Kentucky VA Mortgage Credit Guidelines & Approval Requirements for Veterans
Kentucky VA Mortgage: Complete Credit Guidelines & Approval Requirements for Veterans
Are you a Kentucky veteran ready to buy a home or refinance your mortgage? VA loans offer incredible benefits including 100% financing, no down payment, and no monthly mortgage insurance. Understanding the credit guidelines and approval requirements is the first step toward homeownership. This comprehensive guide covers everything you need to know about Kentucky VA mortgage credit requirements, including credit scores, bankruptcy history, foreclosures, collections, student loans, and debt-to-income ratios.
Key VA Mortgage Benefits Available to Kentucky Veterans
- 100% Financing Available – Up to your qualifying income and VA entitlement, no down payment required
- No Monthly Mortgage Insurance (PMI) – Unlike FHA loans, VA loans eliminate the cost of mortgage insurance
- Seller Can Pay Closing Costs – Sellers can cover all of your closing costs, reducing your out-of-pocket expenses
- Flexible Eligibility – Active Duty, Reserves, National Guard, and Retired Veterans can all apply
- Multiple Uses of VA Loan Benefit – You can use your VA loan guaranty more than once, and in some cases, can have two existing VA loans simultaneously
- No Prepayment Penalties – Pay off your VA loan early without penalties
VA Loan Eligibility: Basic Requirements
Certificate of Eligibility (COE)
To qualify for a Kentucky VA mortgage, you must be an eligible veteran with a Certificate of Eligibility. We can help active duty personnel and veterans obtain their COE through the VA website or by contacting our office. Your COE verifies your military service and determines your VA loan entitlement.
Kentucky VA Mortgage Credit Score Requirements
Minimum Credit Score for VA Loan Approval
Typical Range: 620 + FICO Score
While the VA itself does not mandate a minimum credit score, individual lenders establish credit overlays to protect their interests. Most Kentucky VA lenders require a minimum FICO score of 580–620 for loan approval. However, credit scores are just one part of the approval decision.
The key takeaway: Even if you have lower credit (below 620), you may still qualify through manual underwriting if other compensating factors are strong, such as stable employment, low debt-to-income ratio, or significant savings.
Credit History & Background Requirements
Bankruptcy & Foreclosure Rules
No bankruptcies or foreclosures in the last 2 years is the standard requirement for Kentucky VA mortgages. Additionally, your CAVIRS report (a VA-specific credit check) must be clear.
Derogatory Credit Items:
- Collections accounts must be resolved or paid in full
- Charge-offs should be settled before loan approval
- Delinquent accounts demonstrate recent payment issues and will require explanation
- Recent late payments (30, 60, 90 days) are considered high-risk factors
Student Loan Debt & Payment Requirements
Student Loans: Both active and delinquent student loan debts count toward your debt-to-income ratio. If you have delinquent student loans, they must be brought current or placed into a legitimate repayment plan (such as income-driven repayment) before approval.
GI Bill Income: An important note—you cannot use your GI Bill benefits as qualifying income for your VA mortgage payment, even if you’re currently using it for education. Only stable, verifiable employment income counts.
Other Credit Obligations
The following items are carefully reviewed during the underwriting process:
- Garnishments: Active wage garnishments may disqualify you; resolved garnishments can be considered if documented
- Child Support Delinquency: Any delinquent child support must be brought current before approval
- Back Taxes: Federal or state tax liens will prevent approval; taxes owed must be resolved or on a valid payment plan
- Judgments: Outstanding judgments must be satisfied or a payment plan established
Kentucky VA Mortgage Debt-to-Income Ratios
| Loan Type / Scenario | Front-End Ratio | Back-End Ratio |
|---|---|---|
| Automated Underwriting (FICO 620+) | Up to no set rule% | no set rule based on redsidual net income mostly, higher credit score and reserves can have high debt to income ratios over 50% with good compensating factors % |
| Manual Underwriting / Lower Credit | 29% | 41% |
| Cash-Out Refinance | no set min | no set min |
Front-end ratio: Your monthly housing payment (mortgage, taxes, insurance, HOA) divided by gross monthly income.
Back-end ratio: All monthly debts (housing + car loans, credit cards, student loans, etc.) divided by gross monthly income.
Work History & Employment Requirements
2-Year Work History Required: Most VA lenders require a 2-year employment history. However, legitimate interruptions are acceptable with proper documentation, such as:
- Military service or active duty assignments
- Work-related injury or disability
- Full-time education or training
- Job loss due to economic conditions (documented)
Kentucky VA Loan Appraisal & Closing Costs
VA Appraisal Requirements
Appraisal Cost: Kentucky VA loan appraisals now cost a minimum of $605 and require a termite report on all purchase and refinance transactions, with the exception of condominiums.
