Category: Appraisal VA Loan Kentucky

VA Mortgage Loan Guide for Kentucky


Kentucky VA Mortgage Loan Guide for Home Buyers

To qualify for a VA loan in Kentucky , there are several key requirements and guidelines to consider, based on the information provided:

  • Credit Score :
    While the VA itself does not set a minimum credit score requirement, most lenders in Kentucky typically require a credit score of at least 580–620 for approval. Some lenders may accept scores as low as 580 , but a higher score improves your chances of approval
Bankruptcy
  • Bankruptcy must be discharged 2 years from Chapter 7 and 1 year for a Chapter 13 or if you have been in Chapter 13 for minimum of 12 months with no late pays and bankruptcy trustee allows, you can buy a home using your VA certificate of Eligibility
Inspections
  • VA loans require termite inspections but no home inspections
Work history and debt to income requirements
  • VA does not have a minimum income or maximum income on their loan programs
  • Work history needed for last 2 years. If you are out of military less than 12 months from new mortgage date, you must have a job lined up that typically matches your MOS in order to qualify. No part time or temp to hire jobs unless you have been out of Military for 2 years and working at them for the last two years. No set job time after you get of of military or job gaps as long as you can show stability in your income and previous work history
  • VA disability can be used for income qualifying purposes and can usually be grossed up 125% since non taxable, but for residual net income qualifying purposes you can gross up.
  • VA Residual Net income chart is based on family and location of house.
How many times can and I use the VA loan?
  • You can have more than one VA loan and in fact, if you have enough VA entitlement left on your COE, you can have two VA loans open at the same time. I have done many like this in my career
All VA lenders are not the same. Check around for second opinions.
  • VA lenders all have different sets of rates and will set there on rates and closing costs-Check around. You will be surprised .

VA loans with co-borrower that is not your spouse

  • If you are getting a VA loan and the co-borrower is not married to you, then you have to put down at least 12% down payment. One of those weird VA rules when it comes to non-borrowing spouse.
VA loan residency requirements
  • VA loans are only for primary residences and not to be used for rental homes.
  • You can turn a home that has a VA Mortgage into a rental after 12 months or if you get shipped to a different duty station
  • Typically takes about 30 days to close a VA loan with the home appraisal taking about 10 days from start to finish. It is the most lengthy part of the loan processing and closing process after you get a house under contract.

  • Debt-to-Income Ratio (DTI) :
    Although the VA does not impose a strict DTI cap, lenders generally prefer borrowers to have a debt-to-income ratio of less than 41% to qualify for a VA loan. However, some flexibility may exist depending on other financial factors.

  • Down Payment :
    One of the major benefits of a VA loan is that it requires no down payment in most cases, making homeownership more accessible for eligible borrowers
  • Proof of Income and Employment :
    Borrowers must demonstrate stable income and provide proof of employment. Lenders typically prefer at least two years of steady employment history

  • Certificate of Eligibility (COE) :
    To apply for a VA loan, you must obtain a Certificate of Eligibility (COE) , which verifies your eligibility based on your military service. Veterans will need to provide a DD Form 214 , while active-duty members and National Guard/Reserve members may need different documentation

  • VA Funding Fee :
    A VA funding fee is required at closing unless the borrower qualifies for an exemption (e.g., due to a service-connected disability). The fee amount varies depending on factors such as the type of veteran, down payment amount, and whether it’s the borrower’s first time using the VA loan benefit

  • Property Requirements :
    The property being purchased must meet the VA’s minimum property requirements (MPRs) to ensure it is safe, structurally sound, and habitable. Additionally, VA loans are only available for primary residences

  • Loan Limits :
    While the VA does not impose maximum loan limits, lenders who sell their loans in the secondary market may cap loan amounts. As of January 1, 2025 , the VA loan limit for all counties in Kentucky is $806,500

  • No Private Mortgage Insurance (PMI) :
    Unlike conventional loans, VA loans do not require private mortgage insurance (PMI) , even with no down payment, which can save borrowers significant money over time

By meeting these requirements, eligible veterans, active-duty service members, and surviving spouses can take advantage of the many benefits offered by VA loans in Kentucky

What are the steps to apply for a VA loan in Kentucky?

