How much income do I need qualify for Kentucky Home Loan?

Kentucky Lender's Criteria: Debt-to-Income Ratios

The Debt-to-Income (DTI) ratio is a critical factor in determining whether you qualify for a mortgage along with credit, work history and assets. It measures how much of your gross monthly income is used to cover your monthly debt obligations.

For Most Kentucky Mortgage loans ,the  debt to income ratio is centered around the front end ratio and back end ratio. The front end ratio will vary according to the different types of loans, and I will show them below.  The backend ratio, which measures the new house payment along with your current monthly payments on the credit report along with any court ordered payments like child support, DTI limit is typically 45 to 50%

From a Kentucky Mortgage lender's perspective, your ability to purchase a home depends largely on the following factors:

Front-End Ratio

The front-end ratio is the percentage of your yearly gross income dedicated toward paying your mortgage each month. Your mortgage payment consists of four components: principal, interest, taxes and insurance (often collectively referred to as PITI) A good rule of thumb is that PITI should not exceed 31% of your gross income. If you make $100,000 a year, then your max house payment to include escrows for home insurance, mortgage insurance, property taxes would be $2583.00

Back-End Ratio

The back-end ratio, also known as the debt-to-income ratio, calculates the percentage of your gross income required to cover your debts. Debts include your mortgage, credit-card payments, child support and other loan payments. Most lenders recommend that your debt-to-income ratio does not exceed 45% of your gross income. To calculate your maximum monthly debt based on this ratio, multiply your gross income by 0..45 and divide by 12. For example, if you earn $100,000 per year, your maximum monthly debt expenses should not exceed $3,750 with new mortgage payment. Utility bills, car insurance, cell phone bills, insurance payments does not factor into this ratio. Only bills listed on credit report and 401k loan and child support payment




If you are looking to purchase your first home, you have probably been doing your research about properties in your area, where you might be able to obtain a loan and how to qualify for it. A key term you may recognize from all that research is "debt-to-income ratio," which refers to the figure you get when you add up all your monthly debt payments and then divide that number by your monthly income. In laymen's terms, the debt-to-income ratio gives potential mortgage lenders an idea of how much your expenses are each month in comparison to how much you actually earn.


Depending on where you are in the home-buying process, you may have a good idea of where your credit score lands. As important as a strong credit score is, however, a favorable debt-to-income ratio is arguably of equal importance, and it may be just as closely scrutinized by any potential mortgage lender.

Front-end ratios vs. back-end ratios

When you try and obtain a loan, expect possible lenders to review two types of debt-to-income ratio. The front-end ratio, or "housing" ratio, gives them an idea of what percentage of your monthly income would have to go toward home-related expenses, such as the mortgage, associated taxes and any additional fees, such as homeowner's association expenditures, that may apply.


The back-end ratio, on the other hand, takes a more cumulative approach and compares your monthly income to all your expenses, from the housing-related ones to school tuition, child support, car payments and any other financial obligations you may have.

The ideal debt-to-income ratio

The exact percentage your lender will look for will likely vary based on factors such as your credit score, how much you have in your savings account and how much you have to put down for your down payment. Most standard lenders, however, prefer to see something in the ballpark of 28 percent for a front-end ratio. For a back-end ratio, they will likely look for a percentage that does not exceed 36 percent. Federal Housing Authority lenders typically look for a front-end ratio of about 31 percent and a back-end ratio that does not exceed 43 percent.

DTI Calculator for Kentucky Mortgage Loans

Wondering how much house you can afford in Kentucky? Use our simple DTI (Debt-to-Income) ratio calculator to estimate your maximum monthly mortgage payment based on FHA, USDA, VA, KHC, and Conventional loan program guidelines. This is especially helpful for first-time homebuyers in Kentucky applying for zero-down USDA loans, FHA loans, or KHC Down Payment Assistance.

