Manual Underwriting: A Complete Guide

 

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: A Complete Guide” →

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans $100 down FHA program, 90 day flip rule, appraisals, Appraisers FHA, FHA, FHA Guidelines, first time buyer kentucky, KY FHA LOANS

Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.

Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.
Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.

  • Ordered through a third party source. Interested/vested parties may not initiate the appraisal. I.E> buyers, sellers, realtors, loan officer, family members
  • Property must meet HUD’s minimum property standards. i.e.: permanent heat source, utilities must be on and in working order at time of inspection
  • Flips < 90 days – not allowed Per HUD -If current owner owned less than 90 days FHA will not insure. Sometimes a second appraisal will be required by FHA investor if sold within the last 6 months for a large profit. Receipts of work done may be needed to substantiate  increase in value of home in short-time period.
  • Transferred appraisal – ok
  • Appraisal valid 120 days – 30 day extension possible*
  • Property eligibility – No location restrictions.
  • New Construction Available

Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.
Kentucky FHA Appraisal Requirements For A Mortgage Loan Approval.

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

Applies to case numbers assigned on or after June 1, 2022

Updates the initial appraisal validity period from 120 days to 180 days from the effective date of the appraisal report;
Extends the appraisal update validity period from 240 days to one year from the effective date of the initial appraisal report;

Allows the appraisal update to be ordered AFTER an appraisal expires; and
Eliminates the optional 30-day extension.

✨This is big news for FHA ✨

The guideline change also puts FHA appraisal expirations on par with conventional loan expiration dates.

Kentucky FHA appraisals can take home buyers by surprise. That’s why we’ve put together some good-to-know info about the process. Feel free to use this to help educate your clients.

Joel Lobb
Senior  Loan Officer
(NMLS#57916)
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.






http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu

 
Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans $100 down FHA program, 500 credit score FHA loan, 580 credit score FHA, Appraisers FHA, back to work program FHA KY, Bankruptcy, cash deposits, Chapter 13 Bankruptcy Guidelines, Collections Accounts, credit scores FHA loan, debt to income ratios, Down payment assistance, employment, Employment Gaps, Fannie Mae Homepath, FHA, FHA Back to Work Program Ky, FHA Co-signors, FHA Guidelines, fha mortgage insurance premiums, FHA Streamline Refinance, fico scores FHA loan, first time buyer kentucky, foreclosure, Gift funds, Grants And Down payment Assistance, home inspections, Home Mortgage Rates Ky, HUD HOMES $100 Down, HUD REO PROPERTIES ELIGIBLE FOR THE $100 DOWN PAYMENT, job changes fha, job gaps FHA Kentucky Loan, job history FHA loan, job time, Kentucky FHA HUD Homes for $100 Down, Kentucky FHA Important Links, Kentucky FHA Loan Requirements for 2022, Kentucky FHA Mortgage Forbearances Guidelines, Kentucky Housing, Kentucky M, kentucky mortgage requirements, khc down payment assistance, KY FHA LOANS, Loan Limits for FHA, louisville ky fha seller contributions, Louisville Ky Home Loans, mi changes for FHA, Refinance Streamline, Self Employed, septic system fha loans, septic tank kentucky fha mortgages, short sales, student loan guidelines for FHA, work history requirements FHA

2026 FHA Loan Options for Kentucky Homebuyers

Kentucky FHA Loan Requirements – Updated for 2026

Kentucky FHA loan guidelines are established by the U.S. Department of Housing and Urban Development (HUD). FHA loans remain one of the most flexible mortgage options available to Kentucky homebuyers, particularly first-time buyers, borrowers rebuilding credit, and households using down payment assistance.

Employment and Income Requirements

Borrowers must demonstrate a stable employment history covering the most recent two years. This does not require the same employer, but the work history must show consistency in the same industry or line of work.

Recent college graduates may satisfy the two-year work history requirement by providing college transcripts, provided the current employment aligns logically with the education received.

