HOWELL’S SENATE BILL 157 EARNS 

PASSAGE OUT OF THE FULL SENATE

Bill brings Kentucky in line with federal standards

FRANKFORT, Ky. (Feb. 26, 2026) — Senate Bill (SB) 157, sponsored by Sen. Jason Howell, R-Murray, will clarify Kentucky law governing certain mortgage loans and ensure greater consistency with federal lending standards. SB 157 passed off the Senate floor today and may now be taken up by the House of Representatives.


Under the Old Kentucky law, the cost of buying down your interest rate was included as a cost under the fee cap, making it harder for the home buyer to buy down your interest rate. under the federal qualified mortgage fee structure, the cost of buying down your interest rate is excluded from the cap, making it much easier for a consumer to buy down their interest rate on the front end. 


By aligning Kentucky statute with federal requirements, the measure promotes uniform standards in the lending process while maintaining important consumer protections.


“Clear and consistent lending standards are essential for both borrowers and lenders,” Howell said. “Senate Bill 157 aligns Kentucky law with federal guidelines, strengthens transparency in the mortgage process, and helps ensure consumers are protected while maintaining access to responsible lending options.”


SB 157 would amend Kentucky’s mortgage loan company and broker statute, one that has not been updated since 2008. Current Kentucky law states that there are limits of total net income generated by a lender and its affiliates to the greater of $2,000 or four percent of the total loan amount, which aligns with federal standards. This would apply to both first and second mortgages.


The bill applies to mortgage contracts entered into after its effective date, providing clarity for lenders and borrowers moving forward without affecting existing agreements.


SB 157 is part of Howell’s ongoing efforts to support sound financial policy and promote fair practices and stability in Kentucky’s housing market.



To stay updated on the next steps for SB 157, follow along at Legislative.ky.gov.