DTI Max House Payment Calculator

Gross Monthly Income ($): Total Monthly Debt Payments ($): Front-End DTI (%) Back-End DTI (%)

At EVO Mortgage, we help clients across Kentucky understand how to qualify based on DTI ratios, credit scores, and loan program rules. Contact Joel Lobb or call/text 502-905-3708 to get pre-approved today!

Lower a high ratio

Simply put, the most effective way to lower a high debt-to-income ratio and therefore make yourself more appealing to lenders is to pay off some of your debt. If you have a cosigner who may be willing to help you out with a loan, that could serve as an additional method of getting around a high ratio.

To calculate the debt-to-income (DTI) ratio for the scenario you provided, you'll need to figure out both the front-end and back-end DTI ratios.

1. Front-end DTI ratio: This ratio only includes the mortgage payment (including principal, interest, taxes, and insurance) divided by your gross monthly income.




2. Back-end DTI ratio: This ratio includes all monthly debts (mortgage, credit cards, auto loans, student loans, etc.) divided by your gross monthly income.

   
   

(DTI) ratio requirements for different types of mortgage loans in Kentucky, including FHA, VA, USDA, Fannie Mae, and Kentucky Housing loans

Here’s a breakdown showing how much house payment a borrower making $5,000 gross per month with $1,000 in monthly debts can qualify for across various loan programs in Kentucky, based on standard DTI guidelines. The table displays both front-end and back-end limits and illustrates which payment amount would be the true qualifying cap under each program. Let me know if you want to add taxes, insurance, or MI estimates next.

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.

Kentucky Local Home Loan Lender Services

 First-Time Home Buyers Welcome
 FHA, Rural Housing (USDA), VA, and Kentucky Housing Corporation (KHC) Loans
 Conventional Loan Options Available
 Fast Local Decision-Making
 Experienced Guidance Through the Home Buying Process

Kentucky Mortgage Loan Programs | FHA, VA, USDA & Conventional Guide

Understanding the Four Main Mortgage Loan Programs in Kentucky

When buying a home in Kentucky, your mortgage will typically fall under one of four major loan programs: FHA, VA, USDA, or Conventional (Fannie Mae/Freddie Mac). Each program offers unique benefits depending on your credit, income, military status, and location. Below is a streamlined breakdown to help you determine the best fit for your situation.

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Conventional Loan

• Minimum down payment: 3%–5%
• Minimum credit score: 620 (680+ for best pricing)
• Mortgage insurance can be removed at 80% equity
• Best for: buyers with strong credit & stable income
• Bankruptcy wait: 4–7 years
• Foreclosure wait: 7 years
• Closing costs can be lender-paid (higher rate)

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Kentucky USDA Rural Housing Loan

• 100% financing (0% down)
• Credit score: 640+ for automated GUS approval
• Mortgage insurance: .35% monthly, 1% upfront
• Manual underwriting ratio caps: 29% / 41%
• Property must be USDA-eligible rural area
• Bankruptcy wait: 3 years
• No USDA loan limit

USDA Map Eligibility: Click here to check address eligibility

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Kentucky FHA Loan

• 3.5% down with 580+ score
• 10% down with scores 500–579
• Allows gifts + KHC down-payment assistance
• Mortgage insurance: 0.85% monthly, 1.75% upfront, MI for life
• Bankruptcy wait: 2 years (Ch. 7), 1 year Ch. 13
• Foreclosure wait: 3 years

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Kentucky VA Loan

• 0% down for veterans & eligible military
• No monthly mortgage insurance
• Funding fee: 2.3% first use / 3.6% subsequent (financed)
• Credit score: most lenders want 580+
• No income limits, no loan limits
• Bankruptcy/foreclosure wait: 2 years

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Kentucky Down Payment Assistance (KHC)

• $10,000 second mortgage repaid over 10 years
• Works with FHA, VA, USDA, Conventional
• Minimum credit score: 620 (660 for KHC Conventional)
• Max DTI: 50%

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Explore More Kentucky Home Loan Resources

