In this blog, we will cover and discuss qualifying for home loan bad credit Kentucky low credit scores. When other states like New York are losing residents due to high taxes and cost of living, Kentucky is flourishing. The state’s economy is stronger than ever. Many people are migrating to Kentucky due to the strong job opportunities, low taxes, low cost of living, and affordable housing. New York and Illinois have one of the highest taxes in the country. Many residents are leaving the state of New York and Illinois for other states like Kentucky. Home prices throughout the state have skyrocketed but prices remain below the national median average. Affordable home prices are luring many people who got priced out of the housing market from high-priced states like California, New York, and Massachusetts.

First-Time Home Buyer With Bad Credit in Kentucky

Many first-time homebuyers with bad credit and/or poor credit are gun shy because they think you need good credit to qualify for a mortgage. This is not true. Homebuyers with bad credit and credit scores down to 500 FICO can qualify for a mortgage for a home purchase in Kentucky. You can qualify for home loan bad credit Kentucky with prior bad credit, unpaid collections, prior bankruptcy and collections, and low credit scores. In the following paragraphs, we will cover and discuss the various mortgage options homebuyers have to qualify for home loan bad credit Kentucky with low credit scores.

Buying a House With Bad Credit in Kentucky

Kentucky has affordable home prices. The average home price in Kentucky is $388,500 which is below the national median average of $453,800. You can get a lot of homes for the money in Kentucky. Kentucky also has very low property taxes and income/sales taxes. Residents of the state are enjoying the lower cost of living. The Kentucky Treasury has a surplus of funds and jobs are ample to welcome new residents. A flood of Illinoisans is fleeing the state to Kentucky. We will discuss qualifying for Home Loan Bad Credit Kentucky With No Lender Overlays in this blog. Gustan Cho Associates are mortgage brokers licensed in 48 states and experts on government, conventional, and non-QM loans in Kentucky. We will go over the various loan programs for Kentucky homebuyers. 

Mortgage Brokers For Bad Credit Score in Kentucky

All lenders mandate borrowers meet agency mortgage guidelines. Each agency (FHA, VA, USDA, Fannie Mae, Freddie Mac) has its own agency mortgage lending requirements. However, lenders can have their own lending requirements that are above and beyond agency guidelines called overlays. Gustan Cho Associates has no lender overlays on government and conventional loans. We just go off agency mortgage guidelines of HUD, VA, USDA, Fannie Mae, and Freddie Mac. Gustan Cho Associates is also experts in non-QM and non-prime mortgages such as no-doc loans, asset-depletion, bank statement loans, 90% LTV Jumbo loans, non-QM jumbo loans, and W2 income only mortgages, and hundreds of other unique niche alternative financing mortgage options.

How Can I Buy a House with Bad Credit in Kentucky?

Due to lender overlays, not all lenders have the same lending requirements on FHA, VA, USDA, and Conventional loans. Just because a borrower does not qualify with one lender does not mean they cannot qualify with a different lender. Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders. For example, most Kentucky mortgage lenders require a 620 credit score on FHA loans even though HUD allows borrowers with credit scores down to 500 FICO eligible. The team at Gustan Cho Associates are experts in being able to do loans other lenders can’t. Gustan Cho Associates has no overlays on FHA, VA, USDA, and Conventional loans. 

Low Credit Score Mortgage Lenders in Kentucky

Over 75% of our borrowers are folks who either got a last-minute mortgage denial or are stressed during the mortgage process due to overlays. We can do VA and FHA loans with credit scores down to 500 FICO in Kentucky. If you are seeking Home Loan Bad Credit Kentucky and need a mortgage broker licensed in 48 states with no overlays, contact us at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, on weekends, and on holidays.

Non-QM Mortgages For Bad Credit in Kentucky

Homebuyers with bad credit can buy a house in Kentucky with bad credit. We can help homebuyers qualify for a mortgage with bad credit in Kentucky with government and/or conventional loans with no lender overlays. We also offer non-QM loans for bad credit and/or no-income documentation for Kentucky borrowers.

Non-QM Loans for Self-Employed Borrowers in Kentucky

There are no income docs or tax returns required on bank statement mortgages for self-employed borrowers. Non-QM jumbo loans allow high-end homebuyers with credit scores down to 550 FICO. Gustan Cho Associates offers non-QM loans one day out of bankruptcy. One of our most popular mortgage programs is no-doc loans, asset-depletion, and stated income mortgages. Gustan Cho Associates has hundreds of non-QM and non-prime mortgage options in Kentucky for owner-occupant homes, second homes, and investment properties.