To apply for a VA loan in Kentucky , you can follow these steps based on the information provided:

1. Determine Your Eligibility

The first step is to confirm that you are eligible for a VA loan. Eligibility is typically extended to veterans, active-duty service members, National Guard/Reserve members, and certain surviving spouses 1. You will need to obtain a Certificate of Eligibility (COE) , which verifies your eligibility based on your military service. Veterans typically need to provide a copy of their DD Form 214 (discharge or separation papers), while active-duty members may need different documentation 8.

2. Apply for Your Certificate of Eligibility (COE)

You can request your COE in one of three ways:

3. Choose a VA-Approved Lender

VA loans are issued by private lenders (banks, credit unions, or mortgage companies) but are guaranteed by the Department of Veterans Affairs. It’s important to select a lender that specializes in VA loans, as they will be familiar with the process and requirements

You can contact VA local lenders in Kentucky

4. Complete the Loan Application

Once you’ve selected a lender, you’ll need to complete a formal loan application. During this process, the lender will assess your financial situation, including your credit score , income , and debt-to-income ratio (DTI) . While the VA doesn’t set a minimum credit score, most lenders prefer a score of at least 580–620

Additionally, lenders generally look for a DTI ratio of less than 41% , though some flexibility may exist depending on other factors if you have a higher residual income, a large down payment, or a lot of reserves or a higher credit score of say over 740

5. Property Appraisal and Underwriting

The lender will order a VA appraisal to ensure the property meets the VA’s minimum property requirements (MPRs) . These requirements ensure the home is safe, structurally sound, and habitable . You may also choose to have a separate home inspection to identify any potential issues with the property

6. Pay the VA Funding Fee (If Applicable)

Most borrowers are required to pay a VA funding fee at closing, unless they qualify for an exemption (e.g., due to a service-connected disability). The fee amount varies depending on factors such as the type of veteran, down payment amount, and whether it’s the borrower’s first time using the VA loan benefit

7. Close on the Loan

Once the appraisal and underwriting processes are complete, you’ll move to the closing stage. At closing, you’ll sign all necessary documents to finalize the loan. Since VA loans do not require a down payment, you won’t need to bring funds for that purpose, but you will need to cover closing costs, which may include the funding fee (if applicable) –Seller can pay up to 4% of the sales price toward buyers closing costs and prepaids and even payoff VA borrower’s debt to qualify. This is the only type of loan that offers seller concessions whereas the seller can pay off buyer’s debts to qualify on debt to income ratio purposes or residual income requirements


1 –  Email – kentuckyloan@gmail.com 

2.   Call/Text – 502-905-3708

Joel Lobb
Mortgage Loan Officer – Expert on Kentucky Mortgage Loans


 

Website: www.mylouisvillekentuckymortgage.com

 Address: 911 Barret Ave., Louisville, KY 40204

Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

Kentucky Local Home Loan Lender Services

 First-Time Home Buyers Welcome
 FHA, Rural Housing (USDA), VA, and Kentucky Housing Corporation (KHC) Loans and Down Payment Assistance
 Conventional Loan Options Available
 Fast Local Decision-Making
 Experienced Guidance Through the Home Buying Process

VA Mortgage Loan Guide for Kentucky (2025–2026)

Kentucky veterans and active-duty service members continue to use the VA home loan program as one of the most powerful financing tools available. This guide is designed to reflect current VA policy, practical lender requirements, and Kentucky market realities, so you are working with accurate information instead of outdated rules or generic national advice.

What Is a VA Mortgage Loan?

