Kentucky First Time Home Buyer Programs For Home Mortgage Loans

Kentucky first-time homebuyer programs

• KHC Regular Down Payment Assistance: Receive a loan of up to $6,000 and repay it over 10 years at a 5.5% interest rate.
• KHC Affordable Down Payment Assistance: If you have a low-to-moderate income, you can get a loan of up to $6,000 and pay it back over 10 years at a 1% rate.
• Conventional Mortgage Loan- 3% down payment credit scores should be at least 680, but preferably 720 or higher with 
• Federal Housing Administration FHA Kentucky mortgage: You can get a down payment of 3.5% with a credit score of at least 580, or get a mortgage with a credit score between 500 and 580 with 10% down using this loan, which is also called an FHA loan. 
• United States Department of Agriculture mortgage Kentucky USDA Mortgage loan: These loans, also called USDA loans, can be useful if you are a low-to-moderate income borrower looking to buy a home in a rural or suburban area.
• Veterans Affairs mortgage Kentucky VA Mortgage : These mortgages, also called VA loans, are for active-service military members or veterans, or spouses of members who have died and can provide lower interest rates than conventional mortgages.

• Am I an active or former member of the armed forces? If not, right away you can remove VA loans from consideration.
• Is my home located in a rural area? People living in more urban and suburban neighborhoods won’t qualify for a USDA loan, so you can scratch that one if that’s the case.
• How much can I afford for a down payment? FHA loans offer plenty of flexibility with their down payment options, but you will need to put up some money up front. That may not be the case with either VA or USDA loans.
• How strong is my credit score? You’ll need a 620 credit score at minimum to qualify for USDA loans. FHA and VA programs tend to be a bit more lenient on credit history.
• Which loan offers the lowest interest rate? All three government loan programs tend to offer lower interest rates than conventional mortgages, but among them, VA might have a slight edge. Mortgage rates constantly fluctuate, no matter what type of home loan you’re considering. So, be sure to take a look at the latest interest rates before making a decision.

Loan types of credit score requirements for First Time Home Buyers in Kentucky

Loans insured by the government, such as VA loans, USDA loans and FHA loans, tend to have more flexible qualification requirements than conventional mortgage loans, which are not government-backed.

To get approved for a mortgage, whether conventional or government-backed, you’ll have to meet your lender’s minimum FICO score for that particular loan type. 

Type of Loan Minimum FICO Score

Conventional 620

KHC Down Payment Assistance 620

FHA 500 with 10% down 580 3.5% down payment

VA no minimum score (depends on the lender)

USDA no minimum score (depends on the lender

Most lenders will require a DTI ratio of less than 45-50 %, but this will depend on the type of loan you’re applying for. 

To determine your DTI, lenders take into account your front-end and back-end DTI.

Front-end DTI

Your front-end ratio consists of your monthly housing expenses divided by your monthly gross income. Housing-related expenses include your future mortgage payment, taxes and mortgage insurance.

Back-end DTI

The back-end DTI is the percentage of your gross income spent on monthly debts.

The items detailed in your credit report often comprise your back-end DTI. This includes monthly obligations such as credit cards, car loans, student loans, child support and personal loans.

Private mortgage insurance (PMI)

When purchasing a property with a conventional loan, some buyers have to factor in private mortgage insurance (PMI).

PMI is generally required for homebuyers who offer less than 20% down and is designed to protect the lender if you default on your loan.

The cost of PMI is rolled into your mortgage payment as an added fee and often accounts for 0.2% to 2% of the mortgage amount. According to Freddie Mac, you can expect to pay between $30 to $70 per month for every $100,000 borrowed.

Once you build your equity to 20% of the property’s appraised value, your loan servicer is required to drop PMI. According to Freddie Mac, PMI will automatically terminate on the date your principal balance reaches 78% of the original appraised value of your home.

Mortgage insurance premiums (MIP)

Government-backed loans don’t have PMI. Instead, you’ll have to factor in mortgage insurance premiums, which are paid both at closing and as part of your monthly payment.

Both FHA and USDA loans require mortgage insurance.

FHA loans require an upfront premium of 1.75% of the loan amount. FHA borrowers also pay an annual premium of 0.45% to 1.05% of the loan amount — unless they put 10% down. Some FHA borrowers can remove MIP, but that will depend on their loan’s origination date.