Getting a Mortgage With Bad Credit in Kentucky

There are multiple mortgage options for homebuyers in Kentucky with bad credit. FHA loans are the easiest and best loan program for first-time homebuyers, borrowers with bad credit, homebuyers with credit scores down to 500 FICO, borrowers with high debt to income ratios, and borrowers with prior credit/income/job issues. HUD, the parent of FHA, has a mission to promote homeownership for homebuyers with little down payment and less than perfect credit. Non-QM loans are great alternative financing options for homebuyers with bad credit, recent late payments, or those who do not meet the waiting period requirements after bankruptcy and/or foreclosure. The huge difference between FHA versus non-QM loans is FHA loans only require a 3.5% down payment versus 20% or higher on non-QM mortgages.

FHA Loans With 580 FICO in Kentucky

Borrowers can qualify for an FHA loan with a 3.5% down payment with a 580 credit score with less than perfect credit and outstanding collections and charged-off accounts. FHA loans are the most popular loan program in Kentucky for borrowers with bad credit and lower credit scores. Gustan Cho Associates has no lender overlays on FHA loans. We can originate and close FHA loans with 500 FICO in Kentucky with no lender overlays. Gustan Cho Associates only goes off the automated findings of the automated underwriting system (AUS) and has zero lender overlays on FHA loans.

Low Credit First Time Home Buyer in Kentucky

College graduates can qualify to purchase their first home without having prior work experience. The years spent as full-time students are used in lieu of the full-time experience required on FHA loans. Homebuyers with no credit scores can qualify for an FHA loan with non-traditional credit tradelines versus traditional credit tradelines. Borrowers with no credit tradelines and no credit scores need to be manually underwritten. Not too many mortgage lenders in Kentucky can do manual underwrites. Gustan Cho Associates are experts in FHA manual underwriting borrowers in Kentucky.

Can You Qualify for an FHA Loan With No Credit Scores?

If you have no credit scores, that is due to not having any traditional credit tradelines. Homebuyers in Kentucky can qualify for an FHA loan without a credit score using non-traditional credit tradelines. Non-traditional credit tradelines are tradelines that do not report to the three credit reporting agencies. Examples of non-traditional credit tradelines include utilities, cell phone carriers, insurance companies, educational payments, cable and internet services, and other creditors that require monthly payments but do not report to the three major credit bureaus. Borrowers need to have been paying on non-traditional credit tradelines for the past 12 months in order to count. 

FHA Manual Underwriting Guidelines in Kentucky

FHA loans are the most popular loan program for homebuyers with bad credit and lower credit scores. Outstanding collections and charged-off accounts do not have to be paid off to qualify for an FHA loan. Making timely payments for the past 12 months is required for borrowers to get an automated underwriting system approval and need compensating factors. If borrowers do not get an automated approval and get a refer/eligible findings, they are eligible for manual underwriting.

Best Kentucky Mortgage Lenders For Manual Underwriting

FHA and VA loans are the only two loan programs that allow manual underwriting. Not all mortgage lenders in Kentucky will do manual underwriting. You need timely payments for the past 12 months to be eligible for manual underwriting. One important thing Kentucky homebuyers need to understand is that not all Kentucky mortgage lenders have the same mortgage guidelines on FHA loans. However, many lenders have FHA lending requirements that are higher than the minimum HUD agency mortgage guidelines which are called lender overlays. 

FHA Loans with 500 Credit Scores in Kentucky

FHA loans are the best loan program for borrowers with credit scores down to 500 FICO and prior bad credit. It is very important for borrowers to understand agency mortgage guidelines versus lender overlays on FHA, VA, USDA, and conventional loans. Kentucky mortgage lenders do not have the same mortgage lending requirements as government and conventional loans.

Down Payment For Low Credit Score Home Buyers in Kentucky

FHA loans require a 580 credit score for borrowers to qualify for a 3.5% down payment home purchase FHA loan. However, many homebuyers with 580 credit scores get turned down for an FHA mortgage from Kentucky FHA lenders because they require a 620 or higher credit score requirement. This is because the lender has lender overlays on FHA loans. HUD allows borrowers to qualify for an FHA loan with under 580 and down to a 500 credit score. However, most FHA Kentucky lenders will not accept any borrower with under 580 credit scores. Kentucky FHA lenders can refuse borrowers with under 580 and down to 500 credit scores.

