Tag: va loan kentucky

Get Yourself Pre-approved for a Mortgage in Kentucky

via How to Buy a Home in Kentucky

Get Yourself Pre-approved for a Mortgage in Kentucky

Which home loan is used to buy a home in Kentucky

Buying a home can be a nerve-wracking experience, especially if it’s your first time. It may feel even more so if you’re still saddled with student loan debts.

Does your income-driven repayment plan has Do you have Federal student loans in it? Do you know how your lender will handle your debt to income ratio?

These are just some of the factors that you need to put into consideration when planning to buy a house. It might just be not that easy since you also have to factor in your student loan debts.

To make the process less intimidating for you, here are the things you need to do.

Pay Attention to Your Credit Score

FICO credit scores are among one of the most commonly used scoring systems by lenders and creditors whose range plays in between 350 to 800. A consumer with a credit score below 620 is considered to have poor credit, while those with credit scores of 750 or higher is considered to have excellent credit.

Now, if you want to qualify for a home improvement financing or a mortgage and nail a low mortgage rate, make sure your credit score is in good shape. Whenever you apply for a mortgage, every credit bureau gathers information about your credit history and calculate your credit score that lenders will use to gauge your risk factor.

If you find an error or any inconsistencies in your credit report, report it immediately to the credit bureau and have it fixed.



Your DTI (debt-to-income ratio) is one of the major factors that lenders consider when you apply for a mortgage loan. It’s the ratio of the total amount of your recurring debt every month with your monthly gross income.

To calculate your DTI, add up all of your recurring monthly debt such as student loan payments, minimum credit card payments, or car loan payments, then divide it by your pre-tax (the amount you earn before taxes and other withholdings) income every month.

Since your debt-to-income contains two main components: debt and income, the efficient way to reduce it is to:

earn more income

repay existing debt

do both

How does your debt to income ratio play into a Kentucky Mortgage Loan Approval for FHA, VA, USDA and Fannie Mae Mortgage Loans

Pay Attention to Your Payments

Case in point: Lenders will approve the application of those who are financially responsible.

Know it that your payment history takes up one of the biggest portions of your credit score. Thus, to make sure that you pay on time, set up an autopay system for all your accounts so that funds are automatically debited every month.

Moreover, your FICO is being weighed heavily by current payments, which means your future will matter more than your past. Make sure also to do the following:

Pay off the balance if you have a delinquent payment.

Do not skip payments.

Pay on time.

Get Yourself Pre-approved for a Mortgage


The common cycle for home buyers is to look for a property, then get a mortgage. You have to switch it.

It’s better if you get yourself pre-approved with a lender, so you will know how much you can afford for a home. To get pre-approved, lenders will look at your income, credit profile, employment, assets, to name a few.



Besides your credit score and DTI, your lenders also assess your credit card utilization score, or your credit card expenses as a percentage of your credit limit every month. The ideal credit utilization must be 30% or less. Even better, keep it less than 10% if possible.

For instance, if you have a $20,000 credit card limit and spent $6,000, your credit utilization is equivalent to 30%.

If you want to regulate your credit card utilization better, here are the things you can do:

Talk with your lender about increasing your credit limit. It may require a hard credit pull so better consult your lender first.

Pay off your balance at least twice a month to lessen your credit utilization.

To track credit utilization, set up alerts for automatic balance.


Credit Score Requirements for a Conventional loan, USDA Loan, FHA Loan, VA loan in Kentucky




Even if you have outstanding student loan debts, you can still seek for different down payment assistance. You can start with the following:



USDA loans. These loans have zero-down mortgages for suburban and rural homeowners.

FHA loans. Acquire federal loan through the Federal Housing Authority.

VA loans. You can avail these loans if you’ve served in the military service.

There are local, state, and federal assistance programs as well that you can resort to.

If paying off your credit card balance is impossible before getting a mortgage, you can consolidate your credit card debt into one personal loan for a lower interest rate.

Taking a personal loan can help you save big on you on interest expenses over the repayment term, which usually lasts for three up to7 years, depending on the lender. It can also enhance your credit score since it’s an installment loan with a fixed repayment term.

On the flip side, credit cards have no fixed repayment terms because they are revolving loans. When such is the case, you can minimize your credit utilization and diversify your debt types whenever you trade your credit card debt for a personal loan.

Buying a home while grappling with student loan debts can be taxing. Your likelihood to get a mortgage for a property will depend on your loans. It can result in disappointment if your loans are in bad shape.

Now, if you don’t evaluate your student loan picture and ensure that you’re taking all the necessary steps to be successful, getting that mortgage will be impossible. It might not work all the time, but arming yourself with the right knowledge to get there is the beginning of your homeownership journey.

Author’s Biohttps://www.universityherald.com/articles/76437/20190826/how-to-buy-a-home-with-a-student-loan-debt.htm

© 2017 University Herald, All rights reserved. Do not reproduce without permission.


The lenders I currently deal with have the following fico cutoffs for credit scores:
As you can see, different government-backed loan programs have different minimum score requirements with most lenders for a FHA, VA, or Fannie Mae loan, and 620  is required for the no down payment programs offered by USDA and KHC in Kentucky for First Time Home Buyers wanting to go no money down.

