I specialize in Kentucky First Time Homebuyers FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans. I have helped over 1300 Kentucky families buy their first home or refinance their current mortgage for a lower payment; Kentucky First time buyers we still how available down payment assistance with KHC. Free Mortgage applications/ same day approvals. Web site is not endorsed by the FHA, VA, USDA govt agency. Text/call 502-905-3708 kentuckyloan@gmail.com NMLS 57916 NMLS 1738461
What a Short Sale Means for a Mortgage Loan in Kentucky
A short sale happens when a homeowner in Kentucky sells their property for less than the total amount owed on the mortgage, and the lender agrees to accept that reduced payoff. The transaction brings the loan balance up short of the full amount owed, allowing the borrower to avoid foreclosure and the lender to reduce further loss exposure. This option is commonly used when a borrower faces financial hardship and needs a controlled exit strategy.
How a Kentucky Short Sale Works
The borrower lists the home, receives an offer, and submits it to their servicer for approval. The lender reviews the hardship, property value, net proceeds, and documentation before issuing written approval. While the seller can accept an offer, the contract is not binding until the lender signs off. Typical approval timelines range from 30 to 90 days depending on loan type and investor rules.
Hardship Requirements
Kentucky lenders require documented financial hardship, such as job loss, medical expenses, divorce, reduced income, or major unexpected financial obligations. The seller must demonstrate an inability to continue making payments and an absence of viable alternatives such as modification or repayment plans.
What Costs Are Covered
Most Kentucky short sales allow the lender to pay seller-side costs, including real estate commissions, title fees, and standard closing costs, to facilitate a quick resolution. The seller does not receive proceeds from the sale.
Credit Impact
While a short sale does negatively affect credit, the impact is typically less severe than foreclosure. Many borrowers see a 100–150 point drop, with faster recovery times when payments were not severely delinquent prior to the short sale.
How Long You Must Wait to Buy Again in Kentucky
FHA loans: generally a 3-year waiting period
VA loans: roughly a 2-year waiting period
USDA loans: typically a 3-year waiting period
Conventional loans: 4 years in most cases, or 2 years with strong compensating factors
When a Short Sale Is a Strategic Option
This option may be appropriate when the borrower owes more than the home is worth, cannot maintain payments, and wants to mitigate deeper credit damage. Short sales typically allow faster requalification for FHA, VA, USDA, and conventional financing compared with foreclosure timelines.
Kentucky-Specific Considerations
Some lenders waive deficiency balances; always obtain written confirmation.
Homes requiring foundation, roofing, or structural repairs often qualify more readily.
KHC loans may require additional investor-level review before approval.
Frequently Asked Questions About Short Sales in Kentucky
Does a short sale hurt your credit?
Yes, but typically less than a foreclosure. Many borrowers see a 100–150 point impact depending on payment history.
Do you need lender approval for a short sale?
Yes. The contract is not valid until the lender or investor issues written approval.
Can a seller receive money from a short sale?
No. A short sale requires all proceeds to go toward satisfying the mortgage balance.
How long does a Kentucky short sale take?
Most short sales take 30–90 days for lender approval, depending on investor, servicer, and documentation requirements.
For personalized guidance on Kentucky mortgage options after a short sale, contact Joel Lobb today.
Call or text: 502-905-3708
Email: kentuckyloan@gmail.com
Website: www.mylouisvillekentuckymortgage.com
Joel Lobb • Mortgage Broker • NMLS 57916
EVO Mortgage • NMLS 1738461 • Equal Housing Lender
This is not a commitment to lend. All loans subject to credit and property approval.
Louisville Kentucky First-Time Home Buyer Programs
FHA • VA • USDA • KHC Down Payment Assistance for Louisville & Jefferson County Buyers
Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA, Mortgage Broker – NMLS #57916 | Company NMLS #1738461 | Equal Housing Lender
Louisville Kentucky first-time home buyer programs can help you purchase with low or zero down payment.
Buying your first home in Louisville can feel overwhelming — especially when you're trying to compare loan programs, down payment
options, and credit requirements. The good news is that Louisville and Jefferson County buyers have some of the strongest
first-time home buyer programs in Kentucky, and many of them allow you to get into a home with low or even zero down
payment.
This guide breaks down all the major Louisville Kentucky first-time home buyer programs — FHA, VA, USDA, and
Kentucky Housing Corporation (KHC) Down Payment Assistance — and gives you the tools and links you need to make a confident decision.
