Mobile Home Loan Guidelines for Kentucky: FHA, VA, USDA, and Conventional Loans

Manufactured home properties are often more affordable than standard single-family homes, making them an attractive option for many prospective buyers. Whether you're a first-time homebuyer or looking to refinance, there are financing options for manufactured homes through FHA, VA, USDA, and Conventional loan programs.

Important Guidelines for Manufactured Home Mortgages in Kentucky

Before diving into specific loan programs, it's essential to understand two critical requirements that apply to almost all manufactured home loans in Kentucky:

Permanent Foundation: The manufactured or mobile home must be on a permanent foundation. This means the home must be permanently affixed to the land with proper structural supports, meeting local building codes. Read more here what constitutes a permanent foundation ➡️https://www.huduser.gov/portal/Publications/PDF/foundation_guide_complete.pdf

Single Relocation: The home must have only been moved once, from the factory or dealership to the permanent site. Homes that have been relocated more than once typically do not qualify for financing.

Keeping these two key factors in mind will significantly improve your chances of securing a mortgage loan for a manufactured home.

Here's a detailed look at the requirements and guidelines for each program:

FHA Manufactured Home Loans

Minimum Credit Score: 500 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase or Rate-Term up to 96.5% LTV; Cash Out up to 80% LTV

Manual Underwrites: Allowed

Additional Requirements:

Real Property Conversion required at closing

Home must be your primary residence

Property cannot have been previously installed or occupied at another site

Age of Home: Home must have been constructed after June 15, 1976

USDA Manufactured Home Loans

Minimum Credit Score: 550 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase up to 100% LTV

Manual Underwrites: Required; Maximum Debt-to-Income (DTI) ratio is 29/41

Additional Requirements:

Home must be located in a USDA-eligible rural area

Real Property Conversion required at closing

Home must be a 2006 model or newer

Property cannot have been previously installed or occupied at another site

Must be your primary residence 

You cannot do not a mobile home loan on a USDA loan in Kentucky --Only available  in select pilot States and Kentucky is not in that program

VA Manufactured Home Loans

Minimum Credit Score: 500 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase or Rate-Term up to 100% LTV; Cash Out up to 80% LTV

Manual Underwrites: Allowed

Additional Requirements:

Real Property Conversion required at closing

Property can be previously installed or occupied at another site

Must be your primary residence

Age of Home: Home must have been constructed after June 15, 1976

Conventional Manufactured Home Loans

Minimum Credit Score: 620 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase or Rate-Term up to 95% LTV; Cash Out up to 65% LTV

Additional Requirements:

Real Property Conversion required at closing

Home must have been constructed after June 15, 1976

Property cannot have been previously installed or occupied at another site

Primary and second homes allowed

Why Choose a Manufactured Home Loan?

Manufactured homes offer a cost-effective alternative to traditional housing, with modern designs and layouts that meet the needs of today's homeowners. With these flexible loan options, Kentucky homebuyers have access to financing programs tailored to manufactured housing.

Whether you’re looking for a low credit score option, zero money down, or a loan for a primary or secondary residence, these programs cater to a variety of financial situations.

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

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Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

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

Different Types of Kentucky Home Loans

When it comes to getting a mortgage loan in Kentucky, there are four agencies that will probably end doing your loan. Most mortgage loans are backed by either the government (FHA,VA,USDA) and Fannie Mae or Freddie Mac which are known as conventional mortgage loans. 

Below I explain the difference in each of those four programs and where you could possibly fit into.

Conventional Loan

• At least 3%-5% down

• Closing costs will vary on which rate you choose and the lender. Typically, the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.

Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.

The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home.

Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.

Kentucky USDA Rural Housing Program

If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.

Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.

They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.

They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area.

A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern Kentucky.

There is a map link below to see the qualifying areas.

USDA requires 3 years removed from bankruptcy and foreclosure.

There is no max USDA loan limit.

Kentucky FHA Loan

FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment with a 580-credit score or higher. And will go down to a 500-credit score with 10% down payment.

The current mortgage insurance requirements are kind of steep when compared to USDA, VA, but the rates are usually good so it can counteract the high mi premiums. As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.

The mi premiums are for life of loan like USDA.

FHA requires 2 years removed from bankruptcy Chapter 7 and 1 year from a Chapter 13 plan and 3 years removed from foreclosure.

Kentucky VA Loan

VA loans are for veterans and active-duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. 

It does have a funding fee like USDA, but it is higher starting at 2.3% for first time use, and 3.6% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.

VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit and NO max loan limits in Kentucky 

Most VA lenders I work with will want a 580-credit score even though VA does not require a minimum credit score per se on their written guidelines.

VA requires 2 years removed from bankruptcy or foreclosure.

Kentucky Down Payment Assistance

This type of loan is administered by KHC in the state of Kentucky. They typically have $10,000 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 KHC requires 660 credit score.

The max debt to income ratios is set at  50% respectively.

