Showing posts with label FHA. Show all posts
Showing posts with label FHA. Show all posts

Kentucky FHA Mortgage Loans 2026 | FHA Lender Requirements for First-Time Buyers

Kentucky FHA loan limits for 2026: county coverage, requirements, and FHA vs conventional

FHA loan limits set the maximum mortgage amount the Federal Housing Administration will insure. These limits directly affect how much Kentucky homebuyers can borrow using FHA financing and help set realistic expectations when purchasing a home.

For 2026, the Department of Housing and Urban Development increased FHA loan limits nationwide due to continued home price appreciation. The new limits apply to FHA case numbers assigned on or after January 1, 2026.

2026 FHA loan limits in Kentucky (all counties)

All 120 Kentucky counties fall under the standard FHA floor limits for 2026. There are no high-cost county exceptions in Kentucky.

  • 1-unit (single-family): $541,287
  • 2-unit: $693,050
  • 3-unit: $837,700
  • 4-unit: $1,041,125

These limits apply to FHA purchase and refinance transactions when FHA credit, income, and underwriting requirements are met.

Kentucky FHA loan limits by county (2026)

Every Kentucky county listed below uses the same FHA loan limits for 2026:

Adair, Allen, Anderson, Ballard, Barren, Bath, Bell, Boone, Bourbon, Boyd, Boyle, Bracken, Breathitt, Breckinridge, Bullitt, Butler, Caldwell, Calloway, Campbell, Carlisle, Carroll, Carter, Casey, Christian, Clark, Clay, Clinton, Crittenden, Cumberland, Daviess, Edmonson, Elliott, Estill, Fayette, Fleming, Floyd, Franklin, Fulton, Gallatin, Garrard, Grant, Graves, Grayson, Green, Greenup, Hancock, Hardin, Harlan, Harrison, Hart, Henderson, Henry, Hickman, Hopkins, Jackson, Jefferson, Jessamine, Johnson, Kenton, Knott, Knox, Larue, Laurel, Lawrence, Lee, Leslie, Letcher, Lewis, Lincoln, Livingston, Logan, Lyon, McCracken, McCreary, McLean, Madison, Magoffin, Marion, Marshall, Martin, Mason, Meade, Menifee, Mercer, Metcalfe, Monroe, Montgomery, Morgan, Muhlenberg, Nelson, Nicholas, Ohio, Oldham, Owen, Owsley, Pendleton, Perry, Pike, Powell, Pulaski, Robertson, Rockcastle, Rowan, Russell, Scott, Shelby, Simpson, Spencer, Taylor, Todd, Trigg, Trimble, Union, Warren, Washington, Wayne, Webster, Whitley, Wolfe, Woodford

Kentucky FHA loan requirements for 2026

Credit score

Most Kentucky FHA lenders require a minimum credit score of 580 to qualify for the 3.5% down payment option. Borrowers with scores between 500 and 579 may qualify with a 10% down payment, subject to lender overlays.

Down payment

The minimum down payment is 3.5% with qualifying credit. Funds may come from savings, documented gifts, retirement accounts (with restrictions), or Kentucky down payment assistance programs.

Debt-to-income ratio

FHA guidelines typically allow up to 31% housing DTI and 43% total DTI. With strong compensating factors, approvals up to 45.99 on front end ratio and 56.9% DTI may be possible on the backend ratio.

Income and employment

Borrowers must show a two-year employment history with verifiable income. Self-employed borrowers generally need two years of tax returns.

Property requirements

The home must be owner-occupied and meet FHA minimum property standards. Eligible properties include single-family homes, FHA-approved condominiums, townhomes, and 2- to 4-unit properties where the borrower occupies one unit.

FHA mortgage insurance (MIP)

Upfront mortgage insurance premium

FHA charges an upfront mortgage insurance premium of 1.75% of the loan amount, typically financed into the loan.

Annual mortgage insurance premium

Annual FHA mortgage insurance is paid monthly and is commonly 0.55% for borrowers putting down 3.5%. FHA mortgage insurance generally remains for the life of the loan unless refinanced.

FHA vs conventional loan limits in 2026

  • FHA loan limit in Kentucky (1-unit): $541,287
  • Conventional conforming loan limit (baseline): $832,750

FHA loans are often chosen for lower down payment needs and more flexible credit standards. Conventional loans may offer higher loan limits and cancellable PMI for borrowers with stronger credit profiles.