Self-employed borrowers must document a minimum two-year history of self-employment and provide the most recent two years of federal tax returns filed with the IRS. FHA underwriting uses a two-year average of qualifying income, adjusted for business stability and trends.

All income must be verifiable through acceptable documentation such as pay stubs, W-2s, or tax returns. Cash income, undocumented deposits, or bank-statement-only income is not permitted for FHA qualifying purposes.

Down Payment Requirements

FHA loans require a minimum down payment of 3.5 percent for borrowers with credit scores of 580 or higher.

Borrowers with credit scores between 500 and 579 are limited to a maximum loan-to-value of 90 percent, requiring a minimum 10 percent down payment. In practice, most lenders apply overlays requiring higher credit scores, typically between 580 and 620, even though HUD technically allows lower scores.

Down payment funds must come from an approved source. Acceptable sources include personal savings, retirement account loans or withdrawals, and properly documented gift funds. Large or undocumented cash deposits are not allowed and remain one of the most common reasons for FHA loan delays or denials in underwriting.

Occupancy and Property Use

FHA loans are for primary residences only. The borrower must occupy the property as their primary home and move in within 60 days of closing. FHA financing may not be used for rental properties or investment homes.

Appraisal and Property Standards

The property must be appraised by a Kentucky-licensed, FHA-approved appraiser. The home must meet HUD’s minimum property standards, meaning it must be safe, sound, and secure.

Common appraisal concerns include peeling paint, exposed wiring, missing handrails, roof condition, and health or safety hazards. Most FHA appraisal issues are correctable prior to closing.

Debt-to-Income Ratio Guidelines

FHA evaluates two debt ratios:

The housing ratio (front-end), which includes principal, interest, property taxes, homeowners insurance, mortgage insurance, and HOA dues, is typically capped at 31 percent of gross monthly income.

The total debt ratio (back-end), which includes the housing payment plus all other monthly obligations reported on credit, is typically capped at 43 percent.

However, borrowers receiving an “Approve/Eligible” finding through FHA’s automated underwriting system may qualify with higher ratios, depending on credit scores, cash reserves, and other compensating factors.

Credit Score and Credit History Requirements

The minimum FHA credit score for maximum financing remains 580 in 2026. This does not guarantee approval, as lenders apply additional underwriting standards and overlays.

Borrowers must demonstrate acceptable recent payment history. FHA places significant weight on the most recent 12 months of credit performance.

Bankruptcy and Foreclosure Guidelines

Chapter 7 bankruptcy requires a minimum waiting period of two years from discharge, with re-established good credit and on-time payments afterward.

Chapter 13 bankruptcy may be eligible after at least 12 months of on-time plan payments, with trustee approval, and the borrower must qualify including the Chapter 13 payment.

Foreclosure generally requires a three-year waiting period from the date of foreclosure completion. Exceptions may be considered only for documented extenuating circumstances beyond the borrower’s control. Job relocation alone does not qualify as an extenuating circumstance.

Federal Debt and CAIVRS Requirements

Borrowers may not have delinquent federal debt, defaulted federal student loans, unpaid federal judgments, or unresolved FHA claims.

Lenders are required to check the CAIVRS (Credit Alert Interactive Voice Response System) database for all federally backed loans, including FHA, VA, USDA, and SBA loans. Title 31 of the U.S. Code prohibits delinquent federal debtors from receiving federal loan insurance or guarantees.

If a CAIVRS alert appears, the debt must be resolved or paid in full before closing.

FHA Gift Fund Rules for Down Payments

FHA permits gift funds for down payments and closing costs, provided there is no expectation of repayment.

Acceptable gift sources include relatives, employers, labor unions, close friends with a documented relationship, charitable organizations, and government or public entities.

Unacceptable gift sources include the seller, real estate agents, brokers, builders, or any party with a financial interest in the transaction.

