Tag: 2023 Kentucky Mortgage Guideline Changes

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Kentucky FHA loan requirements

Kentucky FHA credit score minimums

• 500, with 10% down
• 580, with as little as 3.5% down

Kentucky FHA down payment minimums

• 3.5% down, a credit score 580 or above. This requires you to pay mortgage insurance premiums for the life of the loan.
• 10%, down, if your credit score is 500 to 580. You must pay mortgage insurance premiums for 11 years.

Kentucky FHA loan limits

FHA loans come with limits, but there’s no standard amount across the country. Instead, the limits vary by county and are adjusted on an annual basis. In 2023, the maximum FHA loan amount you could borrow ranged from $472,030

2023 Kentucky conforming and FHA loan limits are $472,030 for a one unit property

You can find FHA mortgage limits for your area on the U.S. Department of Housing and Urban Development website.

Kentucky Max FHA DTI Debt to Income Ratios maximum

You typically must have a debt-to-income ratio of 56.9% or lower on an Approved Eligible File through AUS  on the Front  back end ratio and the front end debt ratio is usually limited to 45% on the front end.

On FHA manual underwrites, the max debt ratio are as follows:

Qualifying Ratios (%)
Acceptable Compensating Factors
500 – 579 or No Credit Score1
31/43

Borrowers with Minimum
Decision Credit Scores below 580, or with no
credit score may not exceed 31/43 ratios.

580 and Above2
31/43
No compensating factors required. Energy
Efficient Homes may have stretched ratios of
33/45.
580 and Above2
37/47
One of the following:
• Verified and Documented cash Reserves
• Minimal Increase in housing payment
• Significant additional income not reflected
in Effective income
• Residual Income4
580 and Above2 40/40 No discretionary debt
580 and Above2
40/50
Two of the following:
• Verified and documented cash Reserves
• Minimal increase in housing payment
• Significant additional income not reflected
in Effective income

FHA KENTUCKY loan requirements for Job and Income

• Show proof of income and an employment history of at least two years
• Purchase a home that you’ll use as your primary residence
• Get the property appraised by an FHA-approved appraiser and make sure it meets HUD guidelines
• Not have a history of bankruptcy or foreclosure in the past year for Chapter 13 and 2 years removed from Chapter 7 and no foreclosures in last 3 years

KENTUCKY MORTGAGE GUDIELINES FOR BANKRUPTCY, SHORT SALE, FORECLOUSRE, CHAPTER 13 AND CHAPTER 7

FHA costs: mortgage insurance

FHA loans often come with attractive interest rates, as a result of their government guarantee. But you should expect your savings to be at least partially offset by extra costs in the form of mortgage insurance premiums, which are designed to cover costs if you default on the loan.

If your down payment is 10%, you’ll pay these premiums for 11 years. Otherwise, you’ll be stuck paying them until you sell your home or refinance your mortgage.

Here’s what the upfront and annual mortgage insurance premiums typically cost:

• Upfront mortgage insurance premium: 1.75% of your loan amount
• Annual mortgage insurance premiums: 0.45% to 1.05% of your loan amount, depending on your term and other factors