• Kentucky First-Time Homebuyer Guide
• Kentucky FHA Loan Requirements
• Kentucky VA Home Loan Guide
• USDA Property Eligibility Map for Kentucky
• Documents Needed for a Mortgage Loan
• Start a Mortgage Pre-Approval

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Joel Lobb
Mortgage Loan Officer – Kentucky FHA, VA, USDA, KHC, Conventional
Evo Mortgage

Email: kentuckyloan@gmail.com
Call/Text: 502-905-3708
Website: www.mylouisvillekentuckymortgage.com
Address: 911 Barret Ave., Louisville, KY 40204

EVO Mortgage – NMLS #1738461
Joel Lobb – NMLS #57916

What Happens If the Federal Government Shuts Down and the effect FHA, VA, Fannie Mae, USDA Mortgage loans in Kentucky

How a Federal Government Shutdown Can Impact FHA, VA, USDA, KHC and Fannie Mae Mortgage Loans in Kentucky

A federal government shutdown can create delays or temporary stoppages in specific steps of the mortgage process. For Kentucky homebuyers using FHA, VA, USDA/Rural Housing, KHC, or Fannie Mae conventional financing, certain functions rely directly on federal employees, federal systems, or federal verifications. Below is a clear breakdown of how each program is affected during a shutdown, based on past shutdowns and agency guidance.

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FHA Loans in Kentucky

• FHA loans can generally close as normal. FHA Connection remains available.
• Delays may occur if a file requires manual underwriting, case-level questions, or assistance from HUD staff.

VA Loans in Kentucky

• VA loans continue to close normally because the VA’s WebLGY system stays operational.
• Any task requiring direct VA personnel involvement (such as certain COE corrections) may see slower turnaround times.

Fannie Mae (Conventional Loans)

• Fannie Mae conventional loans typically move forward without major disruption.
• However, a shutdown may delay IRS tax transcripts or Social Security number validation required by the AUS findings.

USDA Rural Housing (RHS Guaranteed Loans)

• This is the program most severely impacted.
• Lenders cannot close a USDA loan without a valid RHS Conditional Commitment.
• If USDA staff are furloughed, Conditional Commitments and loan note guarantees are paused — causing closing delays in Kentucky until the government reopens.

KHC – Kentucky Housing Corporation

• KHC’s down payment assistance and programs remain active.
• KHC must follow agency rules for FHA, VA, USDA, and conventional loans during a shutdown.

Verification of Employment (VOE)

• Most lenders require a VOE within 10 days of closing.
• A shutdown can make it difficult to verify federal employees if their HR departments are unavailable.
• Conventional exceptions:
  • Military borrowers may use a recent LES.
  • Files validated through DU (Desktop Underwriter) may qualify without manual VOE steps if all conditions are met.

Flood Insurance / NFIP

• If the National Flood Insurance Program (NFIP) lapses, closings requiring flood insurance may be delayed.
• KHC follows each agency’s temporary flood guidance during shutdown periods.

Tax Transcripts & Social Security Validation

• If these items are required by the AUS or underwriter, they must be completed before closing.
• SSA-89 is used to validate Social Security numbers — delays may occur if federal processing is limited.

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✅ UPDATE: Government Reopened — All Mortgage Operations Back to Normal

The federal government is now fully reopened, and all major mortgage-related systems and departments (FHA, VA, USDA, IRS, SSA, NFIP) are operating normally again.

This means:

• USDA Conditional Commitments are being issued again
• IRS tax transcripts are processing normally
• Social Security validations (SSA-89) are operational
• FHA and VA staff-supported functions are back on normal timelines
• VOE for federal employees is no longer restricted

If you have a loan in process or are planning to start one, everything is back to standard turn-times across Kentucky.

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Joel Lobb – Mortgage Broker
FHA • VA • USDA • KHC • Fannie Mae
Call/Text: 502-905-3708
kentuckyloan@gmail.com
www.mylouisvillekentuckymortgage.com

NMLS #57916 | Company NMLS #1738461
Equal Housing Lender

The views and opinions expressed are for informational purposes only, not a commitment to lend. All programs subject to change and credit approval.