FHA Lenders For Bad Credit in Kentucky

If you have lower credit scores and/or bad credit with a lot of outstanding collections and/or charged-off accounts and high debt to income ratio, it is best that you choose a Kentucky FHA lender that has little to no lender overlays. Before applying for an FHA loan with a lender, ask the loan officer the concerns you have such as the minimum credit score requirements, debt to income ratio caps, overlays on collection accounts, and any other lender overlays that may concern you. FHA loans is the best home loan bad credit Kentucky mortgage program for borrowers with prior bad credit and lower credit scores. 

Kentucky Mortgage Lenders With No Overlays

There are mortgage lenders like Gustan Cho Associates that have no lender overlays. Lender overlays are higher lending requirements than the minimum agency guidelines. As an example, a lender may deny a borrower due to large medical collection accounts. However, HUD guidelines state medical collections can be ignored by lenders. The particular lender can have higher lending guidelines. Lenders have a right to refuse borrowers who do not meet the lender’s higher lending requirements. This is why it is important to understand the basic agency HUD mortgage guidelines on FHA loans because if one lender tells you NO, you can qualify for an FHA loan with a different lender.

Kentucky VA Loan Requirements

Kentucky also has a large concentration of active and retired members of the U.S. Armed Services. A large percentage of our borrowers at Gustan Cho Associates are Kentucky borrowers who are active and/or retired members of the United States Military. Thousands of homebuyers in Kentucky are veterans with qualify for VA loans with a certificate of eligibility (COE). There are no minimum credit score requirements on VA loans. There is no maximum debt to income ratio cap on VA loans as long as the borrower can get an approve/eligible per automated underwriting system (AUS). It is not uncommon for borrowers at Gustan Cho Associates to get approved and closed on VA loans with 500 credit scores and higher than 60% debt to income ratio. The team at Gustan Cho Associates are experts in helping borrowers qualify and approved for VA home loan bad credit Kentucky. 

Best VA Lenders For Low Credit Scores

VA loans are the best loan program in Kentucky. Lenders offer VA loans in Kentucky with 100% financing with no mortgage insurance premium at competitive mortgage rates. The Department of Veterans Affairs does not have a minimum credit score requirement on VA loans. But many lenders have overlays on credit scores and can require a 620 to 640 credit score. Gustan Cho Associates is a licensed mortgage company in Kentucky with zero lender overlays on VA loans. We have zero lender overlays on VA loans. We just go off the automated underwriting findings on VA loans with no additional lender overlays. We have helped thousands of families get approved for VA loans with credit scores down to 500 FICO and over 60% debt-to-income ratios. 

VA Loan Guidelines on Collections

VA loans have very lenient agency mortgage guidelines.  You can have outstanding collections and charged-off accounts without having to pay and qualify for VA loans in Kentucky. Borrowers can qualify for VA loans in Kentucky with bad credit, lower credit scores, outstanding collections, and high debt to income ratios. VA does not have a minimum credit score requirement or a maximum debt to income ratio cap as long as the borrower can get an automated underwriting system approval. The key to getting an AUS approval is to have timely payments in the past 12 months and have sufficient residual income.

VA Debt-To-Income Ratio Guidelines in Kentucky

VA loans are for active and/or retired members of the U.S. Military. Eligible borrowers can qualify for VA home loans bad credit Kentucky with no minimum credit score requirements. Borrowers with 500 credit scores and high debt to income ratio should have several compensating factors. There are many instances when borrowers with approve/eligible per automated underwriting system on VA loans with 500 credit scores and over 60% debt to income ratio will get downgraded to a manual underwrite by the mortgage underwriter. Gustan Cho Associates has helped thousands of veterans with credit scores down to 500 FICO and over 60% debt to income ratio with prior bad credit get approved and closed on VA loans.

What Does Manual Underwriting Mean?

