Kentucky first-time homebuyers with a focus on FHA, VA, USDA Home loans in Kentucky

Kentucky First-Time Homebuyer Loan Programs: FHA, VA, and USDA Explained

If you're a first-time homebuyer in Kentucky, navigating the mortgage landscape can feel overwhelming—but it doesn’t have to be. At Joel Lobb, Mortgage Loan Officer, we simplify the process by helping you understand your best loan options. 

Here’s a side-by-side breakdown of FHA, VA, and USDA home loans—each designed to help you become a homeowner without breaking the bank.

FHA Loan – Ideal for Buyers with Lower Credit Scores

Minimum Credit Score: 580+ (lower scores possible with a higher down payment)
Down Payment: 3.5% minimum
Debt-to-Income Ratio:

1. Front-End: Max 45%

2. Back-End: Max 56.99%
   Employment: Steady job history (2 years preferred)
   Past Credit Issues: Lenient with past bankruptcy or foreclosure
   Time to Close: ~30–45 days
   Appraisal Requirements: Must meet FHA’s Minimum Property Standards
   Income Documentation:

3. Recent pay stubs

4. W-2s (past 2 years)

5. Tax returns

6. Proof of any additional income

 VA Loan – Zero Down for Veterans and Active Duty Military

1. Minimum Credit Score: No official requirement (most lenders look for 620+)
2. Down Payment: None required
3. Debt-to-Income Ratio: 41% (can go higher with compensating factors' good residual income, high credit scores, lots of reserves and assets)Residual Income Requirements. Click here 
4. Employment: Stable income and employment for last two years
5. Past Credit Issues: More flexible on bankruptcies and foreclosures
6. Time to Close: ~45–60 days-
7. Appraisal Requirements: Property must meet VA Minimum Property Requirements (MPRs)
8. Income Documentation:

• Pay stubs

• W-2s

• Tax returns

• Documentation for bonuses, alimony, rental income (if applicable)

 USDA Loan – No Money Down for Rural Kentucky Buyers

1. Minimum Credit Score: 640 for GUS AUTOMATED APPROVAL (some exceptions possible on a manual underwrite with no score)
2. Down Payment: 0%
3. Debt-to-Income Ratio: 32%and 45% with 2 history (2 years preferred of work. Minimum of 12 months)
4. Past Credit Issues: Consideration given to past credit challenges, bankruptcy, or foreclosure
5. Time to Close: ~30–60 days-A little longer due to conditional commitment needed from USDA so a two step process to get final clear to close. 
6. Appraisal Requirements: Must pass USDA’s health and safety standards, typically must pass FHA HUD standards for appraisal requirements but does not have to be done by a FHA appraiser.
7. Income Documentation:

• Pay stubs

• W-2s

• Federal tax returns (last 2 years)

• Documentation for other income streams

 Appraisal requirements and income documentation

 

FHA Loan: Appraisal Requirements:

The property must meet FHA guidelines, including minimum property standards and safety requirements. An FHA-approved appraiser assesses the property's value and condition.

Income Documentation: 

Generally requires recent pay stubs, W-2 forms, tax returns for the past two years, and proof of additional income sources (if applicable).

VA Loan: Appraisal Requirements:

 VA loans require a VA appraisal conducted by a VA-assigned appraiser. The appraisal assesses the property's value and ensures it meets VA's Minimum Property Requirements (MPRs).

Income Documentation: 

Typically includes pay stubs, W-2 forms, tax returns for the past two years, and proof of any additional income (e.g., bonuses, alimony, rental income).

USDA Loan: Appraisal Requirements:

USDA loans require a USDA appraisal to determine the property's value and ensure it meets USDA's standards for safety and livability.

Income Documentation: 

Similar to FHA and VA loans, USDA loans require pay stubs, W-2 forms, tax returns for the past two years, and documentation of other income sources.

These appraisal requirements and income documentation are crucial parts of the loan application process. Lenders use this information to assess the property's value, ensure it meets safety standards, and verify the borrower's income stability and ability to repay the loan.

Joel Lobb  Mortgage Loan Officer

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | 

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).