Got Disputes on Your Credit Report? Read This Before Applying for an FHA Loan!

FHA Loan Rules on Disputed Accounts (Updated 2025)

If you’re applying for an FHA loan, but your credit report shows disputed accounts, you need to understand how this can affect your approval. In this video, Joel Lobb — licensed Kentucky Loan Officer (NMLS #57916) — explains the FHA’s updated rules for handling disputed accounts, what counts as “significant derogatory,” and what you can do to improve your chances of approval.

💡 You’ll learn:

• What FHA considers a “disputed account”

• When disputed accounts must be resolved or removed

• The $1,000 threshold rule for disputed derogatory accounts

• Exceptions for medical collections and identity theft

• How to fix credit report disputes before underwriting

FHA Loans & Disputed Accounts: What You Must Know to Avoid Denial

Updated: 2025 | By Joel Lobb, Kentucky Mortgage Loan Officer

📖 Reading Time: 5 minutes

Quick Answer: If you dispute a negative account, it won't automatically disappear from FHA underwriting. Disputed accounts—especially derogatory ones—can derail your mortgage approval. The good news? Understanding FHA's dispute rules puts you back in control.

Introduction

Here's a hard truth that catches many Kentucky homebuyers off guard: if you dispute a negative account, it won't automatically disappear from FHA underwriting. In fact, disputed accounts—especially derogatory ones—can derail your mortgage approval entirely.

I've worked with over 1,300 Kentucky families, and I've seen this exact issue cost borrowers thousands in delays or forced them to start their application over. The good news? Understanding FHA's dispute rules puts you back in control.

In this guide, you'll learn:

• How FHA actually treats disputed accounts (it's different than you think)
• The critical $1,000 threshold that triggers manual review
• Which disputes don't count against you
• Exactly what to do before you apply

What Counts as a Disputed Derogatory Account?

FHA defines disputed derogatory accounts as negative items on your credit report that you're actively disputing. These typically include:

• Collections accounts (unpaid debts sold to collection agencies)
• Charge-offs (accounts creditors wrote off as uncollectible)
• Recent late payments (30+ days late in the last 24 months)

Accounts That DON'T Count (Good News!)

Not all disputed accounts hurt your FHA approval. These are safe:

• Medical collections (always excluded, even if disputed)
• Zero-balance accounts (paid off or settled)
• Non-derogatory disputes (minor errors on good accounts)

Why this matters: FHA underwriters want to see your real financial picture. An inflated credit score that hides payment problems is a red flag for mortgage default risk.

The Critical $1,000 Threshold: FHA's Non-Negotiable Rule

Here's where many borrowers get caught off guard.

If your total disputed derogatory (non-medical) accounts add up to $1,000 or more, FHA requires manual underwriting. This means:

• Your loan won't auto-approve through DU or LPA (Fannie Mae's automated systems)
• A human underwriter will review your entire file
• You'll need documentation proving disputes are valid

Even if an automated system gives you a conditional approval, this rule overrides it.

Example: You have a $600 collection dispute and a $500 charge-off dispute. That's $1,100 total—you've crossed the threshold and triggered manual underwriting, regardless of your credit score.

Disputed Accounts: What FHA Actually Allows

Let's break down the real rules (not assumptions):

Scenario	FHA Rule	What You Should Do
Medical collection disputes	Exempt—don't count	Keep as-is, no action needed
Collections or charge-offs < $1,000 total	No manual underwriting required	Proceed with application
Collections or charge-offs ≥ $1,000 total	Manual underwriting required	Remove or resolve disputes before applying
Identity theft disputes	Can be excluded with documentation	Provide police report or FTC affidavit
Disputes older than 24 months	May not count toward threshold	Discuss with your loan officer
Zero-balance or settled accounts	No action required	Apply normally
Current accounts (never late)	Not derogatory—exempt	No impact on approval

How to Protect Your FHA Approval: Step-by-Step

1Pull All Three Credit Reports

Request free reports from annualcreditreport.com (the only official site). Equifax, Experian, and TransUnion often show different information.

