I have originated over 300 VA Home loans in Kentucky and I know how great they are for Kentucky Families; a home loan with zero down, at a very low 30 year fixed rate with no monthly mortgage insurance. I consider myself a VA Home loan expert from Louisville Kentucky and I would like to assist you in your next VA home loan in Kentucky. I have created a Kentucky VA home mortgage website for information and insights to the VA Home Loan NMLS #57916
Purchase: 100/100 Max LTV/CLTV
Refinance: 100/100 Max LTV/CLTV (VA Cash-Outs greater than 90% have additional guideline requirements)
A minimum of 1 credit score is required. A standard Tri-Merge Credit Report is generally required; however a Mortgage Only Credit Report will also be accepted for IRRRLs ONLY so long as it includes valid FICO scores.
Minimum Credit scores for VA loans (including IRRRLs) are:
- Automated Approval: 580
- Manual Underwriting: 560
Automated Approval: No maximum DTI
Manual Underwriting: Maximum 43% backend DTI
An NOV (Notice of Value) from VA is required.
Maximum Loan Amount
Individual county loan limits may differ. You can find the link to determine loan limits for the subject property county here.
The maximum potential loan amount for a purchase transaction with full entitlement is $1,094,625. Loan amounts up to $1,500,000 are allowed as long as the VA guaranty plus the veteran’s down payment and/or equity equal 25% of the lesser of the sales price or Notice of Value (NOV).
Under certain conditions (see below), Non-IRRRL refinance transactions are allowed up to 100/100 LTV/CLTV. Refinances not meeting these conditions are limited to a maximum 90/90 LTV/CLTV of the property value shown on the CRV or NOV plus the cost of any energy efficient improvements (up to $6,000) plus the VA Funding Fee.
For IRRRLs, Maximum loan amount is the existing VA loan balance plus the following
- Allowable fees and charges, plus
- The cost of energy efficiency improvements, and
- The VA funding fee = .50.
Cash-Out Refinance Loans greater than 90% LTV
VA Cash-Out Refinance loans will now be offered with LTV/CLTV up to 100%. If the LTV or CLTV greater than 90%, the following additional requirements will apply
- The cash-out loan may be paying off a current mortgage loan (VA or otherwise), a second (seasoned or unseasoned), and/or another non-mortgage debt.
- Maximum cash in hand after all payoffs cannot be greater than $50,000
- Minimum FICO 660
- An additional adjustment of -0.5
- The loan must have a DU Approve/Eligible (No manual underwrites allowed)
A minimum of 25% of the loan amount must consist of available guaranty. If less than 25% guaranty is indicated on the Loan Guaranty Certificate (LGC), a calculation worksheet must be enclosed indicating the calculations used to determine the full 25% guaranty.
The maximum guaranty is the lesser of the veteran’s available entitlement or the maximum potential guaranty amount detailed below:
Up to $45,000 50% of the loan amount $45,001 – $56,250 $22,500 $56,251 – $144,000 40% of the loan amount with a maximum of $36,000 $144,001 – $417,000 25% of the loan amount with a maximum of $104,250 $417,001 – $1,500,000 25% of the loan amount with a maximum of $273,656
Note: the maximum guaranty for loan amounts > $417,000 varies depending upon the location of the property.
VA Funding Fees
All IRRRLs have a funding fee of 0.50. For other loans, see the table below
Purchase and Construction Loans Type of Veteran Down Payment Percentage for First-Time Use Percentage for Subsequent Use Regular Military 0 – 4.99%
5 – 9.99%
10% or more
Reserves/National Guard 0 – 4.99%
5 – 9.99%
10% or more
Refinance Loans Type of Veteran Percentage for First-Time Use Percentage for Subsequent Use Regular Military 2.15% 3.30% Reserves/National Guard 2.40% 3.30%
Funding Fee Exemption
A veteran must establish any claim for exemption from the fee with documentation included in the loan file. The following are the only exceptions allowed:
- Veterans receiving VA compensation for service-connected disabilities
- Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay
- Surviving spouses of veterans who died in service or from service-connected disabilities (regardless of whether such surviving spouses are veterans with their own entitlements and whether they are suing their own entitlements on the loan)
- Veterans who are rated by the VA as eligible to receive compensation as a result of pre-discharge disability examination and rating.
VA Student Loans
- Student Loans deferred at least 12 months may still be excluded
- When repayment will begin within the next 12 months, calculate a 5% yearly payment. Then divide that by 12 to get the monthly payment.
- If the reported payment on the credit report is higher than the above calculated payment, the payment on the credit report must be used.
- A lower payment reported on the credit report can only be used if corroborated with an official statement from the student loan servicer(s) confirming the loan terms and payment information. This statement can be no more than 60 days old at the time of VA loan closing.
Credit Report and AUS Fee Requirement
- The combined total of Credit Report Fees and AUS charges cannot exceed $100.
- The only time a Veteran can be charged with both Credit Report Fees and AUS charges is on AUS “Refer” cases.
VA Short Sales
A borrower with a previous Short Sale will now be eligible without the standard waiting period if they meet all of the following
- Borrower was current on all mortgage payments for the prior mortgage during the 12 months prior to the Short Sale
- No 30 day lates on any installment loans during the 12 months prior to the Short Sale.
- No late payments at all within the last 24 months
- 660 FICO
- Loan must receive DU approval
IRRRL QM Requirements
VA IRRRLs must meet the following requirements:
- The loan being refinanced was originated at least 6 months prior to the IRRRL closing date,
- At least 6 payments must have been made on the original loan,
- The borrower has not been more than 30 days late on a payment in the past six months,
- The recoupment period for all allowable fees and charges financed as part of the loan or paid at closing does not exceed 36 months,
- The refinance does not increase the principal balance outstanding on the prior loan, except to the extent of fees and charges allowed by the VA,
- Points and fees do not exceed 3% ,
- regardless of loan amount—this applies even to lower-balance loans,
- Loan must also comply with VA limitations on fees and charges,
- The interest rate on the IRRRL is lower than the interest rate on the loan being refinanced (unless the borrower is refinancing from an adjustable rate loan to a fixed rate loan under VA guidelines),
- The refinance is fully amortizing and there is no balloon payment,
- The loan being refinanced is a loan that VA has already guaranteed, and
- Both the loan being refinanced and the IRRRL meet all other VA requirements.
- New Rural Housing and USDA Property Eligibility guidelines for Kentucky Cities (kentuckyusdaloan.com)
- Kentucky Rural Housing and USDA Property Eligibility Requirement Changes March 27,2013 (kentuckyusdaloan.com)
- FHA: More Expensive Than Expected (mylouisvillekentuckymortgage.com)
- New Rural Housing and USDA Property Eligibility guidelines for Kentucky Cities Bardstown,Burlington,Elizabethtown,Georgetown,Independence,Nicholasville,Shelbyville,Shepherdsville (mylouisvillekentuckymortgage.com)
Mortgage Loan Officer
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. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).