A VA mortgage is a home loan backed by the U.S. Department of Veterans Affairs. The VA does not lend money directly. Instead, private lenders fund the loan and the VA guarantees a portion of it. That guarantee allows qualified Kentucky veterans and service members to access more flexible guidelines and better terms than most other loan programs can offer.

Key Benefits of a Kentucky VA Mortgage

  • Zero down payment required for most eligible buyers
  • No monthly private mortgage insurance (PMI)
  • More flexible credit standards than many conventional loans
  • Competitive fixed interest rates
  • Higher allowable debt-to-income ratios when residual income is strong
  • Streamlined refinance options, including IRRRL (Interest Rate Reduction Refinance Loan)
  • Assumable loans, subject to lender approval and buyer qualification

Basic VA Eligibility for Kentucky Borrowers

You may qualify for a VA home loan if you meet one of these service requirements:

  • At least 90 days of active-duty service during wartime, or
  • At least 181 days of active-duty service during peacetime, or
  • At least 6 years in the National Guard or Reserves, or
  • You are an eligible surviving spouse of a veteran who died in service or from a service-connected cause

A Certificate of Eligibility (COE) confirms your entitlement. Most lenders can obtain your COE electronically in a few minutes.

Credit Score Requirements (What Actually Matters)

The VA itself does not publish a minimum credit score requirement. Instead, lenders use their own credit overlays. In Kentucky, many lenders look for a minimum score in the 580 to 620 range, with the best pricing typically starting around 620 and above.

The real focus is on your overall credit profile and recent payment history, not just a single score. A strong record of on-time payments, limited recent derogatory items, and responsible use of credit can offset a lower score in some cases.

Bankruptcy, Foreclosure, and Derogatory Credit

  • Chapter 7 bankruptcy: Generally at least 2 years from discharge
  • Chapter 13 bankruptcy: At least 12 months of on-time plan payments, with trustee approval
  • Foreclosure or short sale: Typically a 2-year waiting period
  • Late payments: Isolated older lates can be acceptable, but recent serious delinquencies may require additional documentation or a manual underwrite

Income, Debt-to-Income, and Residual Income

Many borrowers focus only on debt-to-income ratio (DTI), but VA underwriting heavily emphasizes residual income. Both work together.

Debt-to-Income Ratio (DTI)

There is no hard maximum DTI in the VA program. A 41 percent DTI ratio is a common benchmark, but approvals above that level are allowed when the file is otherwise strong, especially if residual income and credit history are solid.

Residual Income

Residual income is the amount of money left over each month after paying your major obligations, including the new housing payment, taxes, insurance, and recurring debts. VA uses regional residual income tables based on household size. Kentucky is in the South Region.

Strong residual income can help offset higher DTI ratios, limited cash reserves, or a lower credit score, and it is one of the main reasons VA loans have historically low default rates.

Property Requirements for Kentucky VA Loans

Occupancy Rules

  • The property must be used as your primary residence
  • Occupancy is generally required within about 60 days after closing
  • A spouse can often satisfy the occupancy requirement if you are deployed or temporarily away

Eligible Property Types

  • Single-family homes
  • VA-approved condominiums
  • Townhomes
  • Two- to four-unit properties when you live in one of the units
  • Some manufactured homes, if they meet VA and lender guidelines

Pure investment properties, short-term vacation rentals, or homes that you do not plan to occupy as a primary residence are not eligible.

VA Minimum Property Requirements (MPRs)

VA MPRs focus on safety, soundness, and sanitation. Examples include:

  • No major structural issues or unsafe conditions
  • Roof and mechanical systems in acceptable condition
  • Functioning heating, electrical, and plumbing systems
  • No active termites or severe wood-destroying insect damage
  • Safe access to the property and acceptable water and waste disposal
  • Peeling lead-based paint corrected on older homes

Loan Amounts, Down Payment, and Funding Fee

Loan Limits and Entitlement

If you have full VA entitlement, there is no formal VA loan limit. In that situation, the amount you can borrow in Kentucky is mainly driven by your income, debts, and the property value, not a published county loan limit.