2Identify Disputed Accounts & Calculate Total Balance

List every account you've disputed, note the balance, and add them up. Be honest—include everything marked as disputed.

3Calculate Your Disputed Derogatory Total

Add up only the non-medical collections and charge-offs. If the total is under $1,000, you're in safer territory. If it's $1,000+, plan ahead.

4Make Your Decision

• Under $1,000: You can likely move forward with your application
• $1,000+: Consider removing or resolving disputes before applying

5If You Need to Remove Disputes

Contact each credit bureau directly and request to retract or withdraw your dispute. This removes the "dispute" notation from your report.

Important: Your credit score will likely drop after removing disputes (typically 20-50 points). This is temporary, but it's real. Your loan officer can discuss the impact before you proceed.

6Re-Pull Your Credit Report

Wait 30-45 days, then pull a fresh report to confirm disputes are removed and your score has stabilized.

7Work With Your Loan Officer

Bring your updated credit reports and provide a brief written explanation of any disputes you removed. A knowledgeable FHA loan officer will guide you through the rest.

Common Mistakes That Cost Borrowers

I've seen these happen repeatedly—don't let them happen to you:

Mistake #1: Removing Disputes Without Professional Guidance

Your credit score will drop. If you remove disputes without understanding the impact on your loan approval, you could disqualify yourself unnecessarily. Always consult your loan officer first.

Mistake #2: Confusing "Paid Off" With "Resolved for FHA"

Paying off or settling a disputed account doesn't automatically remove the dispute notation. You still need to formally withdraw the dispute with the credit bureau.

Mistake #3: Thinking Medical Disputes Must Be Removed

Medical collections are exempt from FHA's $1,000 rule. Leave them alone—there's no benefit to removing them, and it just wastes your time.

Mistake #4: Underestimating Lender Overlays

Some lenders have stricter requirements than FHA itself. Before you apply, ask your loan officer about their specific dispute policy. What FHA allows, your lender might not.

Mistake #5: Applying Too Soon After Removing Disputes

Give your credit report time to update (30-45 days minimum). Applying immediately after removing disputes looks suspicious to underwriters.

Frequently Asked Questions

Q: Can I keep medical collections on my credit report?

A: Yes. FHA always excludes medical collections from the $1,000 threshold, even if disputed.

Q: What happens if I cross the $1,000 threshold?

A: Manual underwriting is required. This isn't a denial—it just means a human reviews your file instead of an automated system.

Q: Do I have to pay off all negative accounts to get FHA approved?

A: No. FHA doesn't require you to pay off old debt. You just need to manage disputes properly.

Q: I'm an identity theft victim—can I still get approved?

A: Yes. Provide documentation (police report, FTC affidavit) and FHA will exclude those accounts.

Q: Will my credit score drop if I remove disputes?

A: Likely yes (20-50 points typically). But your FHA approval odds improve significantly.

Q: Does this $1,000 rule apply to pre-approval?

A: Yes. Pre-approval depends on clean credit reporting, just like final approval.

Why This Matters for Kentucky Homebuyers

As a Kentucky mortgage professional with over 20 years of experience, I've guided more than 1,300 families through situations exactly like this. Disputed accounts are one of the top reasons first-time buyers face unexpected delays or denials.

The difference between success and frustration often comes down to knowing these rules before you apply—not after.

Ready to Protect Your FHA Approval?

Don't let disputed accounts derail your homeownership dreams. I'm here to guide you through every step with personalized attention and expert knowledge of Kentucky's FHA programs.

Schedule your free FHA consultation today!