A proper gift letter is required, stating that repayment is not expected. The donor must provide identifying information and documentation showing the transfer of funds from their account to the borrower.

Government and Employer Assistance Programs

Borrowers without access to family gift funds may qualify for state, local, or employer-assisted housing programs that provide down payment or closing cost assistance. In Kentucky, FHA loans can often be paired with Kentucky Housing Corporation (KHC) down payment assistance programs, subject to income limits and program availability.

How FHA Loans Are Used in Kentucky

FHA does not directly lend money. Instead, it insures loans made by FHA-approved lenders. These loans are designed for borrowers with limited down payment funds, past credit challenges, or non-traditional credit profiles.

Many Kentucky borrowers who do not qualify for conventional financing are still able to achieve homeownership through FHA-insured loans at competitive interest rates.

Pros and Cons of FHA Loans

Advantages include low down payment requirements, flexible credit standards, and the ability to combine FHA loans with down payment assistance programs.

Disadvantages include mandatory mortgage insurance. FHA charges an upfront mortgage insurance premium of 1.75 percent of the loan amount, which can be financed, and an annual mortgage insurance premium that ranges from approximately 0.45 percent to 1.05 percent depending on loan term, loan-to-value, and origination date. This annual premium is paid monthly and, in most cases, remains for the life of the loan unless refinanced.

Final Thoughts for Kentucky Homebuyers in 2026

FHA loans continue to be a practical, reliable option for Kentucky homebuyers who need flexibility without sacrificing long-term stability. While FHA guidelines are forgiving compared to conventional loans, preparation matters. Clean documentation, stable income, responsible credit behavior, and proper sourcing of funds are essential to a smooth approval.

Working with an experienced Kentucky FHA lender can help you navigate overlays, improve credit positioning, and pair FHA financing with available assistance programs.

Joel Lobb
NMLS #57916
Text or Call 502-905-3708
kentuckyloan@gmail.com
www.mylouisvillekentuckymortgage.com

Company NMLS #1738461
Equal Housing Lender

Information is provided for educational purposes only and does not guarantee loan approval. All loans are subject to underwriting guidelines, program availability, and lender approval.

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans Home Mortgage Rates Ky, Kentucky State Mortgage Rates, locking in rate, mortgage rates

Best mortgage rates today in Kentucky for FHA, VA, USDA and Conventional Home Loans

How to get the best mortgage rate in Kentucky

How to get the best mortgage rates today in Kentucky involves understanding the differences between Kentucky FHA, VA, USDA, and conventional home loans. Each loan type has its own criteria, benefits, and rate determinants. Here’s an overview of how to obtain the best rates for each:

1. Kentucky FHA Loans

Federal Housing Administration (FHA) loans are popular among Kentucky first-time homebuyers due to their flexible credit requirements and low down payments.

Best Practices to Secure the Best Rates:

  • Credit Score: Aim for a score of 720 or higher. While Kentucky FHA loans accept lower scores, higher scores typically secure better rates.
  • Down Payment: Putting down more than the minimum 3.5% can sometimes lower the interest rate. 500 is the minimum score with 10 % down and 580 and above score will you get you to a minimum down payment of 3.5%
  • Debt-to-Income Ratio (DTI): Maintain a DTI of 56.99% or lower to increase your chances of getting a favorable rate.
  • Shopping Around: Compare offers from different lenders in Kentucky for FHA lenders. Each lender may have different rates and terms for FHA loans.
  • Larger Loan amounts: will yield better rates. A lender will get you a better rate if the loan is larger due to they will make more money on the loan vs a small loan amount.

2. Kentucky VA Loans

Veterans Affairs (VA) loans are available to veterans, active-duty service members, and certain members of the National Guard and Reserves. These loans often offer lower rates and do not require a down payment or private mortgage insurance (PMI).