On the other hand, USDA loans require an upfront mortgage premium of 1% and an annual premium of 0.35%. The drawback of USDA loans is that there’s no way to eliminate your mortgage insurance premium.

If you have a VA loan, the VA guarantee replaces mortgage insurance. However, you’ll still have to pay an upfront funding fee of 1.4% to 3.6% of the loan amount at closing.

If you don’t have the money upfront, VA, FHA and USDA loans allow you to roll the fee into your mortgage, but your loan amount and overall loan cost will increase

Conventional Loans 3%-20%

620

45%

PMI required for down payments of less than 20%. Depends on loan type, credit score and down payment.

KHC Down payment Assistance

      zero down $6k dap assistance in form of second mortgage

620 and above score 

50% maximum debt to income ratio

VA Loans

Not required for down payment

Varies by lender, no minimum credit score

no max debt ratio but residual income is important.

No mortgage insurance but a one-time funding fee (1.25%-3.3% of the loan amount).

FHA Loans

3.5% to 580 credit score and 10% down with a 500 credit score.

56.9% max debt to income ratio but lower required on manual underwrites.

Mortgage insurance required. MIP can be removed after 11 years if you put down 10%.

USDA Loans

No required down payment

no minimum score varies by lender

45%

No mortgage insurance, but a one-time guarantee fee (1% of loan amount) and an annual fee (0.35% of loan amount).

First-Time Home buyers Louisville, KY

Louisville KY:



 First-Time Home buyers Louisville, KY

Even beyond the bourbon, the Kentucky Derby and their famous baseball bats, Louisville is not a bad place to put your feet up at the end of the day. This city is certifiably Southern when it comes to food, drink and hospitality, but Louisville is also inclusive and friendly to LGBTQ residents and visitors, earning a perfect score on the Human Rights Campaign Municipal Equality Index in 2017. In other words, Louisville is more than just your stereotypical Southern city — it’s a cool, thriving and welcoming place to all (which is why they ranked at No. 28 on our Top 100 Best Places to Live list in 2019).  

In addition to an inclusive, amenity-filled environment, Louisville is affordable for first-time buyers. Their HOI is 80.5 according to the NAHB, meaning that most of the city’s housing is affordable to average income families, and the median price of homes sold is $176,300. And to encourage low and middle-income families to invest in the city, Louisville also offers an innovative Down Payment Assistance Program, which offers all buyers (not just first-timers) who are at or below 80% of the area median income with down payment assistance up to 20% of the purchase price. As long as you live in the home for five years and financially contribute $500 to the purchase of the property through the appraisal payment, home inspection or earnest money, you can get some financial help to buy your beautiful Southern dream home.

Senior  Loan Officer
Text/call 502-905-3708

Joel Lobb (NMLS#57916)

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

 kentuckyloan@gmail.com

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#57916 http://www.nmlsconsumeraccess.org/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

Kentucky First Time Home Buyer Loan Programs

Kentucky First Time Home Buyer Loan Programs

What is a First Time Buyer Loan?

Many people dream of owning a home but the home loan process can be confusing for many first time home buyers. Mortgage lenders offer first time buyers with many home loan options and assist the buyer in finding the best home loan for them. First time home buyer programs can offer lower interest rates, low down payments, or reduced taxes.

FHA and VA Loans for First Time Buyers Apply Online

First time homebuyers often experience the most difficulty amounting a significant down payment and everyone should have the opportunity to buy a home. For this reason the Federal government has developed two loan programs to assist homebuyers that have a little or no down payment. These programs are called the Kentucky Federal Housing Administration (FHA) and the Kentucky Veteran’s Administration (VA). These programs are not solely intended for first time home buyers; your home loan advisor will be able to determine if you qualify and if so which program is acceptable for your needs. Kentucky FHA and VA loans can be especially advantageous when combined with a HFA or MCC first time homebuyer program.

Who is Eligible for a First Time Buyer Loan?

Kentucky First time home buyer programs are designed to help borrowers who may not have enough money to pay the full cost of the down payment or the closing costs on a mortgage. These programs make obtaining a mortgage more cost effective. There are even programs specifically for residents of each state. First time home buyer programs are available to those who have not owned a home for the past three years.

Community Home Buyer Programs

Kentucky  Community homebuyer programs reduce the down payment the borrower must pay to 3%, which must be the borrower’s own funds. The closing costs can be gift funds, a grant, or seller assistance up to 3% of sale price. This type of home loan requires the home buyer to take a class on home ownership in their state. Upon completion of the class, the homebuyer will receive a certificate that reduces the cash requirement and expands the qualification ratios. Community homebuyer programs have been making it possible for many people to have the opportunity to buy a home.