A Complete Guide to Closing Costs

Joel Lobb
Senior  Loan Officer
 Company ID #1364 | MB73346

 unnamed (2) (1)

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). USDA Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation


Kentucky VA Mortgage Lender Guidelines for 2019

Kentucky VA Mortgage Lender Guidelines for 2019via Kentucky VA Mortgage Lender Guidelines for 2019

Kentucky VA Mortgage Guidelines for 2019

via Kentucky VA Mortgage Guidelines for 2019How can I get a VA Mortgage loan in Kentucky in 2019?

Kentucky VA Mortgage Loan Guide for Foreclosures, Bankruptcy, and short sales or deed in lieu.


Kentucky VA Mortgage Loan Guide for Foreclosures, Bankruptcy, and short sales or deed in lieu.
Kentucky VA Mortgage Loan Guide for Foreclosures, Bankruptcy, and short sales or deed in lieu.



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

Text/call 502-905-3708

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. Rates are subject to change and are subject to borrower(s) qualification.

Kentucky VA loans skyrocket in popularity for first-time home buyers

via Kentucky VA loans skyrocket in popularity for first-time home buyers

VA Underwriting Changes


VA has just revised Chapter 4 – Credit Underwriting and Chapter 11 – Appraisal Requirements (now named Appraisal Reports) of their underwriting guidelines. These changes will take effect for all VA loans beginning May 23rd, 2019. Major changes are as follows, but the documents have been revised throughout so it is recommended that everyone review them HERE.
  • Borrowers using rental income from a non-subject property to qualify need to document a minimum 2 year rental history and 3 months reserves PITI for each rental property (excluding property being vacated and turned into a rental). When no mortgage exists on a rental property, 3 months reserves must still be provided that cover taxes, insurance, HOA dues, and any other fees documented for the property. These reserves cannot come from equity, gift funds, or any loan proceeds.
  • Rental income from boarders can now be used as qualifying income provided
    • A 2 year history of tax returns can be provided showing boarder income generated by the property; AND
    • The use of the property for boarder rental cannot impair the residential nature of the property and cannot exceed 25% of the property’s total floor area
  • Alimony, child support, and maintenance require at least 3 years continuance to be considered effective income.
  • For payment plans after a judgment, VA will generally require 12 months of timely payments before credit is considered reestablished. A shorter repayment history may be considered if it can be determined that the borrower addressed the judgment responsibly and began a repayment plan immediately after it was filed. If borrower has missed payments within the last 12 months, they will be ineligible for financing even if the debt is paid in full.
  • For voluntary short sales or deeds-in-lieu where the borrower was current on their payments at the time the property was surrendered, no minimum derogatory credit waiting period will be required.
  • VA’s list of required Appraisal Report Contents has been updated and now includes specific photographs required on the appraisal (refer to VA Chapter 11: Topic 3: Appraisal Report Contents for full list).
  • VA Chapter 11: Topic 4: Gross Living Area has been added to provide direction in determining the Gross Living Area of the property.
  • Other sections have been updated to include guideline changes from previous VA Circulars.

Your Complete Guide to the Kentucky VA Loan for 2019

via Your Complete Guide to the Kentucky VA Loan for 2019

Kentucky Homebuyer Loan Options for 2019.

via Kentucky Homebuyer Loan Options for 2019.





Kentucky VA Loan Guidelines

via Kentucky VA Loan Guidelines

Kentucky VA Loan Guidelines

Exception Maximum Loan


  • Existing VA loan balance, plus
  • The cost of any energy efficiency improvements up to $6,000, plus
  • Allowable fees and charges, plus
  • Up to two discount points, plus
  • VA funding fee.

(Lenders must use VA Form 268923, IRRRL Worksheet, for the actual calculation.)

a. Does VA have Maximum Loan Amounts?
Unlike other home loanprograms, there are no maximum dollar amounts prescribed for VA-guaranteed loans. Limitations on VA loansize are primarily attributable to two factors:1.   Lenders who sell their VA loans in the secondary market must limit the size of those loans to the maximums prescribed by Government National Mortgage Association (GNMA) or whatever conduit they use to sell the loans.2.   VA limits the amount of the loan to the reasonable value of the property shown on the NOV plus the cost of energy efficiency improvements up to $6,000 plus the VA funding fee, with the following exceptions.

Continued on next page

3.  Maximum Loan, Continued

a. Does VA have Maximum Loan Amounts? (continued)
Exception Maximum Loan
Regular refinancing loan (cash-out)
  • 100 percent of the VA reasonable value, plus
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.
Loans to refinance are:

the veteran at an

interest rate higher

than that for the

proposed refinancing


The lesser of:

  • the VA reasonable value, or
  • the sum of the outstanding balance of the loan plus allowable closing costs and discounts, plus
  • (For construction loans, “balance of the loan” includes the balances of construction financing and lot liens, if any.)
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.
Graduated Payment Mortgage (GPM) loan on existing property
  • The VA reasonable value, minus
  • the highest amount of negative amortization, plus
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.

Reference:  See section 7 of chapter 7.

GPM loan on new home 97.5 percent lesser of:

  • the VA reasonable value or
  • the purchase price, plus
  • the cost of any energy efficiency improvements up to $6,000, plus
  • VA funding fee.

