FHA Loans in Kentucky for First-Time Homebuyers: 2025 Guide
If you’re buying your first home in Kentucky, an FHA loan might be the perfect option. These government-backed mortgages help first-time buyers secure financing with low down payments, flexible credit requirements, and assistance options like the Kentucky Housing Corporation’s Down Payment Assistance Program.
🔍 What Is an FHA Loan?
An FHA loan is insured by the Federal Housing Administration and designed to make homeownership more accessible to moderate and low-income borrowers. FHA loans allow for:
- Down payments as low as 3.5%
- Credit score requirements starting at 580
- Assistance with closing costs
- Use of gift funds or grants
📊 FHA vs. Conventional Loan Comparison
📝 Who Qualifies for an FHA Loan in Kentucky?
- Credit Score: 580+ for 3.5% down or 500–579 with 10% down
- DTI Ratio: Max 43% standard, up to 50% with strong compensating factors
- Employment: 2 years in the same field preferred
- Residency: Must be a U.S. citizen or legal resident
- Property: Primary residence that passes an FHA appraisal
📍 Local Advantage: Kentucky Housing Corporation DPA
First-time buyers in Kentucky may qualify for up to $10,000 in down payment assistance through the KHC. This forgivable second mortgage can be combined with an FHA loan for little-to-no money down.
🎯 Step-by-Step FHA Loan Process
- Apply with an FHA-approved lender
- Submit income, credit, and asset documentation
- FHA assigns a case number
- Appraisal is ordered
- Loan goes through underwriting
- Clear to close!
❓ Frequently Asked Questions
What is the minimum credit score required?
580+ for 3.5% down; 500–579 requires 10% down.
Does Kentucky offer assistance with FHA loans?
Yes, KHC offers up to $10,000 in down payment assistance.
Can FHA loans be assumed by a future buyer?
Yes. FHA loans are assumable — a big advantage in a rising-rate market.
📢 Ready to Get Pre-Approved?
Work with a trusted Kentucky FHA loan expert — Joel Lobb has helped over 1,300 families become homeowners.
Start Your FHA Loan Application