If you have partial entitlement because of an existing VA loan or a prior loss, then the standard Federal Housing Finance Agency (FHFA) conforming loan limits apply. For most Kentucky counties, that limit is currently around the mid-800 thousand range for one-unit properties, and lenders will calculate your maximum loan based on remaining entitlement and the purchase price.

Down Payment

Most Kentucky VA buyers purchase with zero down payment. A down payment may be required if you have reduced entitlement, are purchasing above certain price points with partial entitlement, or choose to put money down to lower the payment or funding fee.

VA Funding Fee

The VA funding fee helps keep the program self-sustaining. It is a one-time cost paid at closing or financed into the loan. The amount depends on your service history, down payment, and whether this is your first or subsequent use of VA eligibility.

Common examples include:

  • First-time use with zero down: typically a little over two percent of the loan amount
  • Subsequent use with zero down: typically a little over three percent of the loan amount

Many veterans do not pay the funding fee at all. If you receive qualifying VA disability compensation, hold certain Purple Heart or surviving spouse statuses, you may be exempt.

Kentucky VA Loan Process

  1. Initial conversation and prequalification – Review your goals, income, credit, and service history.
  2. COE request – The lender pulls your Certificate of Eligibility from the VA portal.
  3. Full application and documentation – Collect pay stubs, W-2s, LES statements, tax returns, bank statements, and award letters as needed.
  4. Automated underwriting – The file runs through an automated underwriting system to generate an Approve/Eligible or Refer finding.
  5. Appraisal and property review – A VA appraiser confirms value and checks Minimum Property Requirements.
  6. Underwriting review – The underwriter verifies income, assets, employment, credit, and residual income.
  7. Clear to close – Final conditions are met and closing documents are prepared.
  8. Closing and move-in – You sign your closing package, the loan funds, and you receive the keys.

Common VA Loan Myths in Kentucky

  • Myth: You need perfect credit to qualify. Reality: VA guidelines are often more flexible than conventional or even FHA in many areas.
  • Myth: VA loans always take longer. Reality: With a complete file and responsive parties, VA loans can close on the same timeline as other programs.
  • Myth: Sellers should avoid VA offers. Reality: VA buyers are often strong, and the VA’s lower default rates can be a positive signal.
  • Myth: VA loan amounts are capped at the county limit. Reality: Full entitlement borrowers are not bound by traditional loan limits.

How VA Compares to FHA, USDA, and Conventional in Kentucky

Program Down Payment Monthly Mortgage Insurance Credit Flexibility Geographic Restrictions
VA 0 percent for most buyers None High No rural requirement
FHA 3.5 percent minimum Required (MIP) High No rural requirement
USDA 0 percent Required (guarantee fee) Medium Must be in eligible rural areas
Conventional 3 to 5 percent or more PMI required below 20 percent down Medium to high No rural requirement

Who Is a Good Fit for a Kentucky VA Loan?

  • Eligible veterans and service members who want zero down financing
  • Borrowers with moderate credit who have strong residual income
  • Homebuyers planning to live in the property as a primary residence
  • Veterans with a qualifying VA disability rating who can benefit from a funding fee exemption

Ready to explore your VA loan options in Kentucky or see how your eligibility, credit, and income line up with current guidelines?

Contact Joel Lobb, Mortgage Loan Officer (NMLS 57916) to review your situation, run numbers, and map out your next steps toward homeownership.

This is not a commitment to lend. All loans are subject to credit approval, property approval, and underwriting guidelines. Programs, terms, and guidelines are subject to change without notice.

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Kentucky VA Mortgage Loan information

VA loans in Kentucky, Kentucky VA mortgage, and VA home loans for veterans in Kentucky.