Reference:  See section 7 of chapter 7.

Continued on next page

3.  Maximum Loan, Continued

b. Downpayment
Because VA loans can be for the full reasonable value of the property, no downpayment is required by VA except in the following circumstances:

  • If the purchase price exceeds the reasonable value of the property, a downpayment in the amount of the difference must be made in cash from the borrower’s own resources, and
  • VA requires a downpayment on all GPMs.

If a veteran has less than full entitlement available, a lender may require a downpayment in order to make the veteran a loan that meets GNMA or other secondary market requirements.  The “rule of thumb” for GNMA is that the VA guaranty, or a combination of VA guaranty plus downpayment and/or equity, must cover at least 25 percent of the loan.

4.  Maximum Guaranty on VA Loans

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
  • Subsection a has been updated to reflect the temporary increase in maximum potential guaranty for loans closed January 1, 2009, through December 31, 2011.
a. Maximum Guaranty Table
Public Law 110-389, the Veterans’ Benefits Improvement Act of 2008, signed October 10, 2008, provided a temporary increase in the maximum guaranty for loans closed January 1, 2009 through December 31, 2011.  The maximum guaranty now varies depending on the location of the property.  While VA does not have a maximum loan amount, there are effective “loan limits” for high-cost counties.  The limits are derived by considering both the median home price for a county and the Freddie Mac conforming loan limit.  To aid lenders in determining the maximum guaranty in high-cost counties, VA has created a Loan Limitchart, with instructions.  This will be updated yearly.

  • In general, maximum guaranty, assuming the veteran has full entitlement, is as shown in the table below.
Loan Amount Maximum Potential Guaranty Special Provisions
Up to $45,000 50 percent of the loan amount. Minimum guaranty of 25 percent on IRRRLs.
$45,001 to $56,250 $22,500 Minimum guaranty of 25 percent on IRRRLs.
$56,251 to $144,000 40 percent of the loan amount, with a maximum of $36,000. Minimum guaranty of 25 percent on IRRRLs.
$144,001 to $417,000 25 percent of the loan amount Minimum guaranty of 25 percent on IRRRLs.
Greater than $417,000 The lesser of:

  • 25 percent of the VA county loan limit, or
  • 25 percent of the loan amount


Minimum guaranty of 25 percent on IRRRLs

4.  Maximum Guaranty on VA Loans, Continued

a. Maximum Guaranty Table (continued) Note:  The percentage and amount of guaranty is based on the loan amount including the funding fee portion when the fee is paid from loan proceeds.For the maximum guaranty on loans for manufactured homes that are not permanently affixed (i.e., not considered real estate) see 38 U.S.C. 3712 and/or contact VA.

5.  Occupancy

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. The Law on Occupancy
The law requires a veteran obtaining a VA-guaranteed loan to certify that he or she intends to personally occupy the property as his or her home.  As of the date of certification, the veteran must either

  • personally live in the property as his or her home, or
  • intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time.

The above requirement applies to all types of VA-guaranteed loans except IRRRLs.  For IRRRLs, the veteran need only certify that he or she previously occupied the property as his or her home.


Example:  A veteran living in a home purchased with a VA loan is transferred to a duty station overseas.  The veteran rents out the home.  He/she may refinance the VA loan with an IRRRL based on previous occupancy of the home.

b. What is a “Reasonable Time?”
Occupancy within a “reasonable time” means within 60 days after the loan closing.  More than 60 days may be considered reasonable if both of the following conditions are met:

  • the veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and
  • there is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on a specific future date.

Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA.

Continued on next page

5.  Occupancy, Continued

c. When Can a Spouse Satisfy the Occupancy Requirement?
Occupancy (or intention to occupy) by the spouse satisfies the occupancy requirement for a veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time.Occupancy by the spouse may satisfy the requirement if the veteran cannot personally occupy the dwelling within a reasonable time due to distant employment other than military service. In these specific cases, consult your Regional Loan Center (RLC) to determine if this type of occupancy meets VA requirements.Note:  The cost of maintaining separate living arrangements should be considered in underwriting the loan.For an IRRRL, a certification that the spouse previously occupied the dwelling as a home will satisfy the requirement.

No family member or person other than the veteran’s spouse can satisfy the occupancy requirement for the veteran.

d. Occupancy Requirements
for Deployed
Active Duty Servicemembers
Single or married servicemembers, while deployed from their permanent duty station, are considered to be in a temporary duty status and able to meet the occupancy requirement.  This is true without regard to whether or not a spouse will be available to occupy the property prior to the veteran’s return from deployment.
e. Occupancy After Retirement
If the veteran states that he or she will retire within 12 months and wants a loan to purchase a home in the retirement location

  • verify the veteran’s eligibility for retirement on the specified date, and

– Include a copy of the veteran’s application for retirement submitted to his or her employer.

  • carefully consider the applicant’s income after retirement.

– If retirement income alone is insufficient, obtain firm commitments from an employer that meet the usual stability of income requirements.

Note:  Only retirement on a specific date within 12 months qualifies.  Retirement “within the next few years” or “in the near future” is not sufficient.