Whether you're shopping in Germantown, PRP, Okolona, Jeffersontown, Shively, Valley Station, the Highlands, Hikes Point or anywhere else in Jefferson County, the right program can help you enter the market faster with less out-of-pocket cash.
FHA Loans for Louisville First-Time Buyers
FHA loans remain Louisville’s most widely used program for first-time buyers because they offer a low minimum down payment and flexible
credit standards. They are especially helpful if you are transitioning from renting into your first home.
Key FHA Benefits
3.5% down payment when you meet minimum lender credit guidelines
Down payment can be covered by gift funds, grants, or KHC down payment assistance
More forgiving credit requirements than many conventional loans
Competitive fixed interest rates
Seller can pay up to 6% of the purchase price toward closing costs and prepaids
Most lenders prefer to see scores at or above 580 for FHA. If your score is lower, a structured credit improvement plan
can often move you into qualifying range.
VA Home Loans for Louisville Veterans & Service Members (Zero Down)
If you are a veteran, active-duty service member, or eligible surviving spouse, a VA home loan is often the strongest
option available when buying in Louisville.
Major VA Advantages
Zero down payment required for eligible borrowers
No monthly mortgage insurance (PMI)
Competitive interest rates, often lower than FHA or conventional loans
Flexible credit guidelines compared with many other loan programs
Potential to reuse your VA benefit and even hold more than one VA loan in specific scenarios
USDA Rural Housing for Louisville & Surrounding Areas
While most of central Louisville does not qualify for USDA, many communities in the surrounding counties do. USDA can be an excellent
zero-down solution if you are open to buying just outside the city.
USDA Zero-Down Features
100% financing — no down payment required
Fixed-rate, 30-year terms
Income-based eligibility with county and household size limits
Seller-paid closing costs allowed within guidelines
USDA works especially well in parts of Bullitt, Oldham, Shelby, Spencer, Henry and other nearby counties that still offer
reasonable commutes into Louisville.
Kentucky Housing Corporation (KHC) Down Payment Assistance
Kentucky Housing Corporation (KHC) provides down payment assistance that pairs with FHA, VA, USDA, and conventional
loans, making it a key tool for Louisville Kentucky first-time home buyers who need help with down payment and closing costs.
Common KHC Down Payment Assistance Options
Regular DAP – Down payment assistance up to program limits, typically repaid over 10 years
Affordable DAP – Often offers a lower interest rate and targets lower-to-moderate income households
Many Louisville buyers use KHC to dramatically reduce the cash needed at closing. It’s often combined with FHA or conventional loans to
make homeownership more achievable.
Each program that serves Louisville Kentucky first-time home buyers has its own set of income limits, credit thresholds,
and purchase price considerations. Here is a general snapshot:
FHA: No formal income limit; minimum 3.5% down; many lenders prefer 580+ scores.
VA: No set income limit; 0% down; underwriting focuses on residual income and overall financial stability.
USDA: Income limits by household size and county; property must be USDA-eligible; many lenders like to see 620+ scores.
KHC DAP: Income limits and purchase price caps that vary by county; typically more comfortable starting around 640+ scores for assistance.
Frequently Asked Questions about Louisville Kentucky First-Time Home Buyer Programs
Do I have to be a first-time buyer to use these Louisville programs?
Not always. FHA, VA and USDA loans do not require you to be a first-time buyer as long as you meet occupancy and guideline
requirements. Some KHC down payment assistance options are reserved for first-time buyers, but others are available to repeat buyers who
meet the income, credit, and property criteria.
Do Louisville sellers help with closing costs?
Yes. With FHA, sellers can typically pay up to 6% of the purchase price toward closing costs and prepaids. Conventional,
VA, and USDA also allow seller contributions within their own limits. Properly structuring your offer can significantly reduce your cash
needed at closing.
Is it still possible to buy with zero down in or around Louisville?
Yes. Eligible veterans and active-duty borrowers can use VA loans with no down payment. Many areas just outside Louisville
qualify for USDA zero-down financing. In some scenarios, KHC down payment assistance can also help you
cover the minimum down payment on FHA or conventional loans.
What credit score do I need to buy a home in Louisville, Kentucky?
Every situation is unique, but as a general rule:
Many FHA lenders look for scores at or above 580+.
USDA and KHC DAP are often more comfortable starting around 620+.
