Kentucky Housing Corporation (KHC)


Kentucky First-Time Home Buyer Programs 



There are basically 4 mortgage programs for first time home buyers in Kentucky to consider:
Kentucky First-Time Home Buyer Programs 

Rest assured, most Kentucky first-time homebuyers are confused and lack confidence when it comes to buying their first home in Kentucky.

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


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


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


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


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


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

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



2. VA:

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


The current credit score that most Kentucky VA lenders want is 620. There can be no bankruptcies or foreclosures in the last two years with good re-established credit.


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



3. USDA/Rural Housing:

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

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

Check Kentucky USDA Income Limits Here”—–>>>>


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


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

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

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

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

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



4. Kentucky Housing Corp or KHC
KHC is used for mostly applicants in urban areas of Kentucky that don’t have access to USDA or other government agencies to buy a home with no down payment.


Down Payment Assistance for Ky First Time Home Buyer, 100% Financing


Down Payment: There are still housing programs that exist for Kentucky home buyers whereas you can purchase a home with no down payment. You will need a 620 mid credit score to purchase a home using the KHC loan programs for their no down payment credit requirements.

How the Down Payment Assistance Program (DAP) Works

A minimum of 3.5% down payment is required with this loan. Down payment assistance loans are available from $4500-$6,000, and are paid back over a period of ten years. They are typically offered to buyers with limited cash reserves and carry an interest rate of 1 to 5.5%. 


These loans can make a critical difference to buyers for whom the down payment is an obstacle. Buyers whose 3.5% down payment is less than the $6000 limit may choose to use the remainder of a down payment loan to pay closing costs, further reducing the amount needed to bring to closing.







Home Buyer Eligibility
•  KHC can help both first time and repeat home buyers statewide.
•  Must be a U.S. citizen or legal status to be in U.S.
•  Applicant’s income ONLY through Secondary Market.
•  Property must be the borrower’s principal residence.
•  Any Borrower that meets both the income and purchase price limit can have access to 
Down Payment Assistance.






Kentucky Housing Credit Standards
•   620 minimum credit score required for FHA, VA, & RHS.
•   660 minimum credit score required for Conventional.
•   Debt ratios: 40/50%
•   Collections in most cases do not need to be paid-off in full.
•   Bankruptcies and foreclosures must be discharged two to seven years.
•   Non-taxable income can be grossed-up.






Property Eligibility
•  Both new and existing property.
•  Both new & existing Manufactured Housing.
•  With RHS only new construction Manufactured housing is allowed.
•  Purchase price limit of $346,644 for Secondary Market or $311,997 for Tax Credit.
•  Full appraisal required on all KHC loans.
•  With Existing Property, VA is the only loan product that requires a termite inspection.
•  A termite soil treatment certificate is required on ALL new construction properties 
except on conventional loans.
















Joel Lobb (NMLS#57916)
Senior Loan Officer

text or call 502-905-3708 cell

kentuckyloan@gmail.com


This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.


All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines


Remember, we are even available this weekend for pre-qualifications or questions. Call our cell phone or email us. If you miss us, leave a message and we WILL call you back

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

First Time Home Buyer Louisville Kentucky Mortgage Programs


Regular DAP

  • Purchase price up to $346,644 with Secondary Market.
  • Assistance in the form of a loan up to $6,000 in $100 increments.
  • Repayable over a ten-year term at 5.50 percent.
  • Available to all KHC first-mortgage loan recipients.

Affordable DAP

  • Purchase price up to $346,644​ with Secondary Market.
  • Assistance up to $6,000.
  • Repayable over a ten-year term at 1.00 percent.
  • Borrowers must meet Affordable D​AP income limits.

​MORE ABOUT DOWN PAYMENT AND CLOSING COSTS

  • No liquid asset review and no limit on borrower reserves.
  • Specific credit underwriting standards may apply to down payment programs
  •  
  •  
  • .​

SECONDARY MARKET FUNDING SOURCE

  • First-time and repeat homebuyers statewide
  • 30-year fixed interest rate
  • Principal residence ONLY
  • Purchase Price Limit:  $346,644
  • Borrower must meet KHC’s Secondary Market Income Limits

KENTUCKY HOUSING CORPORATION
2021 SECONDARY MARKET
GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS
Effective May 1, 2021

Secondary Market Purchase Price Limit — $346,644

I can answer your questions and usually get you pre-approved the same day.

Call or Text me at 502-905-3708 with your mortgage questions.
Email Kentuckyloan@gmail.com

Joel Lobb (NMLS#57916)
Senior  Loan OfficerAmerican Mortgage Solutions, Inc.10602 Timberwood Circle Suite 3Louisville, KY 40223Company ID #1364 | MB73346

Text/call 502-905-3708
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). I lend in the following states: Kentucky 

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