Continued on next page

5.  Occupancy, Continued

f. Delayed Occupancy Due to Property Repairs or Improvements
Home improvements or refinancing loans for extensive changes to the property which will prevent the veteran from occupying the property while the work is being completed, constitute exceptions to the “reasonable time” requirement. The veteran must certify that he or she intends to occupy or reoccupy the property as a home upon completion of the substantial improvements or repairs.
g. Intermittent Occupancy
The veteran need not maintain a physical presence at the property on a daily basis.  However, occupancy “as the veteran’s home” implies that the home is located within reasonable proximity of the veteran’s place of employment.  If the veteran’s employment requires the veteran’s absence from home a substantial amount of time, the following two conditions must be met:

  • the veteran must have a history of continuous residence in the community, and
  • there must be no indication that the veteran has established, intends to establish, or may be required to establish, a principal residence elsewhere.

Use of the property as a seasonal vacation home does not satisfy the occupancy requirement.

h. Unusual Circumstances
Discuss unusual circumstances of occupancy with the appropriate VA office or submit a description of the circumstances to the VA office for prior approval.

Continued on next page

5.  Occupancy, Continued

i. The Certification
The veteran certifies that the occupancy requirement is met by checking the appropriate occupancy block and signing:

  • VA Form 26-1802a, HUD/VA Addendum to the Uniform Residential Loan Application, at the time of loan application (prior approval loans only), and
  • VA Form 26-1820, Report and Certification of Loan Disbursement, at the time of loan closing (all loans).

This satisfies the lender’s obligation to obtain the veteran’s occupancy certification.

The lender may accept the occupancy certification at face value unless there is specific information indicating the veteran will not occupy the property as a home or does not intend to occupy within a reasonable time after loan closing.

Where doubt exists, the test is whether a reasonable basis exists for concluding that the veteran can and will occupy the property as certified.  Contact the appropriate VA office if the lender cannot resolve issues involving the veteran’s intent by applying this test.

6.  Interest Rates

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Requirement
VA no longer prescribes interest rates for VA-guaranteed loans.  The interest rate is negotiated between the veteran-borrower and the lender to allow the veteran to obtain the best available rate.
b. Changes to the Agreed Upon Interest Rate
The lender and borrower are expected to honor any lock-in or other agreements they have entered into which impact the interest rate on the loan.  VA does not object to changes in the agreed upon rate, as long as no lender/borrower agreements are violated.  The following procedures apply in such cases.Any increase in the interest rate of more than one percent requires

  • re-underwriting to ascertain the veteran’s continued ability to qualify for the loan,
  • documentation of the change, and
  • a new or corrected Uniform Residential Loan Application, (URLA) with any corrections initialed and dated by the borrower.

Reference:  For prior approval loans, see section 4 of chapter 5.

7. Discount Points

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Requirement
Veterans may pay reasonable discount points on VA-guaranteed loans.  The amount of discount points is whatever the borrower and lender agree upon.  Discount points can be based on the principal amount of the loan after adding the VA funding fee, if the funding fee will be paid from loan proceeds.
b. When Can Points be Included in the Loan?
Discount points may be rolled into the loan only in the case of refinancing loans, subject to the following limitations:Interest Rate Reduction Refinancing Loans A maximum of two discount points can be rolled into the loan.If the borrower pays more than two points, the remainder must be paid in cash.

Refinancing of Construction Loans, etc.

Loans to refinance are:

  • a construction loan,
  • an installment land sales contract, or
  • a loan assumed by the veteran at an interest rate higher than that for the proposed refinancing loan

Any reasonable amount of discount points may be rolled into the loan as long as the sum of the outstanding balance of the loan plus allowable closing costs and discount points does not exceed the VA reasonable value.

Reference:  See the maximum loan limitations in section 3 of this chapter.

Cash-out Refinancing Loans

While discount points cannot specifically be included in the loan amount, the borrower can receive cash from loan proceeds, subject to maximum loan limits (See section 3 of this chapter).  The cash received by the borrower can be used for any purpose acceptable to the lender, including payment of reasonable discount points.

Continued on next page

7. Discount Points, Continued

c. Changes to the Agreed Upon Discount Points
The lender and borrower are expected to honor any agreements they have entered into which impact the discount points paid on the loan.  VA does not object to changes in the agreed upon points, as long as no lender/borrower agreements are violated.  The following procedures apply in such cases.Any increase in discount points requires

  • verification that the borrower has sufficient assets to cover the increase,
  • documentation of the change, and
  • a new or corrected URLA with any corrections initialed and dated by the borrower

Reference:  For prior approval loans, see section 4 of chapter 5.

8.  Maturity

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Maximum Maturity
  • Amortized loans:  30 years and 32 days,
  • Nonamortized loans: 5 years.

In addition, every loan must be repayable within the estimated economic life of the property securing the loan.

The period for repayment of a loan is measured from the date of the note or other evidence of indebtedness.

b. Maturity Extending Beyond the Maximum
VA regulations provide that any amounts, which fall due beyond the maximum maturity automatically, fall due on the maximum maturity date. Thus, if a lender inadvertently makes a loan that exceeds the maximum maturity, it may still be subject to guaranty.However, the regulations also limit the amount that can be collected as a final installment, such as, they prohibit excessive ballooning.  The holder of a loan that violates this provision may desire to correct the situation through means which are legally proper in the jurisdiction.