VA loans can sometimes approve with lower scores when residual income and overall file strength are solid.
If you are not there yet, a targeted credit improvement strategy can often get you into qualifying range faster than you might expect.
Watch: Louisville First-Time Home Buyer Programs Explained (Video)
Prefer to watch a quick breakdown instead of reading? In this short video, I walk through FHA, VA, USDA, and KHC options for Louisville
first-time home buyers and explain how to choose the right fit.
Ready to See Which Louisville Kentucky First-Time Home Buyer Program Fits You?
You don’t have to guess which combination of FHA, VA, USDA and KHC down payment assistance is best for your situation.
I will run the numbers side by side for you, including estimated payments, total cash to close, and long-term savings.
Once I have your basic information and documents, we can typically issue a strong pre-approval in as little as 24–48 hours on most files,
so you can shop with confidence in the Louisville market.
Joel Lobb – Mortgage Broker, FHA, VA, USDA, KHC, Fannie Mae
EVO Mortgage • Helping Kentucky Homebuyers Since 2001
NMLS #57916 | Company NMLS #1738461
Equal Housing Lender •
www.nmlsconsumeraccess.org
This is not a commitment to lend. All loans are subject to credit approval, acceptable collateral, and program guidelines. Terms and
conditions are subject to change without notice.
Applications for this program will reopen on Monday, July 18.
The Louisville Metro Down Payment Assistance Program provides low- to moderate-income homebuyers with down payment and closing cost assistance for purchasing a home in the Louisville Metro area. Funds can be applied to the purchase of an existing or newly constructed home and are NOT limited to first-time homebuyers.
Down Payment Assistance is in the form of a partially forgivable loan with 0% interest. Homebuyers must occupy the purchased home as their primary residence for a period of 5 – 15 years, depending upon the amount of assistance received. By the end of that specified period, 50% of the loan shall be forgiven. The remaining balance is not due until the sale of that home. The maximum amount of assistance per homebuyer will be no more than 20% of the purchase price, but also based on the need the individual buyer. Section 8 Homeownership clients are encouraged to apply.
Goals of the Down Payment Assistance Program
Encourage homeownership, throughout Louisville Metro, which is economical to low-moderate income consumers in order to assist in preventing future foreclosures.
Encourage mixed-income neighborhoods and the de-concentration of poverty.
Encourage homeownership in Metro’s Neighborhood Revitalization Strategy Area – Russell.
Assist homebuyers in becoming informed consumers in order to successfully navigate real estate transactions and understand the responsibility of homeownership.
Encourage reinvestment in Louisville Metro’s vacant and abandoned properties.
Eligibility
Household income at or below 80% of the area median income.
Persons in Household
1
2
3
4
5
6
80% AMI
$47,450
$54,200
$61,000
$67,750
$73,200
$78,600
Homebuyer(s) already pre-approved for a mortgage from a local financial institution.
Homebuyer(s) credit - no unpaid collections, past due balances or un-discharged bankruptcies. (Exception: Medical collections up to $10,000.00.)
Homebuyer(s) has at least $1,500 in savings.
Homes eligible for assistance must meet the Home Ownership Value Limits below.
Existing Homes
1-unit
2-unit (duplex)
3-unit (triplex)
4-unit (fourplex)
$220,000
$249,000
$302,000
$374,000
New Homes
1-unit
2-unit (duplex)
3-unit (triplex)
4-unit (fourplex)
$257,000
$329,000
$399,000
$494,000
How to Apply
Complete homebuyer counseling (6-hr minimum) from a HUD-approved counseling agency. If applying with co-applicant, both must complete. Married couples must apply as co-applicants.
Apply to the Down Payment Assistance Program by clicking the green button below. Please allow 30 days for Metro review and verification.
Homebuyer(s) receives letter of eligibility, stating entrance or denial into Homebuyer Assistance Program.
Homebuyer(s) engages Realtor to assist in home search.
Upon an accepted sales contract, homebuyer(s) submits Home Purchase Packet, executed sales contract, and primary loan documents to Metro.
Metro staff underwrites the loan and presents to the Case Review Board.
Homebuyer(s) receives conditional commitment letter from Metro, stating the amount of assistance available to purchase that home.
Metro Office of Housing inspector coordinates with Realtor. Home must receive a passing inspection in order to receive Metro assistance.
Lender, Realtor, and Metro coordinate with the homebuyer to close on the home.