Best Practices to Secure the Best Kentucky VA loan Rates:

  • Credit Score: A score of 720 or higher is generally preferred, although some lenders might accept lower scores. No minimum score set by VA lenders in Kentucky
  • Service History: Ensure your service record meets the eligibility requirements. 2 year work history usually needed
  • Loan Comparison: Even within VA loans, rates can vary between lenders. Obtain multiple quotes to find the best rate.
  • Funding Fee: Understanding the VA funding fee and including it in your budget can help in comparing the true cost of loans.

3. Kentucky USDA Loans

United States Department of Agriculture (USDA) loans are designed for rural and suburban homebuyers who meet certain income requirements.

Best Practices to Secure the Best Kentucky USDA Loan Rates:

  • Credit Score: Aim for a score of 720 or higher to access better rates. No minimum score for USDA loans
  • Income Limits: Ensure your income falls within the USDA’s eligibility guidelines for your area.
  • Property Location: The home must be in an eligible rural or suburban area. Use the USDA’s property eligibility tool to confirm.
  • Guaranteed Loan Program: USDA offers both direct and guaranteed loan programs. The guaranteed loan program often has more favorable terms.

4. Kentucky Conventional Loans

Conventional loans are not insured or guaranteed by the government and typically require higher credit scores and down payments. They are much more sensitive to down payments, credit score, debt to income ratio when it comes to getting the best rate and getting loan approval. They will typically have a higher rate than government backed mortgage loans in Kentucky like FHA, VA, and USDA, but the mortgage insurance is cheaper and not for life of loan and require less red tape to close.

Best Practices to Secure the Best Conventional loan Rates:

  • Credit Score: A score of 780 or higher is ideal to secure the best rates. Minimum credit score for Conventional loans in Kentucky is 620
  • Down Payment: A larger down payment (40% or more) can significantly lower your interest rate and eliminate PMI.
  • DTI Ratio: A DTI ratio of 45% or lower is preferred.
  • Loan Term: Consider shorter loan terms (15 or 20 years) for lower rates, though monthly payments will be higher.
  • Large Loan Amounts: Larger Loan Amounts will yield better rates vs a small loan amount.

General Tips for All Loan Types to get the lowest Mortgage Rates in Kentucky

  • Credit Score, debt ratio, : Maintain a strong credit history, stable income, and low debt levels.
  • Rate Shopping: Use online comparison tools and consult multiple lenders. Rates can vary significantly with each lender.
  • Points: Consider paying points to lower your interest rate. This is an upfront fee that can reduce your monthly payments over the loan term.
  • Pre-approval: Get pre-approved for a mortgage to understand what rate you qualify for and to strengthen your offer when shopping for a home.
  • Locking Loan: Lock in for a shorter term. For example, lock in the rate for 30 days vs 60 days and you will get a better rate. Be aware if you go past the lock the date, you will be subject to worse case pricing.

By understanding the specific requirements and best practices for each loan type, you can position yourself to secure the most favorable mortgage rates in Kentucky.–


NMLS ID# 57916, (www.nmlsconsumeraccess.org).

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans 580 credit score FHA, 620 credit score FHA loan, bad credit fha loans Kentucky, bankruptcy fha, usda, va, conventional loan, credit scores, credit scores FHA loan, Credit Scores/Credit Reports, debt to income ratios, FHA Approved Condo Kentucky, FHA Back to Work Program Ky, FHA Co-signors, fico score, fico score mortgage loan, Frequently Asked Questions, job gaps FHA Kentucky Loan, job history FHA loan, job time, Kentucky FHA HUD Homes for $100 Down, Kentucky Mortgage Interest Rates, kentucky mortgage requirements, Kentucky Real Estate and Kentucky Appraisal Links

FHA, VA, USDA, and Kentucky Housing Corporation (KHC) down payment assistance programs with Joel Lobb’s expertise