Joel Lobb (NMLS#57916)

Senior Loan Officer





Text/call 502-905-3708

kentuckyloan@gmail.com


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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/

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Kentucky FHA Loan Lender Requirements for Approval

How to Qualify for a Kentucky FHA Loan Approval:

If you're looking to buy a home in Kentucky and are considering a Kentucky FHA loan, it's essential to understand the qualifying criteria and the necessary steps. This article covers all the crucial aspects you need to know, from credit scores, bankruptcy, work history, collections, closing, home insurance, title, debt ratio , down payment and other required documents for pre-approval for a Kentucky FHA loan pre-approval letter.

Credit Score for Kentucky FHA loan

For an FHA loan in Kentucky, the minimum credit score requirement is typically 580 for maximum financing with a 3.5% down payment. If your score is between 500 and 579, you may still qualify, but you will need a higher down payment of at least 10%.

• Any judgments or collections on the credit report must be resolved or satisfactorily explained. Collections do not have to be paid but they will count them in your debt to income ratio. If they are judgements, they will have to be paid off because they could effect the clear title of the home
• Cosigners are allowed. Family members or close associates okay. They don't have to live in the home with you. Cosigner are used to for income purposes only or work history that does not meet FHA  lender requirements .Not used to compensate for the primary borrowers bad credit. They always take the lowest credit score of both borrowers. 

Bankruptcy and Foreclosures for Kentucky FHA loans

• Bankruptcy: You can qualify for an FHA loan two years after a Chapter 7 bankruptcy discharge, provided you have re-established good credit or have not incurred new debt. For a Chapter 13 bankruptcy, you need one year of the payout period completed and permission from the court to enter into a new mortgage.
• Foreclosures: You must wait three years after a foreclosure before you can qualify for an FHA loan. This period can be reduced if the foreclosure was due to extenuating circumstances beyond your control.

Debt-to-Income Ratio (DTI)

The FHA guidelines typically require a front-end DTI (monthly mortgage payment divided by gross monthly income) of no more than 31% and a back-end DTI (total monthly debt payments divided by gross monthly income) of no more than 43%. However, higher ratios may be accepted with compensating factors, such as significant cash reserves or high credit scores. Can be much higher with AUS approval with 45% and 57% respectively on the front end and back end.

Down Payment for Kentucky FHA loans

The standard down payment for a Kentucky FHA loan is 3.5% of the purchase price, which is feasible for many first-time homebuyers. This down payment can come from savings, a gift from a family member, or an approved down payment assistance program. 10% down payment needed with scores below 580.

Checklist of Documents Needed for Kentucky FHA loan Pre-Approval

To get pre-approved for a Kentucky FHA loan, you'll need to provide several documents, including:

• Proof of identity (driver’s license or passport)
• Social Security number
• Recent pay stubs
• W-2 forms for the past two years
• Federal tax returns for the past two years
• Bank statements for the last two to three months
• Employment verification letter
• Debt information (credit cards, student loans, auto loans)
• Proof of additional income (alimony, child support, bonuses)

Work History for Kentucky FHA loans

You need to show a stable work history for at least the past two years. If you have changed jobs, the new position should be in the same field or demonstrate career advancement.

Loan Limits Kentucky FHA loan

The FHA loan limits in Kentucky vary by county and are set based on the median home prices in the area. In most counties, the limit for a single-family home is $498,257 for a single-family home. in 2024, but this amount can be higher in more expensive areas.

Income Limits Kentucky FHA loan

There are no specific income limits for FHA loans; however, your income must be sufficient to cover the mortgage payments and other debts. Lenders will assess your ability to repay the loan based on your income, debts, and employment history.

Down Payment Assistance Grants Kentucky FHA loan

Kentucky offers several down payment assistance programs to help first-time homebuyers. These programs can provide funds to cover the down payment and closing costs. Some popular programs include:

• Kentucky Housing Corporation (KHC) Programs: KHC offers several down payment assistance options, including repayable and forgivable loans. $10,000 available at 3.75% rate currently over 10 year pay back period. Changes periodically. Check your lenders requirements with income limits, loan limits, debt to income ratio requirements
• Local Government Programs: Many local governments offer grants and loans for down payment assistance.

• Federal Loan Programs for First-Time Homebuyers in Kentucky

  In addition to KHC programs, several federal loan options are available to Kentucky residents, including:

  • Kentucky Federal Housing Administration (FHA) Loans: FHA loans are insured by the U.S. Department of Housing and Urban Development (HUD) and cater to borrowers with lower credit scores (minimum 580 with a 3.5% down payment).
  • Kentucky Department of Veterans Affairs (VA) Loans: Active-duty military personnel, veterans, and eligible family members can qualify for VA loans with no down payment required. These loans typically offer lower interest rates than conventional mortgages.
  • Kentucky USDA Loans: Guaranteed by the U.S. Department of Agriculture (USDA), these loans are available to moderate-income borrowers in designated rural areas, with no down payment required.

  • You may qualify for one of these programs.