Kentucky VA Mortgage Loan Guide for Home Buyers

You’ve come to the right place if you’re a Kentucky veteran or an active military member. You are searching for VA loan information in Kentucky. VA loans offer unique benefits and flexibility, but many myths and misconceptions surround them. Let’s debunk these myths now. We will give precise information to help you make informed decisions when applying for a Kentucky VA mortgage loan.

Common Myths About Kentucky VA Loans

Myth #1: VA Loans Are Hard to Qualify For

Fact: VA loans have more flexible credit and income requirements than conventional loans. They allow higher debt-to-income (DTI) ratios and lenient credit score thresholds.

  • No Minimum Credit Score: The VA does not set a minimum score, but most lenders require 620. Some go as low as 580, though approvals for lower scores can be more challenging.

Myth #2: VA Loans Need a Down Payment

Fact: VA loans do not require a down payment for loans at or below the local conforming limit.

  1. Jumbo Loans: For higher loan amounts, down payment requirements depend on your VA entitlement:
    • Full Entitlement: No down payment required.
    • Partial Entitlement: Down payment needed to meet the 25% guarantee.

Myth #3: VA Loans Require PMI (Private Mortgage Insurance)

Fact: Unlike conventional loans, VA loans do not require PMI.

  1. This means you save monthly on your house payment which would otherwise be added to your mortgage payment.
  2. Note: Kentucky VA loans do have a funding fee, which can be waived for eligible disabled veterans.

Kentucky VA Loan Refinancing Options

Myth #4: You Can’t Refinance a VA Loan

Fact: VA loans are easier to refinance compared to conventional loans, thanks to programs like:

  1. VA IRRRL (Streamline Refinance): Reduces your interest rate with minimal paperwork. No credit check or appraisal required.
  2. VA Cash-Out Refinance: Allows you to access your home’s equity, subject to an appraisal and credit check.

VA Loan Entitlement & Multiple VA Loans

Myth #5: You Can Only Have One VA Loan

Fact: You can have multiple VA loans as long as you have remaining entitlement.

  • Entitlement Coverage:
    • Loans under $144,000: VA guarantees up to $36,000.
    • Loans over $144,000: VA guarantees up to 25% of the loan amount.
  • Note: If you’ve used a part of your entitlement for another loan, you may need to make a down payment. This applies to extra loans.

Myth #6: You Can Only Use a VA Loan Once

Fact: You can use your VA loan benefits unlimited times throughout your life.

  • To reuse the benefit, you must either:
    • Pay off your current VA loan, or if enough entitlement is left on your COE, and you qualify with both house payments on the dti and residual income test, you may be able to have two va loans active at the same time
    • Sell the property and restore your entitlement.

Assumability and Other Uses of VA Loans

Myth #7: VA Loans Are Not Assumable

Fact: VA loans are assumable, meaning another buyer can take over your VA loan.

  1. Benefits: This is especially valuable in a low-interest-rate environment.
  2. Requirements for Buyers:

Myth #8: You Can’t Buy Land with a VA Loan

Fact: While VA loans don’t cover land purchases alone, they allow you to:

  1. Buy land and immediately build a home on it with a VA construction loan.
  2. Use a conventional loan to buy land, then refinance into a VA loan after building your home.

Myth #9: You Can’t Build a House with a VA Loan

Fact: VA construction loans allow you to build a home, as long as the builder is VA-approved. Upon completion, you can refinance the loan into a permanent VA mortgage.

Myth #10: VA Loans Are Only for Home Purchases

Fact: VA loans can also be used for home improvement projects.

Benefits of Kentucky VA Loans

  1. 100% Financing: No down payment required.
  2. No PMI: Reduces your monthly mortgage payment.
  3. Low Closing Costs: Sellers can pay closing costs and prepaid, up to 4% and even payoff borrower’s debts to qualify for a mortgage loan above the 4% threshold for seller concessions
  4. Flexible Credit Guidelines: Perfect for veterans with past credit issues. No minimum credit score but wight most heavily the last two years on credit report. No foreclosure, Chapter 7 bankruptcies the last two years
  5. Assumability: Allows buyers to take over existing VA loans.