Manual underwriting is when the borrower cannot get an automated underwriting system (AUS) approval and gets a refer/eligible per AUS. On refer/eligible, it means the borrower is eligible but the automated system cannot give an automated approval due to one or several inconsistencies. The AUS is referring to the file to be manually underwritten by a mortgage underwriter. VA and FHA loans are the only two loan programs that allow manual underwriting. Manual underwriting is when a borrower cannot get an approve/eligible per automated underwriting system and gets a refer/eligible per AUS. A human mortgage underwriter will analyze and underwrite the borrower via manual underwriting.

VA Manual Underwriting Guidelines in Kentucky

Not all Kentucky VA lenders will manually underwrite VA loans as part of their lender overlays. There is no major difference between manual underwriting versus automated underwriting systems except there is a maximum cap on debt to income ratio depending on the borrower’s compensating factors. The maximum debt to income caps on manual underwriting is 40% front end and 50% back end with two compensating factors. However, borrowers can exceed the maximum debt to income ratio caps if the mortgage underwriter feels the borrower has strong compensating factors. Mortgage underwriters have a lot of underwriter discretion on manual underwrites.

Home Loan Bad Credit Kentucky With Low Credit Scores Mortgage Approval

There are many folks in high-taxed states like New York, Illinois, and California that want to sell their homes and relocate to lower-taxed states like Kentucky. Many Democrat-run states are seeing a flood of taxpayers and small business owners fleeing their states to lower-taxed states with a lower cost of living, lower property taxes, and affordable housing. This holds true for homeowners with low mortgage balance or no balance with free and clear mortgages. Many just cannot afford the high property taxes, sales taxes, income taxes, and other taxes in their state.

Steps To Buying a House With Bad Credit in Kentucky

First-time homebuyers with bad credit can qualify for a home loan in Kentucky. You do not have to pay outstanding collection and charged-off accounts to qualify for owner-occupant primary residence homes. There are people with bad credit who worry about getting a home loan bad credit Kentucky. Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders.

Home Loan Bad Credit in Kentucky Lenders

Gustan Cho Associates are experts in helping borrowers qualify for home loan bad credit Kentucky. Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on government and conventional loans. Many borrowers may visit their local bank or credit union and are told they do not qualify. Most lenders have overlays. We will discuss what lender overlays are in the following paragraph and why Gustan Cho Associates can help home loan bad credit Kentucky.

Can I Qualify For Mortgage With Charged-Off Accounts In Kentucky?

Borrowers can qualify for Home Loan Bad Credit Kentucky with prior bad credit. They cannot qualify for Home Loan Bad Credit Kentucky with their current bad credit. Gustan Cho Associates does not require borrowers to pay past outstanding collections and charged-off accounts. However, all lenders require timely re-established credit in the past 12 months.

Mortgage Approval with Late Payments in Kentucky?

One or two late payments in the past 12 months are not deal killers if borrowers can get an approve/eligible per the automated underwriting system. Borrowers can qualify for home loans after bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale. However, on government and conventional loans, there is a mandatory waiting period after bankruptcy and/or housing event. The waiting period after bankruptcy and/or housing event depends on the particular loan program. FHA, VA, USDA, and Conventional Loans have their own separate waiting period requirements.

Kentucky Non-QM Loans With No Income Docs

Non-QM loans are alternative mortgage loan programs. Some of the popular non-QM loans are no-doc loans, 12-months bank statement mortgages for self-employed borrowers with no income tax required, traditional 90% LTV jumbo mortgages with no private mortgage insurance required, non-QM mortgages one day out of bankruptcy and foreclosure, asset-depletion, non-QM jumbo mortgages with credit scores down to 500 FICO, and dozens of other specialty and alternative mortgage loan programs.

Non-QM Loans One Day Out of Bankruptcy and Foreclosure in Kentucky

Gustan Cho Associates offers non-QM loans where there is no waiting period after bankruptcy, foreclosure, deed in lieu, or short sale. Gustan Cho Associates are experts in home loan bad credit Kentucky with credit scores down to 500 FICO. Borrowers can qualify for non-QM mortgages one day out of foreclosure. For more information on qualifying for Home Loan Bad Credit Kentucky, please contact us at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.

Applying For a Mortgage With Bad Credit in Kentucky

The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays. We have a national reputation for not having lender overlays on government and conventional loans. We have dozens of wholesale lending partnerships with non-QM lenders and financial institutions. Gustan Cho Associates has a reputation for being a one-stop mortgage shop since we are mortgage bankers, correspondent lenders, and mortgage brokers.