How to get approved for a mortgage in Kentucky as a first-time homebuyer
Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans $100 down FHA program, 2025 include Conventional Loans, FHA, VA, USDA, and Kentucky Housing Corporation (KHC) Down Payment Assistance programs, 203k, 500 credit score FHA loan, 580 credit score FHA, 620 credit score FHA loan, 7500 down payment assistance KHC, 90 day flip rule, annual mortgage insurance premiums fha, appraisals, Appraisers FHA, assets, bad credit fha loans Kentucky, bank statements, bankruptcy fha, usda, va, conventional loan, Cashout Refinance, Chapter 13 Bankruptcy Guidelines, chapter 7 bankruptcy, Collections Accounts, conventional loans vs FHA loans, credit scores, credit scores FHA loan, Credit Scores/Credit Reports, debt to income ratios, employment, Employment Gaps, FHA Back to Work Program Ky, FHA Co-signors, FHA Guidelines, FHA LOAN FLOOD INSURANCE KENTUCKY, fha mortgage insurance premiums, FHA Refund Upfront MIP, FHA Streamline Refinance, fico score, fico score mortgage loan, fico score used for mortgages, fico scores FHA loan, first time buyer kentucky, First Time Home Buyer, Home Mortgage Rates Ky, Homeownership Assistance Programs: Kentucky, HUD Foreclosure, HUD HOMES $100 Down, HUD HOMES FOR SALE KENTUCKYK, HUD REO PROPERTIES ELIGIBLE FOR THE $100 DOWN PAYMENT, job changes fha, job gaps FHA Kentucky Loan, job history FHA loan, Kentucky FHA Loan Requirements for 2022, Kentucky FHA Mortgage Forbearances Guidelines, Kentucky Mortgage Interest Rates, kentucky mortgage requirements, Kentucky Real Estate and Kentucky Appraisal Links, khc down payment assistance, KY FHA LOANS, Loan Limits for FHA, louisville ky fha seller contributions, Louisville Ky Home Loans, manual underwriting guidelines FHA, mortgage charge-offs, mortgage fico score, Mortgage Guide for First-Time Home Buyers in Kentucky, Mortgage Insurance UFMIP, mortgage rates, Pre-Approval Mortgage Loan Kentucky, Refinance, Refinance Streamline, well water FHA mortgage, work history requirements FHA

Qualifying for an FHA Loan in Kentucky

FHA loans are a popular choice for many first-time homebuyers in Kentucky. This is due to their flexible qualifying criteria. If you’re considering an FHA loan in the Bluegrass State, understanding the key qualifying factors is crucial. Here’s a comprehensive guide to the criteria you need to know:

  1. Credit Score Requirements:
    • FHA loans are known for accommodating borrowers with lower credit scores. The minimum required credit score can vary. Typically, a credit score of 580 or higher is needed to qualify for the minimum down payment of 3.5%. Borrowers with credit scores between 500 and 579 might still qualify. They will need a higher down payment, usually around 10%.
  2. Down Payment:
    • The minimum down payment for an FHA loan in Kentucky is 3.5% of the home’s purchase price. This is advantageous for buyers who may not have substantial savings for a larger down payment, making homeownership more accessible.
  3. Work History:
    • Lenders typically look for a steady 2 year employment history when considering FHA loan applications. A consistent work history is beneficial. It is preferable to have worked with the same employer or within the same field. This helps demonstrate financial stability and the ability to repay the loan.
  4. Debt-to-Income Ratio (DTI):
    • The debt-to-income ratio is a crucial factor in mortgage approval. For FHA loans, the maximum allowable DTI ratio is typically around 40% to 45% of your gross monthly income. It can go higher up to 56% with good credit scores, a large down payment, or a shorter-term loan. Lenders may also consider higher ratios in certain cases if compensating factors are present.
  5. Bankruptcy and Foreclosure:
    • FHA loans have lenient guidelines regarding bankruptcy and foreclosure. Generally, borrowers with a past bankruptcy may qualify for an FHA loan after two years. This is possible if they have re-established good credit and demonstrated responsible financial behavior. For foreclosures, the waiting period is usually three years.
  6. Mortgage Term:
    • FHA loans offer various mortgage term options, including 15-year, 20 year, 25 year and 30-year fixed-rate loans. The choice of term depends on your financial goals and ability to manage monthly payments.
    • Occupancy: Primary residences with 1-4 units. Not for investment properties or second homes.
    • Mortgage Insurance on the loan for life of loan. Larger down payments and shorter terms will reduce the upfront mi and monthly mi premiums
    • can be used for refinances, not only for purchases.
    • Max FHA loan in Kentucky for 2025 is Kentucky FHA Loan Limits by County
      $524,225 1 unit
      $671,200 2 unit
      $811,275 3 unit
      $1,008,300 4 unit– This changes every year
    • No income limits nor property restrictions on where home is located
    • Can close within 30 days typically with good appraisal and title work