9.  Amortization

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Requirement
All VA loans must be amortized if the maturity date is beyond 5 years from the date of the loan.  Loans with terms less than 5 years are considered term loans and need not be amortized.Generally, for amortized VA loans:

  • payments must be approximately equal,
  • principal must be reduced at least once annually, and
  • the final installment must not exceed two times the average of the preceding installments.

Exceptions to these requirements are made in the case of

  • GPMs – See section 7 of chapter 7,
  • GEMs – See section 8 of chapter 7,
  • alternative amortization plans prior approved by VA, and
  • construction loans.
b. Alternative Amortization Plans
Certain amortization plans which do not meet the requirements described in section a above may be used if approved in advance by VA.  A lender may submit an amortization plan to VA for prior approval if the plan:

  • is generally recognized; that is, is used extensively by established lending institutions, but
  • does not meet the requirements of approximately equal periodic payments and a reduction in principal not less often than annually.

Exception:  GPMs and GEMs.

Continued on next page

9.  Amortization, Continued

c. Special Provisions for Construction Loans
See “Amortization” in section 2 of chapter 7.
d. Standard and Springfield Plans
The Standard and Springfield plans satisfy VA amortization requirements.

  • The Standard plan provides for equal payments over the life of the loan.  The amount applied to interest decreases, with a corresponding increase in the amount applied to principal.
  • The Springfield plan provides for gradually decreasing payments over the life of the loan.  The amount applied to interest decreases, while the amount applied to principal remains constant.

10.  Eligible Geographic Locations for the Secured Property

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Where Can the Property be Located?
Real property securing a VA-guaranteed loan must be located in the United States, its territories, or possessions (Puerto Rico, Guam, Virgin Islands, American Samoa and the Northern Mariana Islands).

11.  What Does a VA Guaranty Mean to the Lender?

Change Date
April 10, 2009, Change 9

  • This section has been updated to correct hyperlinks and make minor grammatical edits.
  • Subsection e has been updated to note that evidence of guaranty is issued through VA’s webLGY system.
a. Protection Against Loss
VA guarantees a portion of the loan, identified on the VA Loan Guaranty Certificate (LGC) by percentage and dollar amounts.  If a loss ultimately occurs on the loan, VA will reimburse the loan holder for all or part of such loss

  • limited by the stated percentage and dollar amount of the guaranty,
  • limited by any VA maximums for reasonable and customary foreclosure expenses, and
  • subject to the lender’s compliance with applicable law and regulations.
b. Lender Responsibility
It is the lender’s responsibility to comply with all laws and regulations related to the VA Loan Guaranty Program, and thereby prevent VA’s denial or reduction of a payment on a future claim.  A lender can accomplish this by ensuring that its employees who perform work related to VA lending

  • understand and comply with VA policies, procedures and regulations, and applicable law, and
  • direct questions to VA when issues arise that are not addressed in this handbook or other materials provided by VA.
c. When is a Loan that was Closed Automatically Guaranteed?
A loan is automatically guaranteed by VA upon closing (prior to issuance of the LGC) provided the loan was made by

  • a supervised or a nonsupervised lender with automatic authority, and
  • the lender complied with applicable law and regulations.

Continued on next page

11.  What Does a VA Guaranty Mean to the Lender?, Continued

d. When is a Prior Approval Loan Guaranteed?
A prior approval loan is also guaranteed by VA upon closing (prior to issuance of the LGC) provided

  • the closed loan matches the proposed loan upon which the Certificate of Commitment was based, and
  • the lender complied with applicable law and regulations.
e. What is Evidence of Guaranty?
Evidence of guaranty is VA Form 26-1899, Loan Guaranty Certificate, which is generated electronically via VA’s webLGY application.  The LGC represents tangible proof to the lender that VA’s guaranty is given in good faith.  It is contingent upon:

  • the veteran, property and purpose of the loan being eligible,
  • no fraud or material misrepresentation on the part of the lender, and
  • the lender’s compliance with applicable law and regulations.

For example, VA may deny or reduce payment on a future claim based on the lender or holder’s noncompliance whether or not VA has issued evidence of guaranty on the loan.

The LGC also has an audit indicator that, if noted Yes, lets the lender know the case has been identified for full review.  In these instances, the lender then needs to submit a complete loan origination package to the appropriate VA office for review.  Packages should be submitted within 15 days of the LGC being generated.

f. Total Loss of Guaranty
Willful fraud or material misrepresentation by the lender or holder, or by an agent of either, will relieve VA of liability for payment of any claim on the loan.  VA also has no liability in the case of

  • forgery on the note, mortgage, loan application, or other loan documents, or
  • a Certificate of Eligibility or discharge papers that are counterfeited, falsified, or not issued by the Government.

A holder of a VA loan who acquired the loan without notice or knowledge of fraud or material misrepresentation in procuring the guaranty will not be denied payment of any claim on the loan by reason of such fraud or material misrepresentation.

