Did you know you may be eligible for a zero-down loan without any maximum limit if you are a veteran or military service member in Kentucky? In 2020, the VA eliminated all limits for VA loans in Kentucky VA loans for most borrowers. This means that first-time VA homebuyers and those with full entitlements can borrow as much money as the lenders will allow. The amount of your Kentucky VA home loan will now depend more on your financial status than the local housing market. VA loan limits are also still available for homebuyers with VA loans or partial entitlement. You may qualify if you are one of the 267,594 veterans living in Kentucky, active-duty servicemember or eligible surviving spouse of a military member.

There’s no Kentucky VA loan limits in 2022 for those with full entitlement

The Department of Veterans Affairs eliminated KY VA home loan limits for fully-qualified borrowers in 2020. That means you can borrow more because you don’t have to worry about finding a house within your local limits. As such, VA home loans now have increased appeal since removing the loan limit requirement. This is especially true when compared to other government mortgage loans. FHA loans, also government-backed, have loan limitations that are based on local housing prices. In most areas across the country, the FHA limit for 2022 is $420,680. Loan limits also apply to conforming conventional mortgages, which are insured by Fannie Mae or Freddie Mac rather than a government agency. All that being said, it’s important to remember that just because qualified applicants don’t have to meet any VA loan limit in Kentucky doesn’t mean that you can purchase a home at any price.

Lenders now decide how much loan you can afford

Your ability to repay the loan now depends on on the private mortgage lender that issues your VA-backed loan. Along with some general VA loan requirements, the lender will consider several factors.

  • Applicant Credit Score: VA borrowers usually need to have a credit score of 620 or better, although some lenders are rumored to lend down to a 580 from time to time. Additionally, Kentucky VA loan rates often depend on an applicant’s credit score.
  • Income: Lenders will verify your income for the past 2 years to ensure you are earning enough to pay your monthly mortgage payment. VA loans employ two methods of evaluating applicant income to determine how much mortgage they can afford, known as the Debt-to-Income Ratio and the Residual Income method. Of course, you should be asking yourself how much mortgage can I afford before applying for any home loan.
  • Applicant Debt-To Income Ratio (DTI): Your debt-to-income ratio compares your monthly debt payments to your monthly income. VA even allows the lender to approve them at a higher DTI if they have other compensating factors. While there’s no limit on VA loan programs for 2022, its ultimately up to your lender and your personal circumstances to determine how much you can borrow.

You can search for an approved VA lender in Kentucky, including in the following cities and towns here:

Alexandria, Ashland, Bardstown, Bellevue, Berea, Bowling Green, Buckner, Burlington, Campbellsville, Central City, Cold Spring, Corbin, Covington, Crestwood, Cynthiana, Danville, Dayton, Douglass Hills, Edgewood, Elizabethtown, Elsmere, Erlanger, Flatwoods, Florence, Fort Campbell North, Fort Knox, Fort Mitchell, Fort Thomas, Fort Wright, Francisville, Frankfort, Franklin, Georgetown, Glasgow, Harrodsburg, Hebron, Henderson, Hendron, Highland Heights, Hillview, Hopkinsville, Independence, Jeffersontown, La Grange, Lawrenceburg, Lebanon, Leitchfield, Lexington-Fayette, London, Louisville, Lyndon, Madisonville, Massac, Mayfield, Maysville, Middlesborough, Middletown, Monticello, Morehead, Mount Sterling, Mount Washington, Murray, Newport, Nicholasville, Oakbrook, Oak Grove, Owensboro, Paducah, Paris, Pikeville, Princeton, Radcliff, Richmond, Russellville, Shelbyville, Shepherdsville, Shively, Somerset, St. Matthews, Taylor Mill, Union, Versailles, Villa Hills, Vine Grove, Williamsburg, Wilmore, Winchester

How do I determine my entitlement level?

The VA Certificate of Eligibility, or COE, is what informs lenders of an applicant’s eligibility for a VA loan. It also indicates your level of entitlement. The COE helps the VA and your lender to communicate. Your COE may not make much sense at first glance. As an example, if a COE reflects a basic entitlement of $36,000, that number shows how much loan insurance the VA offers through the VA guarantee, rather than your potential borrowing potential. This VA insurance reduces the risk for the lender and eliminates the need to make a down payment or monthly mortgage insurance payments. The VA covers 25% of the amount you borrow on your home loan, regardless of how much it is approved by the lender. You may also want to refer to a VA loan calculator to help figure out your entitlement and potential borrowing power.

What does full entitlement refer to?

The maximum VA home loan benefits you’re eligible for is known as full entitlement. If you’re a first-time home buyer or it’s you’re first time using a VA loan, you’re likely to have a full entitlement. If you’ve used your VA benefits before, you may still be eligible for a full entitlement if the loan is fully repaid and your benefit is restored. Otherwise, you may be a borrowers that’s eligible for partial entitlement. That may be the case for someone who used an Kentucky VA loan to purchase a home a few years back and is still paying that loan off. With a partial entitlement, an applicant may still be eligible for a VA loan but the mortgage must not exceed their local max loan amount for VA financing. There are other caveats that may apply related to your VA home loan entitlement eligibility. As an example, current VA loan holders or former borrowers who have been foreclosed will not be eligible for their full entitlement. You won’t get your full entitlement if you’ve short-sold a VA-backed loan which the VA had to reimburse. In fact, if you’ve had a foreclosure or short-sale in your past, you might not be eligible to receive another VA loan at all.

