Mortgage Lending Requirements for FHA, VA, and Conventional Mortgage Loans.


FHA:

FHA home loans are mortgages insured by the federal government through the Federal Housing Administration (FHA), a branch of the Department of Housing and Urban Development. FHA home loans reduce the barrier to entry for homebuyers and refinancers by featuring low down payments, flexible credit requirements, and more purchase power. If funds are limited, an FHA home loan can help you finance more than 80% of your home value.

What are FHA loan requirements?

In order to ensure that you meet the minimum FHA loan requirements, you need to consider the following factors:

  • Are you over the age of 18?
  • Do you have a valid Social Security number and lawful residency in the United States?
  • Do you have a steady employment history? If not, have you at least worked for the past two years?
  • Can you afford the minimum down payment of 3.5% 580  or 10% 500 (depending on credit score)?
  • Do you have a credit score above 500 to 580?
  • Have you been out of bankruptcy for at least the past two years? (If the answer is no, there may still be exceptions that can be made on a case-by-case basis.).
  • Will this home be your primary residence?

You’ll likely need to be able to answer all of these questions with a hearty ‘YES’ in order to meet FHA home loan requirements.

VA:

The US Government’s VA loans program helps veterans, active-duty service members, and their families qualify for a home loan. Though they are issued by private lenders like MLB Residential Lending, VA home loans are backed by the US Department of Veterans Affairs.

VA home loans feature no down payment or private mortgage insurance (PMI) requirements, making them a great choice for any veteran or active service member looking to purchase a home. For this reason, a guaranteed VA loan is often the best and easiest way for veterans to purchase a home of their own.

A VA loan is a no-brainer for qualified homebuyers and refinancers. The intended candidate is a service member or surviving spouse with a clean financial record.

Ask yourself these four questions to determine if you meet the minimum VA home loan requirements:

  • Are you a current or ex-military personnel?
  • Are you the surviving spouse of current or ex-military personnel?
  • Have you defaulted on a home loan within the last 12 months?
  • Have you declared bankruptcy within the last two years?

If you answered “YES” to either of the first two questions and a resounding “NO” to questions three and four, you most likely meet the basic VA home loan requirements.

Conventional Loans

A conventional loan is a mortgage not insured or guaranteed by a government agency such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). As compared to FHA loans, a conventional mortgage typically requires a higher credit score. These loans will also require Private Mortgage Insurance (PMI) for loans with less than a 20% down payment. These loans are subject to maximum loan limits. Loans that exceed the maximum limit are known as Jumbo loans.

Here are some of the benefits of a conventional loan, refinance or cash-out refinance:

  • Conventional loans may be used to purchase investment properties or a second home
  • No private mortgage insurance is required if you put 20% down
  • A variety of flexible loan term options to fit your needs whether it’s a 15-year or a 30-year
  • No upfront mortgage insurance premium
  • The ability to refinance into a conventional loan from any other loan type may allow you to take advantage of lower interest rates
  • To be eligible for a conventional purchase, refinance or cash out a loan you should have:
  • Good credit, typically 620 or greater FICO.
  • Provide a down payment, ideally 20% to avoid Private Mortgage Insurance (PMI).
  • Show proof of income and two years of tax returns.
  • Cash reserves on hand to cover closing and additional costs.
  • Ensure total debt does not exceed 45% of your income.

Down payment Assistance for Kentucky First Time Home buyers 2022


This type of loan is administered  by KHC in the state of Kentucky. They typically have $6000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years.
Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.
KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs. The conventional loan requirements at 660

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.

A minimum of 3.5% down payment is required with this loan. Down payment assistance loans are available from $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.

KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your need.

  • Kentucky First-time home buyer qualifications

     KHC’s assistance programs.

    To qualify for the agency’s loans, you must:

    • Fall within your county’s “secondary market” income limit for qualifying for a reduced-interest loan with fewer overall requirements.
    • Be a U.S. citizen or qualified noncitizen.
    • Have a credit score of at least 620 (though some programs will require a higher score).

    Conventional Preferred Program

    The Kentucky Housing Corporation offers a few different loan programs, including the Conventional Preferred program. These home loans have 30-year fixed interest rates, so your rate won’t change over the life of the loan. The mortgages are serviced by the KHC and maintained in Kentucky, not sold off the way other mortgages are.

    To qualify for this program, you’ll need:

    • A minimum credit score of 660.
    • A down payment of 3% of your purchase price.
    • To pay monthly mortgage insurance.
    • An income that doesn’t exceed 80% of the local median income.

    With the Conventional Preferred Program, you also can make use of any of the state’s down payment assistance programs for help with your closing costs.

    Conventional Preferred Plus 80 Program

    Many of the requirements for the Preferred Plus 80 program are similar to those for the Conventional Preferred Program loans. You’ll need:

    • A minimum credit score of 660.
    • A down payment of 3% of your purchase price.
    • Monthly mortgage insurance.
    • An income that doesn’t exceed your county’s “secondary market” limit.

    And, the KHC’s down payment assistance programs can be used in conjunction with the Conventional Preferred Plus 80 program.

    KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your need.

    KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your need.

    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
    ECONDARY MARKET
    GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS
    Secondary Market Purchase Price Limit — $346,644

    KENTUCKY HOUSING CORPORATION 2021 SECONDARY MARKET GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS

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.”

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.”


Joel Lobb

Joel Lobb, American Mortgage Solutions (Statewide)

Joel has worked with KHC for 12 of his 20 years in the mortgage lending business. Joel said, “A lot of my clients would not have been able to purchase a home of their own or possibly delayed their purchase due to lack of down payment but with the $6,000 DAP loan program, this gets them into a house sooner and starts their path to homeownership while building equity instead of throwing their money away.”

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


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

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346


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

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