FHA Loan Requirements in Kentucky for Credit scores, Down payment, Debt Ratio and work history below

RequirementDetails
Credit Score– 580+: Eligible for a 3.5% down payment.
– 500-579: Requires a 10% down payment.
Down PaymentMinimum of 3.5% for qualified buyers; 10% for lower credit scores below 580 to 500 score range
Debt-to-Income Ratio (DTI)– Ideal: 45% or lower on front end ratio or housing ratio.
– Acceptable: Up to 57% with compensating factors. There are two ratios. Front end and back end with front end being maxed at 45% and the backed end ratio being 56.99% with an AUS approval. If manually underwritten, see guidelines here
Employment HistoryMust provide at least **2 years of consistent employment—College transcripts can supplement with a less than 2 year work history

Key Benefits of FHA Loans in Kentucky

  1. Low Credit Score Requirements
    • FHA loans accept borrowers with credit scores as low as 500. However, a score of 580+ qualifies you for the lowest down payment option.
  2. Low Down Payment Options
    • You can purchase a home with as little as 3.5% down if you meet credit requirements, making FHA loans more accessible than conventional loans.
  3. Competitive Interest Rates
    • FHA loans typically offer rates comparable to conventional mortgages. They may even offer lower rates. This could save you money over the life of the loan.
  4. Flexible Loan Uses
    • With an FHA 203(k) loan, you can bundle home purchase and renovation costs into a single mortgage.
  5. Assumable Loans
    • FHA loans can be transferred to a new buyer. This feature is especially valuable if you sell your home when interest rates are higher.

Understanding these qualifying criteria can help you navigate the FHA loan application process in Kentucky more effectively. Working with an experienced mortgage professional can provide valuable guidance. They offer assistance tailored to your specific financial situation and homeownership goals.

Joel Lobb  Mortgage Loan Officer

Any questions, please don’t hesitate to reach out via, text, email,  or call.  Advice is always free. 
 
One of Kentucky’s highest rated mortgage loan officers for FHA, VA, USDA, Kentucky Housing KHC and conventional mortgage loans.  
1 – 📅 Email – kentuckyloan@gmail.com 
2.  📞 Call/Text – 502-905-3708
 

Joel Lobb
Mortgage Loan Officer – Expert on Kentucky Mortgage Loans


🌐 Website: www.mylouisvillekentuckymortgage.com
🏢 Address: 911 Barret Ave., Louisville, KY 40204

Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

Kentucky Local Home Loan Lender Services

✅ First-Time Home Buyers Welcome
✅ FHA, Rural Housing (USDA), VA, and Kentucky Housing Corporation (KHC) Loans
✅ Conventional Loan Options Available
✅ Fast Local Decision-Making
✅ Experienced Guidance Through the Home Buying Process

 

NMLS 57916  | Company NMLS #173846
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.
(www.nmlsconsumeraccess.org).