Continued on next page

11.  What Does a VA Guaranty Mean to the Lender?, Continued

g. Partial Loss of Guaranty
A holder of a VA loan who fails to comply with applicable laws and regulations may receive only partial payment of a claim if VA’s liability increases due to the holder’s noncompliance.  Material misrepresentation which is not willful has the same consequence.No claim will be paid on such loan until the amount of any increase in VA’s liability is known.  The burden of proof is on the holder to establish that VA’s increased liability is not due to the holder’s noncompliance or misrepresentation.Examples of noncompliance with applicable law and regulations which may lead to an increase in VA’s liability include:

  • failure to obtain and retain the required lien on property to secure the loan,
  • failure to include the power to substitute trustees,
  • failure to procure and maintain insurance coverage,
  • failure to advise VA as to default,
  • failure to provide notice of intention to begin foreclosure action,
  • failure to provide notice to VA in any suit or action, or notice of sale,
  • improper release, conveyance, substitution or exchange of security,
  • lack of legal capacity of a party to the transaction,
  • failure to assure that escrowed/earmarked funds are expended in accordance with the agreement, and
  • failure to take into consideration limitations upon the quantum or quality of the estate or property.

12.  Post-Guaranty Issues

Change Date
April 10, 2009, Change 9

  • This section has been changed to reflect present procedures, correct hyperlinks, and make minor grammatical edits.
a. Corrections to LGCs
LGCs are generated using data entered from several sources, including the VA Funding Fee Payment System (VA FFPS).  If a lender discovers an error in reported data, such as date of loan closing, beforethey have generated the LGC, they must access the VA FFPS system to make the correction.  This will then result in the correct closing date being shown when the LGC is obtained. If the error is discovered after the LGC has been generated, lenders will need to contact the appropriate VA RLC for assistance.  An LGC with minor typographical errors that do not compromise accurate identification of the loan is valid.
b. Replacement of Missing LGC with Duplicate
A lender may obtain duplicate LGCs at any time simply by accessing the system and reprinting the LGC.
c. Transfer of Loans
It is not necessary to notify VA of the assignment of a guaranteed loan.
d. Loan Assumptions
The assumption of VA-guaranteed loans for which commitments were made on or after March 1, 1988, requires the approval of VA (or certain lenders on VA’s behalf).

Continued on next page

12.  Post-Guaranty Issues, Continued

e. Paid-in-Full Loans
Holders of VA-guaranteed loans are required to electronically report the date the loan was paid-in-full in the VA Loan Electronic Reporting Interface (VALERI) system. Lenders are required to report paid-in-full loans to VA upon full satisfaction of the loan by payment or otherwise. Lenders/servicers are not required to mail LGCs to VA when a loan is terminated. Since this information will now be reported through VALERI, there is no need to have the actual LGC returned to VA upon termination of the loan.
f. Maintenance of Loan Records
Lenders must maintain copies of all loan origination records onVA-guaranteed home loans for at least 2 years from the date of loan closing.  Even if the loan is sold, the original lender must maintain these records (or legible copies) for the required period.Loan origination records include:

  • the loan application (including any preliminary application),
  • verifications of employment and deposit,
  • all credit reports (including preliminary credit reports),
  • copies of each sales contract and addendum,
  • letters of explanation for adverse credit items, discrepancies and the like,
  • direct references from creditors,
  • correspondence with employers,
  • appraisal and compliance inspection reports,
  • reports on termite and other inspections of the property,
  • builder change orders, and
  • all closing papers and documents.

Lenders must make these records accessible to VA personnel conducting audit reviews.

Residual Income for a Kentucky VA Loan Approval
Residual income is the amount of income remaining after housing expenses, income taxes, long-term obligations and other expenses have been deducted from the borrower’s total gross pay. VA requires a specific amount of monthly residual income be available for the borrower’s use. This amount is based on the family size, location of the property and loan amount.

  • Federal, state and local taxes must be entered in DU or LP. Taxes should be calculated using the most recently published tax charts by the IRS and state or local taxing authorities. Click here for Tax tables.
  • Maintenance and utility costs may be estimated at 14 cents per square foot.

Minimum Residual Income with DTI <=41% 


Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell



2018 Kentucky First Time Home Buyer Loan Programs

via 2018 Kentucky First Time Home Buyer Loan Programs


Getting a mortgage for a home can seem like a complicated and mysterious process. Just like any good investment, you should never buy anything that you don’t understand.  Knowing how the mortgage lending system works will relieve much of the stress and anxiety associated with making what is most likely the largest purchase of your entire life. This article will help you understand…

What You Need To Know About A Mortgage… BEFORE You Get One!!!

Qualifying for a Mortgage

Home LoansMortgage companies are in business to make money by lending money that is secured by an asset large enough to sell and recover their capital if the borrower is no longer able or willing to pay the payments. They are not in the business of owning property and would rather not have to foreclose on a loan, repossess the property and sell it to recapture their capital. This does happen but it is not their primary business. They would rather have their borrowers make their payments so that they could collect the interest and move on down the road. To increase their odds of that happening, mortgage companies look at several areas of your financial history to determine if you will meet their standards. This is called Qualifying for a Mortgage.

What the mortgage company finds when they look at these areas will help determine the type of mortgage that is available to you and the interest rate you will pay on the money that you borrow.

The areas that they are interested in looking at are:

Job History

Lenders want to know if you have been in your current job and/or profession for at least two years. They also want to know if you are retired or self-employed.