Get Started with Your Kentucky VA Loan Today!

As a mortgage loan officer, I have over 20 years of experience. I’ve helped more than 1,300 Kentucky families buy or refinance their homes. Whether you’re buying your first home, upgrading, or refinancing, I’m here to make the process smooth and stress-free.

Contact Information:
📞 Text/Call: 502-905-3708
📧 Email: kentuckyloan@gmail.com
🌐 Website: www.mylouisvillekentuckymortgage.com

Joel Lobb
Mortgage Loan Officer – Specialist in Kentucky VA, FHA, USDA, and KHC Loans

  • NMLS ID: 57916
  • Address: 10602 Timberwood Circle, Louisville, KY 40223

Let’s make your homeownership dreams a reality! Reach out today to learn more about VA loan options in Kentucky.

“VA loans in Kentucky,” “Kentucky VA mortgage,” and “VA home loans for veterans in Kentucky.”

How to Apply for a Kentucky VA Loan

Kentucky VA loans provide veterans with an opportunity to secure a mortgage with minimal “red tape.” These loans often require no down payment and offer lower interest rates than other loan options, making homeownership more accessible for veterans. The application process for a Kentucky VA loan is similar to that of other mortgage loans, with the additional benefit of faster processing time. Kentucky VA loans offer numerous advantages, including no down payment requirement, flexibility in interest rate negotiation, and no monthly mortgage insurance premiums. Veterans who meet specific service criteria are eligible, and those with remaining entitlement or restored entitlement can benefit from these loans for home purchases or refinancing options.


Kentucky Veteran looking to secure a VA mortgage loan?

How to Apply for a Kentucky VA Loan

Why A Kentucky VA Loan?

The more you know about our home loan program, the more you will realize how little “red tape” there really is in getting a Kentucky  VA loan. These loans are often made without any down payment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans. Aside from the veteran’s certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan. If the lender is approved for automatic processing, as more and more lenders are now, a buyer’s loan can be processed and closed by the lender without waiting for VA’s approval of the credit application.

Additionally, if the lender is approved under VA’s Lender Appraisal Processing Program (LAPP), the lender may review the appraisal completed by a VA-assigned appraiser and close the loan on the basis of that review. The LAPP process can further speed the time to loan closing.

5 Easy Steps To A Kentucky VA Loan

Apply for a Certificate of Eligibility.

A veteran who doesn’t have a certificate can obtain one easily by making application on VA Form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement, to the local VA office.

Decide on a home you want to buy and sign a purchase agreement.

Order an appraisal from VA. (Usually this is done by the lender).

Most VA regional offices offer a “speed-up” telephone appraisal system. Call the regional VA office for details. See also How To Get a VA Loan.

Apply to a mortgage lender for the loan.

While the appraisal is being done, the lender (mortgage company, savings and loan, bank, etc.) can be gathering credit and income information. If the lender is authorized by VA to do automatic processing, upon receipt of the VA or LAPP appraised value determination, the loan can be approved and closed without waiting for VA’s review of the credit application. For loans that must first be approved by VA, the lender will send the application to the local VA office, which will notify the lender of its decision.

Close the loan and move in.

Kentucky VA Financing – A Good Deal For Kentucky Veterans

More than 29 million veterans and service personnel are eligible for VA financing. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.

Before arranging for a new mortgage to finance a home purchase, veterans should consider some of the advantages of Kentucky VA home loans:

Most important consideration, no down payment is required in most cases.

Loan maximum may be up to 100 percent of the VA-established reasonable value of the property.

Flexibility of negotiating interest rates with the lender

No monthly mortgage insurance premium to pay.

limitation on buyer’s closing costs.