2026 mortgage loan limits for Kentucky (conventional, FHA, VA, USDA)

Mortgage loan limits affect how much homebuyers in Kentucky can borrow using different loan programs. These limits are set annually by federal agencies and vary by loan type, property type, and county.

For 2026, Kentucky remains a standard-cost state, meaning all 120 counties use the national baseline loan limits with no high-cost county adjustments.

Published December 12, 2025
By Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA

Kentucky loan limits overview for 2026

  • Total counties in Kentucky: 120
  • High-cost counties: None
  • Maximum conforming limit statewide: $832,750

2026 Kentucky baseline loan limits

The table below shows the standard 2026 loan limits that apply to all Kentucky counties.

Loan Type 1 Unit 2 Units 3 Units 4 Units
Conventional $832,750 $1,066,250 $1,288,800 $1,601,750
FHA $541,287 $693,050 $837,700 $1,041,125
VA $832,750* $1,066,250* $1,288,800* $1,601,750*
USDA No loan limit** Not eligible Not eligible Not eligible

* VA loans do not have a formal loan limit for eligible veterans with full entitlement, but these figures align with conforming loan thresholds.
** USDA loans do not have loan limits. USDA eligibility is based on household income limits and property location in designated rural areas.

Important USDA clarification (this matters)

USDA loans are often misunderstood. There is no maximum loan amount set by USDA. Instead, approval is based on:

  • Household income limits (based on county and household size)
  • Debt-to-income ratios
  • Property eligibility in USDA-designated rural areas

Any source listing a fixed USDA loan limit (such as $433,020) is incorrect.

Kentucky mortgage market insight

Kentucky continues to offer affordable housing compared to national averages. The majority of buyers remain well within conforming loan limits, and jumbo loans are uncommon statewide.

For most Kentucky buyers, FHA, VA, USDA, and conventional conforming loans remain the primary financing options in 2026.

How to use Kentucky loan limits

1. Identify your loan program

Each loan type has different rules. FHA limits are lower but allow smaller down payments. Conventional loans offer higher limits for buyers with stronger credit. VA and USDA loans focus more on eligibility than loan size.

2. Match limits to affordability

Loan limits do not equal approval amounts. Income, credit, debts, and monthly payment comfort matter more than the maximum number.

3. Get pre-approved early

A Kentucky-based lender can review your full financial picture and confirm which loan type fits best before you shop for a home.

Kentucky county loan limits

All Kentucky counties use the same 2026 baseline limits:

Adair, Allen, Anderson, Ballard, Barren, Bath, Bell, Boone, Bourbon, Boyd, Boyle, Bracken, Breathitt, Breckinridge, Bullitt, Butler, Caldwell, Calloway, Campbell, Carlisle, Carroll, Carter, Casey, Christian, Clark, Clay, Clinton, Crittenden, Cumberland, Daviess, Edmonson, Elliott, Estill, Fayette, Fleming, Floyd, Franklin, Fulton, Gallatin, Garrard, Grant, Graves, Grayson, Green, Greenup, Hancock, Hardin, Harlan, Harrison, Hart, Henderson, Henry, Hickman, Hopkins, Jackson, Jefferson, Jessamine, Johnson, Kenton, Knott, Knox, Larue, Laurel, Lawrence, Lee, Leslie, Letcher, Lewis, Lincoln, Livingston, Logan, Lyon, McCracken, McCreary, McLean, Madison, Magoffin, Marion, Marshall, Martin, Mason, Meade, Menifee, Mercer, Metcalfe, Monroe, Montgomery, Morgan, Muhlenberg, Nelson, Nicholas, Ohio, Oldham, Owen, Owsley, Pendleton, Perry, Pike, Powell, Pulaski, Robertson, Rockcastle, Rowan, Russell, Scott, Shelby, Simpson, Spencer, Taylor, Todd, Trigg, Trimble, Union, Warren, Washington, Wayne, Webster, Whitley, Wolfe, Woodford

Published by Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA
Helping Kentucky homebuyers navigate loan limits and financing options with clarity.