TaxesMortgage lenders want to know how much your monthly income is before taxes are taken out (Gross Monthly Income). Typically you will be asked to provide check stubs for the last 30 days and Federal Tax Returns or W-2’s for the last two years to prove your income.

If you are self-employed and it is difficult for you to prove your gross income to the lender you may be able to get a “stated income” loan. If that is the route that you take, your income must be “reasonable” for your profession. Since stated income loans are riskier for the lender you will generally have a higher interest rate.

Credit History

Mortgage lenders really like it if you have a history of paying your bills on time. This is reflected in your credit report and FICO score. If you have “bad credit”, you are NOT automatically disqualified from getting a mortgage. Lower credit scores will increase the interest rate that you will be required to pay and sometimes that increase will be quite significant.

Debt Load

You can have an awesome job with an income to make Bill Gates jealous and a great credit score but if you have already acquired too much long term debt you may not qualify for the loan you want.


Mortgage lenders will want to check your bank accounts to make sure that you have the cash necessary to pay the down payment and closing costs and that you have “reserves” available to make the loan payment. Often, the lender will require 3-6 months reserves. (Reserves can be in a 401K or other retirement account that you can pull the money out of)

Requested Loan Amount

The loan you are requesting will need to be proportional to your ability to make the payments. Be reasonable with your house buying expectations – don’t expect to buy a lot more house than you can afford. The recent housing bust defined the term “house poor” and got a lot of people into financial trouble. Again, mortgage lenders would much rather you make your monthly house payments because everyone loses if they have to foreclose.

Determining YOUR Mortgage Interest Rate

The market place determines the range of interest rates available for any mortgage and the lending rates change daily. The specific interest rate you will pay is based on how well qualified you are and the type of loan you want.

Interest rates are typically based on the answers to these questions:

How Good Is Your Credit Score? 

FICO ScoreThe most widely used score is the FICO score, the credit score created by Fair Isaac Corporation. Lenders use the FICO Score to help them make billions of credit decisions every day. Fair Isaac calculates the FICO Score based solely on information in consumer credit reports maintained by the credit reporting agencies.

FICO credit scores range from 300 to 850. That FICO Score is calculated by a mathematical equation that evaluates many types of information from your credit report, at that agency. By comparing this information to the patterns in hundreds of thousands of past credit reports, the FICO Score estimates your level of future credit risk.

With the top end of the credit score being 850, anything above about 720 is considered excellent. Some local lenders set 740 as the benchmark for their preferred interest rates. Having a lower credit score DOES NOT mean you will not get a loan. You may qualify BUT your interest rate will be higher than someone with better credit.

How Big Is Your Down-Payment?

down-paymentThe Down-Payment is the amount of your own money you are going to put into buying the property. The more money you put into the property on the front end, the lower the risk of you not paying the payments. The amount of your down payment also directly affects the amount of your loan (purchase price – down payment = loan amount). This is called the Loan to Value Ratio (LTV).

The LTV is the percentage of the value of the house that the mortgage will cover (loan amount / purchase price x 100). For example, the property you are interested in buying is selling for $100,000. You have $20,000 for the down-payment and want a mortgage for the other $80,000. The LTV for this mortgage is 80%.

Similar to the LTV is the Combined Loan to Value Ratio (CLTV). The CLTV is used when 2 loans are used to finance the home purchase. You may see or hear terms like “80-20” or “80-15-5”. This refers to the 1st lien percentage (80), the 2nd lien percentage (20 or 15) and the down payment percentage (5).

How Much Debt Do You Currently Have?

It only makes sense that the more debt you have the riskier the loan is for the lender. There is a finite amount of income in all of our households and it all gets allocated every month. Lenders use a “debt-to-income” ratio to determine how qualified you are for the loan based on how much debt you already have.

debt_to_income_ratioYour Debt to Income Ratio (DTI) is the percentage of your income that you owe in debt on a monthly basis. For example, if you make $5,000 per month, and have debt payments (car loans, credit cards, student loans, etc.) of $2,000, your DTI ratio is 40%. The higher this ratio is, the less likely you will be to qualify for a low interest rate.

Conventional loans typically have a qualifying ratio of 28/36. FHA loans will sometimes allow for a higher debt load of 29/41 qualifying ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to your mortgage. That includes the loan principal and interestprivate mortgage insuranceproperty taxeshomeowners insurance, and homeowner’s association dues.

The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes monthly payments for carsboatsmotorcycleschild support payments and monthly credit card payments.

 Example:  of a 28/36 qualifying ratio:

Gross monthly income of $5,000 x .28 = $1400 can be applied to housing.

Gross monthly income of $5,000 x .36 = $1,800 can be applied to recurring debt plus housing expenses

Example: of a 29/41 qualifying ratio:

Gross monthly income of $5,000 x .29 = $1,450 can be applied to housing.

Gross monthly income of $5,000 x .41 = $2,050 can be applied to recurring debt plus housing expenses

These are just general guidelines and everyone’s personal finances are unique. To get the real answer about how well you qualify and to determine how large a mortgage a local lender will offer contact one of our preferred lenders and visit with a loan officer.

Here is a KEY point to remember…

FICO KEYYour credit score is THE most vital piece of information

when qualifying for a loan.