Kentucky First Time Homebuyers FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans
 
Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans Cashout Refinance, FHA Refund Upfront MIP, FHA Streamline Refinance, KY FHA LOANS, Refinance, Refinance Streamline, Streamline

How to Get A Kentucky FHA Upfront Mortgage Insurance Premium (UFMIP) Refund

FHA Mortgage Insurance Premium (MIP) guidelines is correct. As of March 2025, FHA loans require an upfront MIP of 1.75% of the loan amount. The annual MIP rates and their duration are influenced by factors. These factors include the loan term, loan amount, and loan-to-value (LTV) ratio.​

Annual MIP Rates for FHA Loans with Terms Greater Than 15 Years:

  • Loan Amounts ≤ $726,200:
    • LTV ≤ 90%: Annual MIP of 0.50% for 11 years.​
    • LTV > 90% and ≤ 95%: Annual MIP of 0.50% for the life of the loan.​
    • LTV > 95%: Annual MIP of 0.55% for the life of the loan.​
  • Loan Amounts > $726,200:
    • LTV ≤ 90%: Annual MIP of 0.70% for 11 years.​
    • LTV > 90% and ≤ 95%: Annual MIP of 0.70% for the life of the loan.​
    • LTV > 95%: Annual MIP of 0.75% for the life of the loan.​

Annual MIP Rates for FHA Loans with Terms 15 Years or Less:

  • Loan Amounts ≤ $726,200:
    • LTV ≤ 90%: Annual MIP of 0.15% for 11 years.​
    • LTV > 90%: Annual MIP of 0.40% for the life of the loan.
  • Loan Amounts > $726,200:
    • LTV ≤ 78%: Annual MIP of 0.15% for 11 years.​
    • LTV > 78% and ≤ 90%: Annual MIP of 0.40% for 11 years.​
    • LTV > 90%: Annual MIP of 0.65% for the life of the loan.
How to Get A Kentucky FHA Upfront Mortgage Insurance Premium (UFMIP) Refund

1 –  Email – kentuckyloan@gmail.com 

2.   Call/Text – 502-905-3708

Joel Lobb
Mortgage Loan Officer – Expert on Kentucky Mortgage Loans


🌐 Website: www.mylouisvillekentuckymortgage.com
🏢 Address: 911 Barret Ave., Louisville, KY 40204

Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

Kentucky Local Home Loan Lender Services

✅ First-Time Home Buyers Welcome
✅ FHA, Rural Housing (USDA), VA, and Kentucky Housing Corporation (KHC) Loans
✅ Conventional Loan Options Available
✅ Fast Local Decision-Making
✅ Experienced Guidance Through the Home Buying Process

If you are an individual with disabilities who needs accommodation, please contact us at 502-905-3708. If 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. These include income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals depend on underwriting guidelines, interest rates, and program guidelines. These can change without notice based on the 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/

Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans Down payment assistance, down payment grant, FHA, FHA Guidelines, Identity of Interest Transactions, KY FHA LOANS

What does Identity Of Interest mean for FHA Loans?

Does FHA Restrict down payment requirements on Identity of Interest Transactions?

The 85 percent maximum LTV restriction does not apply for Kentucky FHA Loans in regards to FHA Identity-of-Interest transactions under the following circumstances:

👇👇👇

FAMILY MEMBER TRANSACTIONS•  the principal residence of another family member; or  a property owned by another family member in which the borrower has been a tenant for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.

BUILDER’S EMPLOYEE PURCHASE• An employee of a builder, who is not a family member, purchases one of the builder’s new houses or models as a principal residence.

CORPORATE TRANSFER • A corporation transfers an employee to another location, purchases the employee’s house, and sells the house to another employee.

TENANT PURCHASE• the current tenant purchases the property where the tenant has rented the property for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.

Source: FHA Handbook 4000.1

What You Need To Know About Identity Of Interest Transactions
What You Need To Know About Identity Of Interest Transactions

 
10602 Timberwood Circle Suite 3
Louisville, KY 40223
 


Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
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