Helpful Kentucky homebuyer resources

Published by Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA

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Kentucky FHA Job Gap Guidelines Explained

Kentucky FHA Job Gap Guidelines: Qualify With Employment Gaps

Kentucky FHA Job Gap Guidelines: What Borrowers Need to Know

Are you worried that a job change or period of unemployment will disqualify you from getting an FHA loan in Kentucky? You're not alone. Many first-time homebuyers assume that any employment gap means instant rejection. The good news: FHA's rules are far more flexible than most people realize.

This comprehensive guide covers everything Kentucky homebuyers need to know about FHA job gap requirements, employment stability standards, and how to document your income history to qualify for an FHA mortgage.

FHA's Two-Year Employment Requirement: What It Really Means

One of the biggest misconceptions about FHA loans is that you must work for the same employer for two full years. This simply isn't true.

FHA doesn't require employment continuity with a single employer. Instead, mortgage lenders verify your overall employment and income stability over the past 24 months. This means FHA evaluators look at the complete picture of your work history, not just tenure at one job.

When reviewing your employment history, FHA-approved lenders examine:

  • Job changes and transitions between employers
  • Periods of unemployment or gaps in employment
  • Changes in industry, career field, or job title
  • Income patterns, consistency, and growth over time
  • Explanation letters for any breaks in employment

Even minor gaps—sometimes just one month—typically require written explanation from the borrower. This documentation helps lenders understand the context behind employment interruptions and assess your likelihood of continued income.

FHA Job Gaps Longer Than Six Months: How They're Evaluated

A job gap lasting six months or longer does trigger additional FHA scrutiny, but it doesn't automatically disqualify you. FHA guidelines allow your income to be counted for qualifying purposes as long as two key conditions are met:

  • Return to stable employment: You must have been back to work for at least six months in your current position or in a similar line of work
  • Prior work history: You can demonstrate a stable two-year employment history before the gap occurred

The types of employment history that count toward this requirement include:

  • Traditional W-2 employment with previous employers
  • Industry-specific training or apprenticeships
  • Educational programs and vocational certifications
  • Military service (full or part-time)
  • Self-employment in your field

The key principle is demonstrating that you have a consistent pattern of work and income—with a reasonable explanation for the interruption.

Acceptable Reasons for Employment Gaps in FHA Underwriting

FHA underwriters understand that real life happens. The program was created to help working families, including those with imperfect employment histories. FHA permits and accepts employment gaps for the following reasons:

  • Job loss: Layoffs, company closures, or reductions in force
  • Medical hardship: Illness, injury, or recovery requiring time away from work
  • Family leave: Parental leave, childcare responsibilities, or family caregiving
  • Education and training: Pursuit of certifications, degrees, or vocational training
  • Seasonal employment: Natural gaps in seasonal, cyclical, or project-based work
  • Military service: Active duty, reserve service, or transition periods
  • Relocation: Job search during a move to a new geographic area

What matters most is that you can document the reason for the gap and demonstrate that you've returned to stable, ongoing employment. Your current job should show signs of stability and reasonable likelihood of continuation.

How FHA Treats Variable and Irregular Income

Not all income is earned the same way. Certain income sources fluctuate by nature, so FHA requires longer documentation periods to prove they're reliable.

FHA allows lenders to count the following variable income types toward your qualifying income:

  • Overtime pay
  • Bonus compensation
  • Commission-based earnings
  • Part-time employment
  • Seasonal work
  • Freelance or contract income

The requirement: You must show at least 24 months of consistent history with this income type. Alternatively, if you have strong evidence that this income is expected to continue—such as a new employment contract or documented growth trend—lenders may use shorter history periods.

For example, if you earn significant commission income, your lender will review your past two years of tax returns and pay stubs to calculate an average. If the average is stable or increasing, it typically qualifies for your mortgage application.

Self-Employment and FHA Job Gap Rules

Self-employed borrowers face somewhat stricter requirements because business income can be variable and subject to change. Typically, FHA requires a minimum two-year history of self-employment to use business income for qualifying.

However, FHA does allow exceptions if:

  • You previously worked in the same field before becoming self-employed, or
  • You completed formal education, training, or apprenticeship directly related to your business before launching it

When evaluating self-employment income, FHA lenders review:

  • Two years of complete federal tax returns (1040 with Schedule C)
  • Year-to-date profit and loss statements
  • Evidence of business stability and positive cash flow
  • Professional assessment of whether the business will likely continue

Self-employed borrowers should maintain organized business records and be prepared to explain their business model and income projections during the FHA application process.