What is Escrow?

Escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of an event. In simpler terms, escrow is where the transaction changes hands and prevents the seller from not receiving the money from the sale and prevents the buyer from not receiving the home that was purchased. Escrow is important to both buyers and sellers during the mortgage process.

Mortgage Credit Certificates

A Mortgage Credit Certificate or MCC from KHC -Kentucky Housing Corp is a certificate awarded by your local government agency authorizing the home loan borrower to take certain federal income tax credits. The credits awarded help to free up funds and make the monthly home loan payments more affordable for the homeowner. First time home buyers are typically the candidates eligible for an MCC but in special cases that you may discuss with your home loan advisor this requirement may be waived. Income and purchase price requirements also vary state to state and should be covered in conversations with your home loan representative.

Louisville Ky First Time Buyers Program

 First time buyer programs in Louisville can make securing a Louisville home loan easier and more affordable. Contact us at 502-905-3708 for your Louisville Ky  mortgage to begin your first time buyer loan.

Louisville, Kentucky First Time Home Buyer Programs

1. FHA Loans in Kentucky

I do not have a lot of money for a down payment and have some credit issues in the past. 

Loan Features:

• Great for First Time Home buyers in Kentucky
• Low Down Payment of 3.5% for scores above 620
• Easy Credit Qualifying with lower credit scores 
• 2 years removed from bankruptcy Chapter &
• 3 years removed from  a foreclosure
• Clear Cavirs 
• 2 year work history

KENTUCKY FHA MORTGAGES Government-backed loans with flexible guidelines.500 minimum credit score with 10% down payment3.5% down payment with 580 credit score2 years removed from bankruptcyCan be combined with down payment grants for $0 down payment Max loan $$356,362 in Kentucky 2 year work history with no gaps over 6 months

Learn More

2. USDA Loans in Kentucky

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I live in a rural area and need financing for a home and have no money down in Kentucky for a home loan

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Loan Features:

• Great for those with Low to Moderate Income. 
• Up to 100% Financing
• Flexible Underwriting Guidelines and Credit Qualifications
• Household Income & Property Geographic Limitations Apply

Learn More

KENTUCKY USDA MORTGAGES Government-backed loans with flexible guidelines.Zero Down Payment640 Minimum Credit Score3 years removed from BankruptcyMax Income and Property Map Eligibility Requirements 2 year work history with no gaps over 60 days

3. Conventional Loans in Kentucky

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I am able to make a larger down payment and have a good credit score.

KENTUCKY CONVENTIONAL FIXED RATE MORTGAGES Get your fixed interest rates for eligible buyers.620 minimum credit score3% down payment4-7 years removed from Bankruptcy Depending of if Chapter 7 or 13Max Loan is $548,250 in Kentucky 2 Year work history but does not have to be same job

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Loan Features:

• Great for those with Moderate to High Income
• As Little as 5% Down Payment (only 3% for First-Time Homebuyers)
• 20% Down Payment Removes Mortgage Insurance Premiums
• Flexible Terms

Learn More

4. VA Loans in Kentucky

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I am an active member of the military or a veteran in Kentucky

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Loan Features:

• Designed to Provide Financing to American Veterans
• Up to 100% Financing
• No Monthly Private Mortgage Insurance (PMI)
• No minimum credit score
• 2 years removed from bankruptcy
• 
  

Learn More

KENTUCKY VA MORTGAGES Government-backed loans for those who’ve served our nation. Zero Down Payment LoanNo minimum credit score2 years removed from bankruptcyActive Duty --like to see a least a year left in service or 6 months reserves and a job relatable to your mos. skill

5. FHA Manufactured Home Guidelines for Mobile homes in Kentucky

I want to purchase a manufactured home with land.

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Loan Features:

• Great for First Time Homebuyers
• Low Down Payment
• Easy Credit Qualifying
• Easy Refinancing

Manufactured Housing

KHC requires an Affidavit of Conversion to Real Estate per KRS186A.297, when manufactured home is permanently affixed to land.

The Certificate of Title is surrendered.

If manufactured house has not been converted to real estate, then this can be done at closing.
The following items need to be uploaded in the Closed Loan Package:

A copy of the recorded affidavit and the surrendered title to the manufacture home.
A copy of the executed affidavit and title (to be surrendered) sent to the county clerk for recording.