    • HUD Community Development Block Grants (CDBG) - Kentucky contacts - HUD provides grant money to communities and those funds may be used to assist homebuyers
      • Ashland
      • Bowling Green
      • Elizabethtown
      • Hopkinsville
      • Lexington
      • Louisville
      • Owensboro
    • HUD HOME Program - Kentucky contacts - HUD provides grant money to communities designated as participating jurisdictions for assisting homebuyers, rental assistance, and other housing initiatives
    • Community Ventures Corporation Kentucky Home Financing
    • The Kentucky Housing Corporation offers:
      • Homeownership Programs
      • Counseling Resources
    • Habitat for Humanity - Through volunteer labor and donations of money and materials, Habitat builds and rehabilitates simple, decent houses with the help of the homeowner (partner) families
    • Federal Home Loan Bank of Cincinnati - serves Kentucky residents by offering various homebuying programs including Welcome Home grants. For more information, you may call 1 (888) 345-2246
    • Kentucky Association for Community Action - helps to fund housing programs for low-income residents
    • Federal Appalachian Housing Enterprise (FAHE) - provides housing assistance in rural, low-income, Appalachian communities
    • Housing Partnership, Inc. - provides affordable housing services for residents of Jefferson County
    • Secondary financing/down payment assistance programs are listed by state
    • USDA Rural Development - programs that reduce the cost of homeownership for low and moderate-income families.

     

  Additional Resources

  • City and County Programs: Some Kentucky cities and counties offer their own down payment assistance programs or resources for first-time homebuyers. It's recommended to research programs available in your target location.
  • HUD Homeownership Programs: The U.S. Department of Housing and Urban Development provides resources for homeownership assistance programs across the country. You can explore their website for additional options.

Seller Concessions for Kentucky FHA loans

Sellers can contribute up to 6% of the home's purchase price toward closing costs, prepaid expenses, discount points, and other financing concessions. This can significantly reduce your out-of-pocket expenses.

Appraisals and Inspections Kentucky FHA loan

• Appraisals: An FHA-approved appraiser must conduct an appraisal to ensure the property's value and condition meet FHA standards. Always required for FHA approval and ordered by lender.
• Inspections: While not required by FHA, a home inspection is highly recommended to uncover any potential issues with the property. Not required, and ordered by borrower. Lender never sees the inspection report on home.

Home Insurance for Kentucky FHA loans

Homeowners insurance is mandatory for all FHA loans. You need to secure a policy that covers the property against loss or damage.

Title Report for Kentucky FHA loans

A title report ensures that the property has a clear title with no outstanding liens or claims. This is a crucial step in the home buying process to protect your investment.

Earnest Money Deposit for Kentucky FHA loans

An earnest money deposit is typically required to show the seller that you are serious about purchasing the home. This amount varies but is usually between 1% and 3% of the purchase price. $500 is typical in Kentucky for a deposit on a home you are buying.

Credit Reports for Kentucky FHA loans

Lenders will pull your credit report to assess your creditworthiness. It's important to check your credit report for errors and ensure that all information is accurate before applying for a loan. Some lenders will charge you upfront for the credit report fee and others will pull all three credit reports from Experian, Transunion and Equifax for free. Usually lender will not share the report with you but give you the scores. Scores go from 350 to 850 on each credit bureau.

Time to Close on a Kentucky FHA loan

The time to close an FHA loan can vary but typically ranges from 30 to 45 days. This period can be shorter or longer depending on various factors, including the lender's efficiency and the completeness of your documentation.

Locking in Rate on a Kentucky FHA loan

Once you are approved for a loan, you can lock in your interest rate to protect against rate fluctuations. Rate locks can last from 15 to 180 days or longer, depending on the lender.

CAIVRS Check for FHA loan in Kentucky

The Credit Alert Verification Reporting System (CAIVRS) is used to determine if a borrower has a federal debt or delinquency. If your name appears on this list, you may be ineligible for an FHA loan until the issue is resolved. So if you are delinquent on any student loan debt, back taxes to the IRS or social security overpayments, this can stop your Kentucky FHA loan pre-approval

Student Loan Rules for FHA Kentucky FHA loan

For FHA loans, the monthly payment for student loans is calculated as either .5% of the outstanding balance or the actual documented payment amount, whichever is greater. If your loans are in deferment or forbearance, .5% of the outstanding balance will be used for DTI calculations.

Delinquent Government Debt Kentucky FHA loan

If you have delinquent government debt, such as unpaid federal taxes or a defaulted student loan, you may not qualify for an FHA loan until the debt is resolved.

By understanding these requirements and preparing accordingly, you can increase your chances of qualifying for an FHA loan in Kentucky and successfully purchasing your new home.

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Joel Lobb, American Mortgage Solutions (Statewide)

Joel has worked with KHC for 14 of his 25 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 $10,000 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

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.  

Kentucky Mortgage Application for KHC, FHA, VA, USDA Zero Down Loans

APPLY ONLINE BY CLICKING HERE OR CALL OR TEXT 502-905-3708 OR EMAIL KENTUCKYLOAN@GMAIL.COM

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