Does FHA Require Two Years With the Same Employer? No.

This myth persists among homebuyers, but it's simply not true. Let's clear up what FHA actually requires versus common misconceptions:

FHA Does NOT Require:

  • Two consecutive years working for the same employer
  • Two years in the same job title or position
  • Two years of full-time employment only
  • Zero employment gaps or job changes

FHA DOES Require:

  • A verifiable two-year work history (with documented explanations for gaps)
  • Current employment that's stable and likely to continue
  • Demonstrated income stability and consistency
  • Reasonable likelihood that you'll continue earning current income

The focus is on stability and income continuity, not rigid employment tenure. Job changes are normal, and FHA recognizes this. As long as you can explain your employment moves and show stable income, you'll likely qualify.

Kentucky FHA Borrowers: What You Need to Qualify With a Job Gap

If you've experienced job changes, periods of unemployment, or employment transitions, you can still qualify for an FHA loan in Kentucky. Use this checklist to ensure you're prepared:

  • Document every gap: Have a written explanation for any employment interruption, even brief ones
  • Verify your stability: Show that you're currently employed in a stable position
  • Follow the six-month rule: If your gap was longer than six months, ensure you've been back to work for at least six months
  • Build your history: Demonstrate a solid two-year work history prior to any long gap
  • Gather supporting documents: Prepare pay stubs, W-2 forms, offer letters, and employment verification letters

FHA loans exist to help real working people achieve homeownership—not just those with perfect employment records. With proper documentation and stable current employment, employment gaps won't derail your path to homeownership in Kentucky.

Ready to Apply for a Kentucky FHA Mortgage?

If you have employment gaps, job changes, or variable income and want to explore FHA financing, I can provide a personalized review of your situation and qualifying options.

As a mortgage specialist focused on Kentucky first-time homebuyers for over 20 years, I've helped more than 1,300 families qualify for FHA loans—many with complex employment histories. I can guide you through the documentation process and connect you with loan programs designed to fit your specific circumstances.

Contact me today for a free, no-obligation FHA eligibility review:

Joel Lobb

Mortgage Loan Officer – FHA, VA, USDA & KHC Specialist

NMLS Personal ID: 57916 | Company NMLS ID: 1738461

📧 Email: kentuckyloan@gmail.com

📞 Phone/Text: (502) 905-3708

🌐 www.mylouisvillekentuckymortgage.com

Equal Housing Lender | Independent platform providing expert mortgage guidance to Kentucky homebuyers

FHA Job Gap Infographics

FHA's 2-Year Employment Requirement

Understanding the Timeline: What FHA Actually Looks At

24m
Today
Current Employment
12m
12 Months Ago
Job History Review
24m
24 Months Ago
Full 2-Year Period

FHA Reviews: Overall employment stability over 24 months, NOT continuous employment with one employer

The 6-Month Rule for Job Gaps

When Employment Gaps Longer Than 6 Months Apply

6+ Months

Employment Gap

You Can Still Qualify If:

  • Back to work for at least 6 months
  • Current job is stable
  • 2-year history before the gap
  • Can explain the gap reason
  • Reasonable income expectations

Acceptable Reasons for Employment Gaps

FHA Understands Life Happens

📉

Job Loss

Layoffs, company closures, or reduction in force

🏥

Medical Issues

Illness, injury, or recovery time

👶

Family Leave

Parental leave or childcare responsibilities

🎓

Education

Certifications, degrees, or training programs

🌾

Seasonal Work

Cyclical or seasonal employment gaps

🪖

Military Service

Active duty or transition periods

Variable Income Types FHA Accepts

Earn Different Ways? FHA Has You Covered

⏰ Overtime

24-month history

💰 Bonuses

24-month history

📊 Commission

24-month history

🕐 Part-Time

24-month history

🌾 Seasonal

24-month history

💼 Freelance

24-month history

All variable income types require consistent 24-month documentation or strong evidence of continuation

FHA Job Gap Myths vs Reality

Stop Believing These Common Misconceptions

❌ FHA Myths

  • You need 2 years with same employer
  • Any gap disqualifies you
  • You can't have job changes
  • Only full-time work counts
  • Perfect employment history required

✓ FHA Reality

  • 2-year work history (any employers)
  • Gaps OK if documented & explained
  • Job changes are normal & acceptable
  • Part-time & variable income OK
  • Real-world work history accepted

Example: How FHA Views Your Employment History

A Real-World Scenario

24 Months Lookback:
Job 1: 10mo
Gap: 2mo
Job 2: 10mo

✓ FHA Says: "This applicant has solid employment history with a minor gap. The gap is explained, and they're currently stable. APPROVED."