If a new manufactured home, copy of the original certificate of origin from the manufacturer that is going to be delivered to the county clerk so that title can be ordered.

After title is received, affidavit is prepared for recording and title is surrendered.
Within 90 days or less from closing date, need original of newly recorded affidavit and coy of surrendered title.

Failure to send to KHC within timeframe could result in repurchase.
Affixations are not acceptable.

Do not record affixations with the mortgage.

Manufactured Housing Guidelines for Mobile homes in Kentucky

FHA and VA Loan with Manufactured Homes

Both new and existing manufactured housing is allowed.

FHA requires a foundation inspection by a structural engineer.

RHS Loans with Manufactured Home

KHC only allows new manufactured housing.

Dealer to property and set up like a stick built house.

Conventional Loans with Manufactured Home

Both new and existing manufactured housing is allowed with Conventional Preferred and Preferred Risk programs.

95% LTV / 105% CLTV.

No Structural Engineer inspection required for Conventional Loans

No Closing Costs Mortgage Louisville Kentucky

Zero Closing Costs Mortgage in Louisville Kentucky . Apply Below for your free No Closing Costs Mortgage.

--

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc.

800 Stone Creek Pkwy, Ste 7,

Louisville, KY 40223

 phone: (502) 905-3708

 Fax:     (502) 327-9119

kentuckyloan@gmail.com

 Company ID #1364 | MB73346

http://mylouisvillekentuckymortgage.com 

 

 

Fill out my form here for a free loan pre-approval on a no closing costs mortgage !

Grants for First Time Home Buyers in Kentucky

First Time Home Buyer Grants Kentucky

New Income and Purchase Price Limits

Kentucky Housing Corporation (KHC) is announcing new income and purchase price limits for Secondary Market products and KHC's Homebuyer Tax Credit. Things to know:

• New limits begin with new reservations on or after May 1, 2021.
• Most county income limits decreased, with a few exceptions. Be sure to check the income limits for the counties you serve.

For Secondary Market products, the purchase price will increase to $346,644. For the Homebuyer Tax Credit, the purchase price will increase to $311,997. KHC's program guides on AllRegs will be updated Saturday, May 1, 2021.

 

Refer to Down Payment Assistance Programs Grid -- PDF

• Only homebuyers receiving a first mortgage through KHC are eligible for DAP.
• All DAP loans take a lien position.
  • Show as subordinate financing in AUS.
  • KHC DAPs are not gifts or grants.
• Regular and Affordable DAP are continuously funded and do not run out of monies.
  • Borrowers under the Secondary Market income and purchase price limits are eligible for Regular DAP. Refer to Secondary Market Gross Annual Applicant’s Income Limit Grid -- PDF
  • For borrowers to qualify for the Affordable DAP, they must be under the Affordable DAP income limits. Refer to Affordable DAP Gross Annual Applicant’s Income Limit Grid -- PDF
• KHC will only subordinate a DAP when the first mortgage is coming back through KHC. Refer to KHC’s Subordination Request Form -- PDF

Lender can also refer to the DAP Quick Reference Card – PDF for more information.

 

Conventional

Refer to Conventional First Mortgage Programs Grid – PDF

Mortgage Insurance with Conventional Preferred Program

• Charter coverage with HFA Preferred Program.
• Standard Coverage with Preferred Plus 80.
• KHC will order all MI certificates for TPO Lenders
  • TPO Lenders can choose the MI company when making a loan reservation.
• Delegated/Correspondent Lender will order their own MI certificates.
  • Provide final MI certificate.
• Listed below are the MI Companies and the portal names to access the conventional Preferred program.
  • Arch MI.
  • Essent.
  • Genworth: Simply Underwrite.
  • MGIC: MGIC Go.
  • Radian: One Underwrite.
  • UG.
• Borrower must meet both KHC and MI company guidelines.
• Lender has the option of a Single Pay Upfront option.
  • Paid by the borrower or the lender.
• Mortgage insurance on HFA Preferred and Preferred Plus 80 with Manufactured Housing.
  • MGIC and Genworth allow 95% LTV / 105%CLTV.
  • ARCH, UG and Radian allow 95% LTV / 95%CLTV.
  • Essent is not insuring Manufactured Housing.

Lender can also refer to the First Mortgage Program Quick Reference Card – PDF for more information.