Next Steps

Here's what I recommend:

1. Pull your credit reports this week and identify any disputed accounts
2. Calculate your disputed derogatory total to understand where you stand
3. Schedule a free consultation with an experienced FHA loan officer to review your specific situation
4. Apply for pre-approval once disputes are addressed

Contact Me Today

📧 Email: kentuckyloan@gmail.com

📞 Call/Text: 502-905-3708

I offer free mortgage applications with same-day approvals to keep your process moving quickly. With personalized attention and expert knowledge of Kentucky's housing market, I'll help you achieve your homeownership dreams.

About the Author

Joel Lobb is a Kentucky-licensed Mortgage Loan Officer with over 20 years of experience helping first-time homebuyers and refinance clients navigate FHA, VA, USDA, and KHC programs.

Credentials: NMLS Personal ID: 57916 | Company NMLS ID: 1738461 | View NMLS Consumer Access

Equal Housing Lender

Disclaimer: This website is not endorsed by the FHA, VA, USDA, or any government agency. It is an independent platform created to educate and assist Kentucky homebuyers with expert advice and accessible tools. For official FHA guidelines, visit fha.gov.

Equal Housing Lender

Kentucky Mortgage Approval Underwriting Myths Debunked for FHA, VA, USDA and Fannie Mae

 Mortgage Approval Underwriting Myths Debunked

Getting approved for a loan is not as hard as some make it. The 3C approach breaks it down in its simplest form so no need to overthink or complicate with “what if’s” or variable situations and these factors are the same in every state. They all have to line up for your loan to be approved but here there are in order of significance

Capacity

- No matter if your credit is in 800’s the ability to afford a loan (capacity aka DTI) is the MOST important C and why most applications either get denied or reduced. Income is EVERYTHING.

To get a conforming (FHA / VA / Conventional) loan you need 2yrs of verifiable Full time income even if it’s pieced together with different employers with 2yrs W2’s and your most recent paystub if you’re an employee and OT and/or bonus cannot be used if you’ve been with your employer for less than 2yrs.

If you have part time employment as well that income cannot be used unless you’ve worked both jobs for at least 2yrs UNLESS your P/T job is the exact same as your F/T job and your hours are not variable then in most cases you can get an exception if you’ve been there for at least 1yr. If you’re self employed 2 most recent tax returns with positive income on line 31 of your schedule C.

If homeownership is your goal, then don’t be cheap and have a certified tax preparer prepare your taxes because it’s likely you’ll need certain docs to get approved only they can provide. Also DO NOT write off all your income to avoid paying the IRS taxes because this will disqualify you from a loan and you’ll have to get a more expensive loan with a bigger down payment.

Credit - 
 

many people think this is the most important but it’s not but it is important. With a high enough capacity (low DTI) I’ve seen clients with minimum scores get approved. FHA requires 580, VA does not have a minimum score requirement and while some lenders can do down in the 500’s generally most lenders do not go below 580, and conventional requires 620.

Having said all that just because you meet the minimum score does not mean you’ll get an approval before credit profile (positive tradeline history, collection activity, credit usage) is what matters most. I’ve seen applicants with 680+ get denied for conventional loans because they have a poor credit profile or low capacity (higher DTI).

FHA is a little more forgiving which is why they are easier loans to get than conventional. Obviously the higher the score, the better the chances are for approval but high scores aren’t needed if capacity and collateral are strong.

Collateral - aka down payment.

 

Underwriters request either 1 bank statement for FHA or 2 bank statements for conventional and all they are looking for is verification of cash to close, large deposit (FHA more than 1% of loan amount deposited in 1 deposit) activity and reserves if needed, not spending habits. Large purchases are irrelevant and NSF’s can be explained with an explanation letter. The higher the down payment in percentages (3.5 or 5%, 10%, 15%, 20% etc…) not dollars ($2000 or $5000 more than required) then the lower the risk and higher chance of approval especially for conventional loans. Plus dollars don’t noticeably reduce your monthly payment but percentages do.