Qualification Checklist for Kentucky FHA Borrowers

Get Ready to Apply

✓ Are You Ready?

  • Documentation: Written explanations for all employment gaps (even brief ones)
  • Stability Proof: Evidence of current stable employment
  • 6-Month Rule: If gap was 6+ months, you've been back to work 6+ months
  • History: Solid 2-year work history before any long gaps
  • Documents: Pay stubs, W-2s, offer letters, verification letters ready
  • Income Calculation: 24-month average for variable income documented
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How much income do I need qualify for Kentucky Home Loan?

DTI Ratio Guide: How Much Income Do You Need for a Mortgage in Kentucky?

Mortgage DTI Ratio Guide: How Much Income Do You Need To Qualify In Kentucky?

A practical Kentucky-focused guide to debt-to-income ratios, front-end and back-end limits, and how FHA, VA, USDA, KHC, and Conventional lenders calculate what you qualify for.

Understanding How Lenders Look At Your Income In Kentucky

When you apply for a mortgage in Kentucky, lenders look past the sales price and interest rate. They want to know how much of your monthly income is already spoken for. That is where your debt-to-income ratio, or DTI, comes in.

Your DTI ratio compares your total monthly debt payments to your gross monthly income. It is one of the biggest drivers of approval, loan amount, and pricing for FHA, VA, USDA, KHC, and Conventional loans.

Key idea: a strong DTI can offset a mid-range credit score, but a weak DTI can kill a file even with great credit.

What Is Debt-To-Income (DTI) And Why It Matters

Debt-to-income ratio is the percentage of your gross monthly income that goes toward required monthly debt payments. Lenders use it to measure whether you can safely take on a new mortgage payment on top of your existing obligations.

Formula:

Total monthly debt payments ÷ gross monthly income × 100 = DTI percentage

Example: if you earn 5,000 per month and have 2,000 in total monthly debt (including the new house payment), your DTI is 40 percent.

Front-End Versus Back-End DTI Ratios

Lenders run two separate DTI tests on every file: the front-end ratio and the back-end ratio.

Front-end ratio (housing ratio)

Measures how much of your gross monthly income goes only to the house payment:

  • Principal
  • Interest
  • Property taxes
  • Homeowners insurance
  • Mortgage insurance, if applicable

For FHA, a typical guideline is around 31 percent of gross income.

Back-end ratio (total DTI)

Measures all required monthly debts including the new house payment:

  • New mortgage payment (PITI)
  • Credit card minimums
  • Auto loans
  • Student loans
  • Child support or alimony
  • Personal loans and 401(k) loans

Utilities, cell phone, car insurance, groceries, and streaming services do not count in DTI.

Most Kentucky lenders want to see a total DTI in the low-to-mid forties. Some programs will stretch higher with strong credit, savings, or residual income.

Typical DTI Guidelines By Loan Program In Kentucky

Exact approval limits come from automated underwriting findings, but these ranges are a realistic working grid for Kentucky files.

Loan program Front-end Back-end Notes
FHA Around 31 percent 43–50 percent with AUS and compensating factors Popular for first-time buyers and mid-range credit scores.
VA No strict front-end; 41 percent used as a guide 41–55 percent depending on residual income Zero down, no monthly mortgage insurance; residual income is critical.
USDA About 29–32 percent Around 41–43 percent Zero down for eligible rural areas; tighter on DTI than FHA.
KHC Around 31–32 percent 43–45 percent depending on program Used with FHA, VA, USDA, or Conventional plus down payment assistance.
Conventional (Fannie/Freddie) Around 28 percent Up to 49.9 percent with strong AUS approval Best pricing for well-qualified borrowers with solid credit.