LOUISVILLE, Ky. Low to moderate-income homebuyers in the Louisville Metro who are seeking assistance with down payments and closing costs can now apply for the city’s Down Payment Assistance Program.
Applications for the program reopened on July 18 for the purchase of an existing or newly constructed home, according to Louisville Metro Government.
A release states program funds are not limited to first-time homebuyers.
The funds will be used as a partially-forgivable loan with 0% interest, where homeowners will need to occupy their purchased home for a period of five to 15 years.
Following that period, 50% of the loan will be forgiven, and the rest of the balance will not be due until the sale of the home.
Officials said the Down Payment Assistance Program encourages home ownership in the Louisville Metro and assisting potential homebuyers in making real estate transactions to understand the responsibilities of homeownership.
The program is available to residents with a household income at or below 80% of the area median income, homebuyers who are already pre-approved for a mortgage and have no unpaid collections or past due balances on their credit.
620 credit score or higher needed for this loan program. 4 years removed from bankruptcy minimum sometime longer. Private mortgage insurance required for over 80% loan to value on a refinance or down payments less than 20%. Tighter debt to income requirements with max back-end-ratio usually not over 45% with less than 20% down payment. Easier on properties to qualify if they have deferred maintenance or need some fixing up to pass Government standards like FHA, VA, USDA loans.
Down payment requirements are as little as 3% down payment. Better rates and lower mortgage insurance with a larger down payment and pmi is not for life of loan.
This is for stronger borrowers with good credit (above 680 or 720) and at least 3-5% down payment with no foreclosures or bankruptcies in he last 4-7 years. Can go higher on the loan amount too versus FHA. Max loan in Kentucky for 2020 for conventional loans is $510,000.
Home Possible Advantage Product Highlights:
Up to 97% LTV for Purchase and for Rate Term Refinances of 1-unit properties
CLTV max 97% for purchase unless the second mortgage meets FHLMC Affordable Seconds Guidelines for a max of 105%
Minimum Credit Score of 620 Required
Accept/Eligible LP AUS Findings
Max DTI allowed per AUS Findings
Lower Mortgage Insurance coverage requirements for LTV's of 90.001% - 97% (25%) compared to standard Fannie product (30-35%)
Borrowers may not own any other real estate at closing
1 unit principal residences, including eligible condos and PUDs, 2-4 unit principal residences
Homeownership Education:
At least one Borrower must participate in a homeownership education program before the Note Date in each of the following instances:
For purchase transaction Home Possible® Mortgages when all Borrowers are First-Time Homebuyers
Homeownership education must not be provided by an interested party to the transaction, the originating lender or by the Seller.
Homeownership education programs may use different formats and require different lengths of time to complete. The following are acceptable:
Programs developed by HUD-approved counseling agencies, Housing Finance Agencies (HFAs) or Community Development Financial Institutions (CDFIs)
Programs developed by mortgage insurance companies
Programs that meet the standards of the National Industry Standards for Homeownership Education and Counseling (www.homeownershipstandards.com)
Income Eligibility:
Borrowers must meet income limits for program eligibility. Income limits will be checked by LP.
Gift funds and grants. Affordable Seconds are allowed.
Find additional information regarding Affordable Seconds in the Freddie Mac Seller guide section 4204.2
Non-Occupant Borrowers:
Not permitted. All borrowers must occupy the subject property as their primary residence.
Mortgage Insurance:
Monthly, borrower-paid or single premium LPMI are allowed. At this time, borrower paid singles, split premiums, lender paid monthly premiums and lowest cost/custom MI are not allowed.
25% MI coverage for LTVs 90.001 - 97%
Standard MI coverage for LTVs of 90% or less. (Reduced MI not permitted)
Other Income:
Border income (relatives or non-relatives): Up to 30% of qualifying income, must document at least 9 of the last 12 months of payment (will be averaged over 12 months and must document proof of shared residence for the 12 month period.
Accessory Unit - Rental income from an accessory unit may be used in qualifying income per rental income guidelines
2-Unit Rental income from the other units of the subject property may be used per rental income guidelines.
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
, NMLS ID# 57916, (www.nmlsconsumeraccess.org). I lend in the following states: Kentucky
Current Guidelines for Louisville Kentucky Mortgage programs including FHA, VA, KHC, USDA, and Fannie Mae Home Loans in the State of Kentucky NMLS# 57916 http://www.mylouisvillekentuckymortga... 502-905-3708
