Saturday, February 17, 2018

Kentucky First Time Home Buyer, 1st Time Home Buyer Loan Programs in KY, Grants, Mortgages

5 Kentucky First Time Home Buyer, 1st Time Home Buyer Loan Programs in KY, Grants, Mortgages

Louisville Ky First Time Home Buyer Loan

1. Louisville KY FHA Loan Program-

This program allows for 3.5% down payment and low 30  30 year fixed rate loans currently. The minimum credit score for a Louisville KY FHA loan with us is . You have three scores, and we take the middle credit score.
The down payment can be saved or gifted from a family member, or borrowed from a 401k loan . The 3.5% down payment cannot be borrowed from a lending institution or off a credit card.
The current debt to income ratios for a Louisville KY FHA loan is 31% and 55 This means  that your current house payment, with taxes and insurance included, cannot be more than 31% of your gross monthly income. The 55means the new house payment and total debts on credit report along with child support or 401k loans.
For example if you made 4k gross a month, the maximum house payment would be $1240 piti, and the maximum total bills outstanding each month, including new house payment would be $1720.00
There are some compensating factors that will allow for a higher house payment if you have  good credit scores (740 score or higher) and a large down payment. (more than the minimum 3.5% down payment)
If you have had a bankruptcy or foreclosure in the past, you will have to need be out of the  bankruptcy for at least 2 years with good reestablished credit and a foreclosure must be 3 years from the when the masters commissioners deed was filed at courthouse.
2. Fannie Mae Loan Program

-This requires 5% down, and it must be from your own saved funds, no gifted funds from family members. The 30 year fixed rate is a little higher than the FHA loan, but the mortgage insurance is much cheaper. If you have a credit score of 740 or higher, and can put down the 5%, this is better program for you due to lower monthly payments and less upfront and monthly mortgage insurance.
Most lenders will want a 620edit score, with less than 20% down, and the seasoning for foreclosures and bankruptcies are much tougher than the FHA loan program.
Fannie Mae will require 5 years or more on a foreclosure, and 4 years on a bankruptcy.
The debt to income ratios are a little tougher too, with them being at 35% and 45% respectively.
3. Louisville Kentucky VA Loan Program 

-This requires no down payment, but you must be a qualified veteran or active duty military to participate in the program. The current minimum credit score is 580  no bankruptcies or foreclosures in the last 2 years.
The maximum debt to income ratio is usually set at 41%, but can go higher with compensating factors, such as over 740 credit score, large down payment, or high residual income. The residual income is set by each region, and you can clink the link below for more info about this .

4. Kentucky USDA and Rural Housing Loans. 

A Kentucky USDA Guaranteed Loan is a Government Insured 100% Purchase Loan. These loans are only offered in rural areas.
Why choose a Kentucky USDA Mortgage?

640 credit score usually required for approval
  • USDA Loans require no down payment.There are no prepayment penalties for USDA Rural Home Loans.A USDA Rural Development Loan has low monthly mortgage insurance.A USDA Rural Development Mortgage is available all rural areas of the country, provided a market exists for the property and the home meets HUD’s minimum property standards.A USDA Rural Housing Loan can be used to purchase a new or existing one family home in rural areas.USDA RD Loans are offered at terms of 30 years with a fixed interest rate.

5. Kentucky Housing Corp or KHC 

KHC is used for mostly applicants in urban areas of Kentucky that don't have access to USDA or other government agencies to buy a home with no down payment.
Down Payment Assistance for Ky First Time Home Buyer, 100% Financing
620 Credit score required. 

You cannot have an owed a home in the last 3 years to use KHC down payment assistance to buy a home with zero down. 

In the State of Kentucky, there are mortgage loans available for First Time Home Buyers to purchase a home with no down payment. KHC or KY Housing classifies a first time home buyer as someone that has not owned a home in the last 3 years. 

There are two different types of Down Payment Assistance thru KHC that are outlined below:

Regular DAP

  • Purchase price up to $243,000.
  • Assistance in the form of a loan up to $6,000 in $100 increments.
  • Repayable over a ten-year term at 5.50 percent.  A DAP of $6,000 over ten years at 5.50 percent interest would equal a payment of $65.12.
  • Available to all KHC first-mortgage loan recipients.


  • Purchase price up to $243,000.
  • Assistance up to $4,500
  • Repayable over a ten-year term at 1.00 percent. 
  • Borrowers must meet Affordable DAP Household Income Limits.

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only.  The posted information does not guarantee approval, nor does it comprise full underwriting guidelines.  This does not represent being part of a government agency.