Automated Findings Versus Manual Underwriting

Most Kentucky loans run through automated underwriting systems such as Desktop Underwriter, Loan Product Advisor, or USDA and VA equivalents. These engines have hard-coded DTI caps that cannot flex.

When a file is strong overall but just outside the automated DTI box, a manual underwriter can sometimes step in and approve the loan by looking at the full picture.

Automated underwriting (AUS)

  • Fast decisions based on credit, DTI, assets, and property data
  • DTI limits are strict; the engine cannot use judgment
  • Ideal for clean, well-qualified files

Manual underwriting

  • Human underwriter reviews the full story
  • Can allow higher DTIs with strong compensating factors
  • Common on FHA, VA, USDA, and some KHC loans

Manual underwriting is often the difference between a denial and an approval for borrowers who are a few points over standard DTI limits but have stable income, cash reserves, or strong payment history.

Residual Income And Disposable Cash Flow

DTI is not the only way to look at risk. Some programs, especially VA, put heavy weight on residual income, which is the money left over after all debts, taxes, and basic living expenses are paid.

Strong residual income can tip a borderline DTI file into an approval because it shows the borrower has room to absorb surprises, repairs, and lifestyle costs beyond the minimum debt obligations.

Kentucky DTI Mortgage Calculator

Use this quick calculator to estimate the maximum monthly mortgage payment you can carry under common Kentucky guidelines. This is a rough planning tool, not a final approval decision.

Include car loans, credit cards, student loans, child support, and other required payments.

Results

Enter your income and debts to estimate how much house payment fits typical DTI rules.

This tool is for educational estimates only and is not a credit decision. Actual approvals follow AUS findings and full underwriting review.

Practical Ways To Improve Your DTI Before You Apply

If your current DTI is on the high side, a few focused moves can open up more approval options and price ranges.

Pay down or eliminate small monthly debts

Target revolving credit cards and small installment loans first. Every 50 to 100 dollars in monthly payment reduction directly lowers your DTI and raises what you qualify for.

Avoid taking on new debt before closing

New car loans, furniture financing, or large credit card purchases right before or during the mortgage process can push your DTI over the limit and cost you the approval.

Consider a co-borrower with income and low debt

A spouse or co-borrower with strong income and minimal monthly obligations can materially improve the combined DTI on the file. Their debts count too, so the profile has to make sense overall.

Look at program fit instead of forcing one product

A file that is tight for Conventional may be completely workable under FHA, VA, USDA, or KHC guidelines. Matching income, credit, and DTI to the right program is where an experienced local loan officer earns their keep.

Real Kentucky Example: 5,000 Monthly Income And 1,000 In Debts

Here is a simple FHA-style scenario for a borrower in Kentucky earning 5,000 per month with 1,000 in monthly debts on the credit report.

Item Calculation Amount
Gross monthly income Stated 5,000
Front-end limit (31 percent) 5,000 × 0.31 1,550
Back-end limit (43 percent) 5,000 × 0.43 2,150
Existing debts Car, cards, student loans 1,000
Back-end room for house payment 2,150 − 1,000 1,150
Estimated maximum PITI payment Lower of 1,550 and 1,150 1,150 per month

Depending on rate, taxes, and insurance, a payment in this range might support a price point somewhere around the high 100s to low 200s in many Kentucky markets. Exact numbers require a full quote.

Want To Know Exactly How Much House You Qualify For In Kentucky?

A quick pre-approval conversation can take the guesswork out of DTI. We can run your income, debts, and credit through multiple Kentucky lenders and programs and show you real numbers instead of rough estimates.

Email

kentuckyloan@gmail.com

Call or text

502-905-3708

Website

MyLouisvilleKentuckyMortgage.com

FHA, VA, USDA, KHC, and Conventional options available. First-time homebuyers welcome.

Joel Lobb • Mortgage Loan Officer • Expert on Kentucky Mortgage Loans

EVO Mortgage • Company NMLS 1738461 • Personal NMLS 57916 • Equal Housing Lender

This content is for educational purposes only and is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, and property acceptance. DTI guidelines and program terms are subject to change.

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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.

Different Types of Kentucky Home Loans

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)

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

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

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

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%

Explore More Kentucky Home Loan Resources

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

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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

Government shutdown effects on 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.

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.

✅ 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.

  • 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.

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.

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