What is the maximum amount I can borrow if I have partial eligibility?

Since 2020, specific KY VA loan limits only apply to partial entitlement. Those mortgage limits are identical to the conventional conforming loan limit for a particular area. Conventional loan limits are set by the Federal Housing Finance Agency (FHFA) each year. The loan limits will depend on where you live and the property you purchase. They are determined based on local home prices. This FHFA map will show you the loan limits for your county. It’s not difficult to determine your county’s loan limit. However, it can be complicated to calculate how this limit will affect your home loan. To determine if you will need a downpayment on the VA loan, lenders use a complex equation. You can read our guide on buying an additional house with a VA loan. Talk to a VA lender if you only want to find out how much house you could afford using a VA loan. In just a few minutes, they can calculate your home’s potential price and look up your COE.

Kentucky VA Home Loan Limits 2022 Map (for partial eligibility applicants)

Kentucky VA County Loan Limits 2022 (for partial eligibility applicants)

County Name
Limit
ADAIR$424,100
ALLEN$424,100
ANDERSON$424,100
BALLARD$424,100
BARREN$424,100
BATH$424,100
BELL$424,100
BOONE$424,100
BOURBON$424,100
BOYD$424,100
BOYLE$424,100
BRACKEN$424,100
BREATHITT$424,100
BRECKINRIDGE$424,100
BULLITT$424,100
BUTLER$424,100
CALDWELL$424,100
CALLOWAY$424,100
CAMPBELL$424,100
CARLISLE$424,100
CARROLL$424,100
CARTER$424,100
CASEY$424,100
CHRISTIAN$424,100
CLARK$424,100
CLAY$424,100
CLINTON$424,100
CRITTENDEN$424,100
CUMBERLAND$424,100
DAVIESS$424,100
EDMONSON$424,100
ELLIOTT$424,100
ESTILL$424,100
FAYETTE$424,100
FLEMING$424,100
FLOYD$424,100
FRANKLIN$424,100
FULTON$424,100
GALLATIN$424,100
GARRARD$424,100
GRANT$424,100
GRAVES$424,100
GRAYSON$424,100
GREEN$424,100
GREENUP$424,100
HANCOCK$424,100
HARDIN$424,100
HARLAN$424,100
HARRISON$424,100
HART$424,100
HENDERSON$424,100
HENRY$424,100
HICKMAN$424,100
HOPKINS$424,100
JACKSON$424,100
JEFFERSON$424,100
JESSAMINE$424,100
JOHNSON$424,100
KENTON$424,100
KNOTT$424,100
KNOX$424,100
LARUE$424,100
LAUREL$424,100
LAWRENCE$424,100
LEE$424,100
LESLIE$424,100
LETCHER$424,100
LEWIS$424,100
LINCOLN$424,100
LIVINGSTON$424,100
LOGAN$424,100
LYON$424,100
MADISON$424,100
MAGOFFIN$424,100
MARION$424,100
MARSHALL$424,100
MARTIN$424,100
MASON$424,100
MCCRACKEN$424,100
MCCREARY$424,100
MCLEAN$424,100
MEADE$424,100
MENIFEE$424,100
MERCER$424,100
METCALFE$424,100
MONROE$424,100
MONTGOMERY$424,100
MORGAN$424,100
MUHLENBERG$424,100
NELSON$424,100
NICHOLAS$424,100
OHIO$424,100
OLDHAM$424,100
OWEN$424,100
OWSLEY$424,100
PENDLETON$424,100
PERRY$424,100
PIKE$424,100
POWELL$424,100
PULASKI$424,100
ROBERTSON$424,100
ROCKCASTLE$424,100
ROWAN$424,100
RUSSELL$424,100
SCOTT$424,100
SHELBY$424,100
SIMPSON$424,100
SPENCER$424,100
TAYLOR$424,100
TODD$424,100
TRIGG$424,100
TRIMBLE$424,100
UNION$424,100
WARREN$424,100
WASHINGTON$424,100
WAYNE$424,100
WEBSTER$424,100
WHITLEY$424,100
WOLFE$424,100
WOODFORD$424,100

VA Loan FAQs

Can closing costs be included in a VA Loan?

If you don’t have enough funds to cover closing costs on your new home, you can include certain costs in your VA loan. You also have the option to roll your funding fee into your total mortgage amount. As for the fees that can’t be rolled into your mortgage per VA loan qualifications, you may still be eligible for seller or lender concessions that will lower the upfront cash cost.

What are the closing costs for a VA loan?

Borrowers generally pay different closing costs depending on where they live and the particulars of their transaction you have. Closing costs are often within the range of 3% and 5% of the total mortgage amount.

Who pays the closing costs of a VA loan?

The closing costs of a VA loan are generally split between the seller and buyer, however the seller costs must not exceed 4% of the total loan amount. The seller’s share usually includes the commission for real estate agents.

You, as the buyer, are responsible for the VA funding fee, origination fee and discount points, VA appraisal fee, title fees, and other costs, some of which can be financed. Fortunately, VA home loan requirements establish limitations on costs for home buyers, and also help you keep costs down by limiting the origination fee.

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