An appraisal which informs the buyer of property value.

Thirty year loans with a choice of repayment plans:

traditional fixed payment (constant principal and interest; increases or decreases may be expected in property taxes and homeowner’s insurance coverage);

An assumable mortgage, subject to VA approval of the assumer’s credit.

Right to prepay loan without penalty.

VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial difficulties.

What Is A Kentucky VA-Guaranteed Loan?

These loans are made by a lender, such as a mortgage company, savings and loan, credit union or bank. VA’s guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guaranty, a veteran who hasn’t previously used the benefit may be able to obtain a Kentucky VA loan up to $484,500 depending on the borrower’s income level and the appraised value of the property. The local VA office can provide more details on guaranty and entitlement amounts.

What Can A Kentucky VA Loan Be Used For?

To buy a home, including townhouse or condominium unit in a VA-approved project.

To build a home.

To simultaneously purchase and improve a home.

To improve a home by installing energy-related features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA. These features may be added with the purchase of an existing dwelling or by refinancing a home owned and occupied by the veteran. A loan can be increased up to $3,000 based on documented costs or up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs. A refinancing loan may not exceed 90 percent of the appraised value plus the costs of the improvements. Check with a lender or VA for details.

To refinance an existing home loan up to 90 percent of the VA-established reasonable value or to refinance an existing VA loan to reduce the interest rate.

To buy a manufactured home and/or lot.

VA Loans – Who Is Eligible?

Veterans with active duty service, that was not dishonorable, during World War II and later periods are eligible for VA loan benefits. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam era (August 5, 1964 to May 7, 1975) Veterans must have at least 90 days’ service. Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days’ active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16,1981, must in most cases have served at least 2 years.

Persian Gulf Conflict

Basically, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible. VA regional office personnel may assist with eligibility questions.

Selected Reserve

Members of the Selected Reserve, including National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving may be eligible. The expanded eligibility for Reserves and National Guard individuals will expire October 28, 1999. Contact the local VA office to find out what is needed to establish eligibility. Reservists will pay a slightly higher funding fee than regular veterans. (See paragraph entitled “Costs of Obtaining a VA Loan” in How to Get a VA Loan).

Had A VA Loan Before?

Remaining Entitlement

Veterans who had a VA loan before may still have “remaining entitlement” to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000. This was much lower in years past and has been increased over time by changes in the law. For example, a veteran who obtained a $25,000 loan in 1974 would have used $12,500 guaranty entitlement, the maximum then available. Even if that loan is not paid off, the veteran could use the $23,500 difference between the $12,500 entitlement originally used and the current maximum of $36,000 to buy another home with VA financing. An additional $14,750, up to a maximum entitlement of $50,750 is available for loans above $144,000 to purchase or construct a home.

Most lenders require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less. Thus, in the example, the veteran’s $23,500 remaining entitlement would probably meet a lender’s minimum guaranty requirement for a no down payment loan to buy a property valued at and selling for $94,000. The veteran could also combine a down payment with the remaining entitlement for a larger loan amount.

Restoration of Entitlement

Veterans can have previously-used entitlement “restored” to purchase another home with a VA loan if:

The property purchased with the prior VA loan has been sold and the loan paid in full, or

A qualified veteran-transferee (buyer) agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan. Remaining entitlement and restoration of entitlement can be requested through the nearest VA office by completing VA Form 26-1880.

