Kentucky First-Time Homebuyer Loan Programs: FHA, VA, and USDA Explained
If you're a first-time homebuyer in Kentucky, it’s easy to get lost in the mortgage details. My job is to simplify the landscape so you can make a confident, well-informed decision. Below is a clear, side-by-side breakdown of FHA, VA, and USDA home loans—three programs designed to help Kentucky buyers secure affordable financing.
Learn more about each program here: FHA, VA, and USDA home loans in Kentucky.
FHA Loan – Ideal for Buyers with Lower Credit Scores
- Minimum Credit Score: 580+ (lower scores possible with more down)
- Down Payment: 3.5% minimum
- Debt-to-Income Ratio: Up to 45% front-end, 56.99% back-end
- Employment: Preferably 2-year job history
- Past Credit Issues: More flexible after bankruptcy or foreclosure
- Time to Close: Approximately 30–45 days
- Appraisal: Must meet FHA Minimum Property Standards
- Income Documentation:
- Recent pay stubs
- W-2s (last 2 years)
- Tax returns (as needed)
- Documentation for other income
VA Loan – Zero Down for Veterans and Active-Duty Borrowers
- Minimum Credit Score: No official requirement (most lenders prefer 620+)
- Down Payment: None required
- Debt-to-Income Ratio: Typically 41%, but can go higher with compensating factors and strong residual income
- Residual Income Requirements: View VA residual income guidelines
- Employment: Stable 2-year history recommended
- Past Credit Issues: More lenient after bankruptcy or foreclosure
- Time to Close: Approximately 45–60 days
- Appraisal: Must meet VA Minimum Property Requirements (MPRs)
- Income Documentation:
- Pay stubs
- W-2s
- Tax returns
- Documentation for bonuses, alimony, rental income
USDA Loan – Zero Down for Rural Kentucky Homebuyers
- Minimum Credit Score: 640 for GUS automated approval (manual options possible)
- Down Payment: 0%
- Debt-to-Income Ratio: 32% front-end and 45% back-end with strong history
- Past Credit Issues: Flexibility for prior bankruptcy or foreclosure
- Time to Close: 30–60 days due to USDA conditional commitment
- Appraisal: Must meet USDA safety standards (similar to FHA, but not required to use an FHA appraiser)
- Income Documentation:
- Pay stubs
- W-2s
- Tax returns (2 years)
- Other income documentation
Appraisal Requirements and Income Documentation Overview
FHA Loan Appraisal
Requires an FHA-approved appraiser to verify the home meets FHA minimum property standards, focusing on safety, health, and structural soundness.
FHA Income Documentation
Typically includes recent pay stubs, W-2s, and tax returns. Additional income must be documented.
VA Loan Appraisal
A VA-assigned appraiser evaluates the home to ensure it meets VA Minimum Property Requirements (MPRs).
VA Income Documentation
Includes pay stubs, W-2s, tax returns, and verification of additional income such as rental income, alimony, or bonuses.
USDA Loan Appraisal
A USDA appraiser confirms the property meets rural housing health and safety standards.
USDA Income Documentation
Requires similar income verification as FHA and VA loans, including pay stubs, W-2s, tax returns, and proof of additional income.
Internal Links for Kentucky Mortgage Buyers
- Kentucky FHA Mortgage Guide
- Kentucky USDA Zero Down Guide
- KHC Down Payment Assistance
- First-Time Homebuyer Mortgage Programs
Contact Information
Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA
Text/Call: 502-905-3708
Email: kentuckyloan@gmail.com
Website: www.mylouisvillekentuckymortgage.com
NMLS 57916 • EVO Mortgage NMLS 1738461 • Equal Housing Lender