Delegated/Correspondent Lenders Conventional Fannie Mae Requirements

• Lender must comply with all Fannie Mae requirements for origination, processing, underwriting, pre-funding review, closing and post-closing.
• Any significant pre-funding findings must be reported to KHC within 30 days.
• KHC will purchase a High Price Mortgage Loan (HPML).
• Lender will verify employment on all borrowers within 10 business days prior to the note date.
• Lender will upload appraisal to the Uniform Collateral Data Portal (UCDP) system.
• Lender will complete the submission to Uniform Closing Dataset (UCD) and proved a copy of successful UCD Findings Report in the Closed Loan File uploaded to KHC for loan purchase.

TPO Lenders Conventional Fannie Mae Requirements

• Lender will verify employment on all borrowers within 10 business days prior to the note date.
• KHC will upload appraisal to the Uniform Collateral Data Portal (UCDP) system and complete the submission to Uniform Closing Dataset (UCD).

Government

Refer to Government First Mortgage Programs Grid-- PDF

Refer to FHA Refinance Programs Grid -- PDF

Refer to RHS Streamlined-Assist Refinance Program Grid—PDF

Refer to VA Programs Grid - PDF

Eligibility

• Must be a U.S. citizen or have legal status to be in the U.S. Refer to specific agency guidelines.
• KHC does not allow non-occupying co-borrowers or co-signors.
• Applicant’s gross annual income must be at or below Secondary Market Income Limits (compliance income) per county location of the property.
  • Refer to Secondary Market Gross Annual Applicant’s Income Limit Grid – PDF

Compliance Income Limits

• Compliance income is the gross annual income with the sum of the total anticipated income from all sources received by the applicant(s) during the 12-month period commencing with the date of initial occupancy (closing).
• The following should be counted in compliance income: Base pay, overtime, bonuses, commission, child support/alimony, profit sharing, tip income, non-taxable income (SSI, Disability), car allowances, and schedule C or E income.
• Non-borrowing occupant’s income is not considered in compliance income.
• Use KHC’s Income Calculator on KHC’s website (under Lender Resource /Calculator tab) to determine compliance income.
  • This calculator is required on all loan submissions.

Effective Income

• Effective Income is qualifying income. This includes income from the applicant(s) that is considered stable (continuing for at least three years) and is used to calculate debt ratios.

 

Insuring Agency Credit Standards

• KHC follows the federal insuring agency guidelines. KHC requires all lenders to comply with the general Ability-To-Repay (ATR) standards and consider DTI in making reasonable, good faith determinations that the consumer has the ability to repay the loan. KHC has specific credit standards and maximum ratio requirements listed down below.

Minimum Credit Score

• 620 minimum credit score required on all government first mortgage programs (FHA, VA, and RHS).
• 660 minimum credit score required on Conventional HFA Preferred first mortgage programs.

Automated Underwriting System (AUS)

• FHA accepts AUS Approval through Desktop Underwriter (DU) and Loan Prospector (LP) or a manual underwrite per HUD guidelines.
  • Manual Underwriting still requires a minimum 620 credit score and a VOR or LOE regarding not paying rent.
  • Refer to the KHC’s FHA Manual Underwrite Matrix - PDF
• VA accepts an AUS Approval thru Desktop Underwriter (DU) and Loan Prospector (LP) or a manual underwrite per VA guidelines.
• RHS allows for a manual underwrite if lender is unable to get and AUS approval through Government Underwriting System (GUS).
  • 29/41% maximum debt ratios for manual underwriting without GUS approval for RHS.
• Conventional HFA Preferred and Preferred Plus 80 programs require a DU approve/eligible.
  • LP is not accepted on these conventional programs.
• FHA Rate Term Refinance requires an AUS approval (DU or LP).
• FHA Streamline and Simple Refinance – do not run AUS.
• RHS Streamlined-Assist Refinance Program – do not run GUS.
• For all KHC’s DAPs, the second mortgage amount is shown as subordinate financing.

Maximum Debt Ratios

• All loan programs can go up to 40/50% with AUS approval.
• Judgements, collections, bankruptcy, charge-offs, short sales, and foreclosures follow insuring agency guidelines.

Age of Credit Documents

• Maximum age for government first mortgage credit documentation is 120 days.
• Maximum age for conventional first mortgage credit documentation is 4 months.

IRS Form 4506-T

• Required to be executed by the borrower at the time of application or closing.