How To Get A Kentucky VA Loan

VA Appraisal – Certificate of Reasonable Value

The CRV (Certificate of Reasonable Value) is based on an appraiser’s estimate of the value of the property to be purchased. Because the loan amount may not exceed the CRV, the first step in getting a VA loan is usually to request an appraisal. Anyone (buyer, seller, real estate personnel or lender) can request a VA appraisal by completing VA Form 26-1805, Request for Determination of Reasonable Value. After completing the form, it can either be mailed to the Loan Guaranty Division at the nearest VA office for processing or an appraisal can be requested by telephoning the Loan Guaranty Division for assignment of an appraiser. The local VA office may be contacted for information concerning its assignment procedures. The appraiser will send a bill for his or her services to the requester according to a fee schedule approved by VA. To simplify things, VA and HUD/FHA (Department of Housing and Urban Development/Federal Housing Administration) use the same appraisal forms. Also, if the property was recently appraised under the HUD procedure, under certain limited circumstances, the HUD conditional commitment can be converted to a VA CRV. The local VA office can explain how this is done.

It is important to recognize that while the VA appraisal estimates the value of the property, it is not an inspection and does not guarantee that the house is free of defects. Homebuyers should be encouraged to carefully inspect the property themselves, or to hire a reputable inspection firm to help in this area. VA guarantees the loan, not the condition of the property.

Application

The application process for VA financing is no different from any other type of loan. In fact, the VA application form is the same as that used for HUD/FHA and Conventional loans. The mortgage lender verifies the applicant’s income and assets, and obtains a credit report to see that other obligations are being paid on time. If all is well and the appraised value of the property is enough to cover the loan needed, the lender, in most instances, can then close the loan under VA’s automatic procedure. Only about 5 percent of VA loan applications have to be submitted to a VA office for approval before closing.

Requirements For Loan Approval

To obtain a VA loan, the law requires that:

The applicant must be an eligible veteran who has available entitlement.

The loan must be for an eligible purpose.

The veteran must occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan.

The veteran must be a satisfactory credit risk.

The income of the veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.

An experienced mortgage lender will be able to discuss specific income and other qualifying requirements.

Costs Of Obtaining A VA Loan

Funding Fee

VA Funding Fee Chart

The Funding Fee is calculated by looking at 5 different factors: Loan amount, loan type (Purchase or Refinance), type of service, down payment (if any) and prior VA loan use. Take a look at the charts below to see how the va funding fee varies based on these factors.

FUNDING FEES AFTER 1/1/2020

The VA funding fee is calculated as a percentage of the total loan amount. It must be paid or rolled into the loan at closing time. VA strongly recommends that you verify with your lender that the funding fee matches your military service.

In Public Law 116-23, Congress has established rates for loans closed on or after January 1, 2020, and before January 1, 2022 at the levels listed below:

The following do NOT pay the VA funding fee:

  • Veteran receiving VA compensation for a service-connected disability;
  • Veteran entitled to receive VA compensation for a service-connected disability, but receives retirement pay or active service pay;
  • Surviving spouse of a Veteran who died in active service or from a service-connected disability;
  • Servicemember on Active Duty who provides, on or before date of loan closing, evidence of having been awarded the Purple Heart.

Other Closing Costs

Reasonable closing costs may be charged by the lender. These costs may not be included in the loan. The following items may be paid by the veteran purchaser, the seller, or shared. Closing costs may vary among lenders and also throughout the nation because of differing local laws and customs.

VA Appraisal

Credit Report

Loan Origination Fee (usually 1 percent of the loan)

Discount Points

Title Search and Title Insurance

Recording Fees

State and/or Local transfer Taxes, if applicable

Survey

No commissions, brokerage fees or “buyer broker” fees may be charged to the veteran buyer.

Kentucky VA Loans – Need More Information?

Veterans seeking more detailed information concerning the VA home loan program may request VA Pamphlet 26-4, VA-Guaranteed Home Loans for Veterans, or VA Pamphlet 26-6, To the Home-Buying Veteran, from the nearest VA office. Loan Guaranty personnel at that office will also be pleased to answer specific questions and provide any other assistance they can.

Remember, VA-guaranteed financing is a benefit which Congress intended eligible veterans should have. If you are a veteran homebuyer or know of one, it makes sense to look into the VA loan program as a good way to finance a home purchase.

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If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free pre-qualification below for your next mortgage loan pre-approval.