I am a Dave Ramsey fan and I believe in paying cash but even Dave concedes when it comes to buying a house. In Financial Peace Dave calls the FICO score an “I love debt score” and brags about not having one. He even tells a story about trying to rent an apartment and he couldn’t because he doesn’t have a FICO score. He then says, “I can’t rent an apartment because I don’t have a FICO score… I could write a check and buy the whole complex but I can’t rent an apartment because I don’t have a credit score!” Which is a great story for someone that CAN write a check and buy the whole complex… The rest of us need to maintain a really good credit score.

If you’re ready to buy a new home

and want to shop around for the best deal on a mortgage…

Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping. In addition, the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.

What Type of Loan Are You Looking For?

40 year fixed, 30 year fixed, 20 year fixed, 15 year fixed, 10 Year Fixed, Adjustable Rate, etc. All of these loan types have different interest rate ranges.

Locking Your Interest Rate

Once you have completed a loan application, determined what type of loan you want and qualified for that loan you can “lock” the interest rate for that loan. Locking the Interest Rate means, for the period of the “lock” you are guaranteed that interest rate. Lock periods are typically 15, 30 or 60 days, although you may be able to get an extended lock period.

Rate LockOnce you lock your interest rate:

If you do not close on the loan before the lock period expires, you will NOT have a guaranteed interest rate anymore. And, the longer the lock period, the higher the rate will be. For example, a 15 day lock may be at 5.125%, a 30 day lock at 5.25%, and a 60 day lock at 5.375%. So, before locking your loan, be sure you are not locking for too long a time or for too short a time.

Interest rates fluctuate daily and may go up or down. By locking your rate, you are betting that rates will go up in the future.

 What does “Buying Down” the Interest Rate Mean?

You can reduce the interest rate on your mortgage by paying “points” at closing. A point is 1% of the value of the loan, so a point on a $200,000 loan is $2,000. If you “buy down” you loan to a lower interest rate you will have lower monthly payments and pay less interest over the life of the loan. However, “buying down” you loan to a lower interest rate means more money out of your pocket on the front end when you close the loan. You should do the math and weigh each side of the equation before making a decision about buying down the interest rate or not.

What Are The Closing Costs and Fees?

Closing CostsThere are four types of closing costs and fees…

Those charged by the mortgage company and/or mortgage broker, those charged by 3rd party vendors, those charged by the Title Company, Escrow Company or Escrow Attorney and Pre-Paid Charges.

Lender Fees

These can include loan origination fees and Broker fees which are usually a percentage of the loan amount; administrative fees and application fees, processing fees and underwriting fees. These last fees usually run from $100 to $500, and ALL of them are negotiable.

3rd Party Vendor charges

These are charges collected by the lender and paid to outside companies that provide a service. These are not usually negotiable and can include appraisal charges, flood certification fees, courier charges, document prep fees, mortgage lender attorney fees, etc.

Title Company charges

These are the fees charged by the Title Company, Escrow Company or Escrow Attorney. They are usually set by the state and are not negotiable. These charges include title insurance, attorney fees, state/county/city registration fees, etc.

Pre-Paid Charges

If the lender will be establishing an escrow account to pay taxes and insurance, the buyer will pre-pay taxes and insurance to establish an escrow account and will pre-pay the interest on the loan until the end of the month in which the loan closes.

 Does The Closing Date Really Matter?

The day you choose to close determines the amount of pre-paid interest you will have to pay. Closing at the end of the month means that you will pay less pre-paid interest. For example, if you close on October 1st you will pay 31 days of pre-paid interest. If you close on October 31st you will pay 1 day of pre-paid interest.

When Is My First Payment Due?

It doesn’t matter what day of the month you close on, you will not have your first loan payment due until a month has passed. So, if you close in October, your first payment is due in December – you get November for free!

What Is PMI?

pmi-basics1Private Mortgage Insurance (PMI) is required on all loans that have a LTV greater than 80%. PMI is an insurance premium that you pay every month as part of your monthly payment. However, PMI is not intended to protect you. PMI is insurance coverage that protects the mortgage lender against default on the loan. If you stop making your payments, the mortgage lender is paid a percentage of the loan amount (usually 25% to 35%) by the insurance company.


Customer Testimonials

We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel’s website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services.

Angela Forsythe

“We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel’s website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him.” September 2016

Monica Leinhardt

“We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan.

Kayle Griffin

“Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010

Tim Beck

“Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.”

September 1, 2010 Nancy Nalley
“I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them.

August 23, 2012 Jon ClarK

“Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011

RICHARD VOLZ , Residential Sales , Remax Foursquare Realty
“When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgeable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say’s they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!”

August 21, 2010
Stacie Drake


“We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else.”

Melody Glasscock March 2014

Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn’t expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS.
Cee Bellisle August 2017

Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours.


Anderson Johnson April 2018



We moved from Michigan to Northern Kentucky area and we were really impressed. We got a USDA loan no money down and closed in less than 3.5 weeks. We shopped around online with other lenders but Joel was always first to respond and his rates were just a little better than other lenders. He kept us informed through the process along with our realtor and there was absolutely no surprises like we heard from other co-workers and friends that they experienced in their loan process. We have already referred another co-worker to Joel . He’s AWESOME!

Patty Kingston June 2018


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