Who Pays for the Appraisal? Typically, the seller can cover this cost as part of closing costs. If you’re refinancing, you may pay this cost, though it can sometimes be rolled into the loan amount.
Can You Use Your VA Loan Benefit More Than Once?
Yes! One major advantage of VA loans is that you can use your VA loan guaranty more than once throughout your lifetime. In some cases, you can even have two existing VA loans active at the same time. This flexibility makes VA loans ideal for Kentucky families who want to upgrade their home or purchase investment property while keeping their existing low-rate loan.
Example: You could keep your first VA loan at 3.5% and purchase a second home or investment property with a new VA loan, allowing you to leverage your full entitlement.
How We Can Help You Get Approved
At our Kentucky mortgage company, we specialize in helping veterans navigate the VA loan process with personalized guidance. Whether you have credit challenges, collections, student loan debt, or other concerns, we have the expertise to find solutions and get you approved for your VA mortgage.
Our Services Include:
- Free VA mortgage applications with same-day pre-approval
- Expert credit guidance to improve your approval odds
- Help obtaining your Certificate of Eligibility (COE)
- Detailed debt-to-income analysis and loan structure recommendations
- Direct lender relationships for faster closing
- Personalized support throughout your entire loan process
Ready to Explore Your Kentucky VA Mortgage Options?
Contact us today for a free consultation. We’ll review your financial situation, discuss your VA loan benefits, and guide you toward homeownership or refinancing success.
Joel Lobb
Mortgage Loan Officer – Kentucky VA Loan Specialist
NMLS Personal ID: 57916 | Company NMLS ID: 1738461
Equal Housing Lender
Frequently Asked Questions About Kentucky VA Mortgages
What if I have a past bankruptcy or foreclosure?
You generally need to wait 2 years from the discharge or sale date. After that waiting period, you may qualify if you can demonstrate financial stability, employment history, and improved credit management.
Can I get approved with delinquent student loans?
Delinquent student loans must be brought current or placed into a legitimate income-driven repayment plan. Once in a qualifying repayment arrangement, they can count toward your debt-to-income calculation.
What happens if I have multiple derogatory items (collections, charge-offs)?
Multiple derogatory accounts will require manual underwriting. You’ll need to demonstrate a credible explanation for each item and show evidence of financial recovery and stability.
Is the VA appraisal more or less expensive than a conventional appraisal?
VA appraisals include additional requirements (like termite inspections in Kentucky) and typically cost $605 or more. However, this is usually paid by the seller or rolled into closing costs, not by you as the buyer.
How quickly can I get approved for a Kentucky VA mortgage?
With complete documentation and a clear credit profile, same-day pre-approval is possible. Full approval typically takes 3–5 business days once all documents are submitted.
Disclaimer: This website is not endorsed by the VA, FHA, or any government agency. It is an independent platform created to educate and assist Kentucky homebuyers with expert advice and accessible mortgage tools. All information is subject to change based on VA guidelines and lender requirements.
🏡 Kentucky VA Mortgage
Complete Credit Guidelines & Approval Requirements for Veterans
100% Financing
No down payment required up to your qualifying income
No PMI
Zero monthly mortgage insurance payments
Seller Pays Costs
Seller can cover all closing costs
All Service Types
Active Duty, Reserves, Guard & Retired
Typical Minimum
580–620
FICO Score
VA Requirement
No Minimum
VA has no minimum; lenders set overlays
Manual Underwriting
Possible Below 580
With strong compensating factors
Must Have
| Loan Type | Front-End Ratio | Back-End Ratio |
|---|---|---|
| Automated (FICO 620+) | no set min | no set min |
| Manual Underwriting | 29% | 41% |
Collections
Collections typically don’t have to be paid.
Charge-Offs
Does not have to be paid typically but case by case treated for each charge off
Late Payments
30, 60, 90 days requires explanation
Student Loans (Delinquent)
Must be current or in repayment plan
Garnishments
Active ones may disqualify; resolved okay
Child Support Arrears
Must be brought current
Back Taxes
Must be resolved or on payment plan
Outstanding Judgments
Must be satisfied or planned
✓ Acceptable Breaks in Employment (2-Year History)
- Military service or active duty assignments
- Work-related injury or disability
- Full-time education or training
- Documented job loss (economic hardship)
📋 Other Important Details
Minimum $605 in Kentucky includes termite report (except condos)
Can be used more than once; sometimes can have 2 active VA loans
Cannot use GI Bill benefits as qualifying income for mortgage
Ready to Get Started?
Get your free VA mortgage pre-approval from Kentucky’s trusted mortgage specialist
Joel Lobb
Mortgage Loan Officer – Kentucky VA Specialist
NMLS ID: 57916 | Company NMLS ID: 1738461
Equal Housing Lender
KENTUCKY VA MORTGAGE LENDER 
What kind of credit score do you need to get a VA loan approved in Kentucky in 2019