Overlays - 

 

additional restrictions some lenders have in addition to standard mortgage guidelines. If your lender is telling you anything more is required than what’s posted above it’s because they have overlays which make it more difficult to get approved with them.
Example - Veteran’s United will not take credit scores under 620 = OVERLAY

 

 

 

If you want a personalized answer for your unique situation call, text, or email me or visit my website below:

Joel Lobb 

 Email - kentuckyloan@gmail.com 

 Call/Text - 502-905-3708

 www.mylouisvillekentuckymortgage.com
 911 Barret Ave., Louisville, KY 40204

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Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

Kentucky Mortgage Loan Expert For Kentucky FHA, VA, USDA, Fannie Mae and KHC Down payment Assistance Loans

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How to Qualify For a Kentucky FHA Mortgage Loan

General Kentucky FHA loan requirements include:

• The loan must be for a property used for your primary residence.
• The property must be appraised by an FHA-approved appraiser.
• The property must be safe, sound and secure, in compliance with minimum property standards as defined by the U.S. Department of Housing and Urban Development, or HUD.
• You must have a valid Social Security number and be a legal resident of the U.S.
• You must have a minimum credit score of 580 with a down payment of at least 3.5 percent, or a minimum credit score of 500 with a down payment of at least 10 percent.
• You may not have delinquent federal debt or judgments, or debt associated with past FHA loans.
• You must have steady employment history.
• You must make a down payment of at least 3.5 percent of the purchase price. If the down payment was gifted by a family member, documentation is required.
• You must have a DTI ratio that does not exceed limits.
• Any judgments or collections on the credit report must be resolved or satisfactorily explained.
• Any required waiting period has passed, as follows:

Event	Waiting period	Waiting period with extenuating circumstances (nonrecurring events beyond your control that result in sudden, significant, prolonged reduction in income or a catastrophic increase in financial obligations)
Chapter 7 or 11 bankruptcy	Four years	Two years
Chapter 13 bankruptcy	Two years from discharge, or four years from dismissal	Two years
Multiple bankruptcies	Five years if more than one filing in last seven years. Most recent bankruptcy must have been caused by extenuating circumstances.	Three years from most recent discharge or dismissal
Foreclosure	Seven years	Three years, with additional requirements after three years up to seven years: 90 percent maximum loan-to-value purchase, principal residence, limited cash-out refinance
Deed-in-lieu of foreclosure, preforeclosure sale (short-sale), or charge-off of mortgage account	Four years	Two years

Debt-to-Income Ratio Limits for Kentucky FHA Loans

Two DTI ratio figures are calculated when considering an Kentucky FHA mortgage. The front-end DTI ratio is your total monthly housing expense, which includes the mortgage principal and interest, mortgage insurance, homeowners insurance, property taxes and applicable homeowners association fees, divided by your total monthly income. The back-end DTI ratio is your total monthly debt obligation, including housing, minimum credit card payments, auto loans, student loans and any other required monthly debt payment, divided by your total monthly income.

Standard FHA front- and back-end DTI limits are 31 percent and 43 percent, respectively. If you earn $3,500 per month, your front-end DTI cannot exceed $1,085 and the sum of all your monthly debt obligations cannot exceed $1,505.
f
Applications for Kentucky FHA borrowers with lower salaries and higher DTIs are manually underwritten. Manual underwriting means that your lender assigns a person to review your loan application and documents, versus running your information through an automated underwriting system. Manually underwritten FHA loans allow for front- and back-end DTI ratios of up to 40 percent and 50 percent, respectively. To qualify for these higher DTI limits, you will need to meet other requirements.

Joel Lobb 

 Email - kentuckyloan@gmail.com 

 Call/Text - 502-905-3708

 www.mylouisvillekentuckymortgage.com
 911 Barret Ave., Louisville, KY 40204

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Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

Kentucky Mortgage Loan Expert For Kentucky FHA, VA, USDA, Fannie Mae and KHC Down payment Assistance Loans