2026 Kentucky Homebuyers Guide: Getting Approved for a Mortgage Loan in Kentucky

If you’re a Kentucky homebuyer, this updated 2026 guide walks you through the mortgage approval process from start to finish.

Whether you are buying your first home or your next home, this resource covers FHA, VA, USDA, KHC loans, down payment assistance, and available grants.

You’ll also find clear guidance on credit scores, income limits, debt-to-income ratios, work history, appraisals, inspections, bankruptcy, foreclosure rules, and realistic closing timelines.

Zero Down Payment Options for Kentucky Homebuyers in 2026

Kentucky continues to offer multiple paths to homeownership with little to no money down:

Kentucky Housing Corporation (KHC) loans

FHA loans paired with down payment assistance

VA loans for eligible veterans and active-duty service members

USDA Rural Housing loans

Federal Home Loan Bank Welcome Home Grant (when available)

Each program has different eligibility rules. The sections below break them down clearly.

Kentucky FHA Loan With KHC Down Payment Assistance

Kentucky Housing Corporation continues to offer FHA-insured loans paired with down payment assistance for qualified buyers.

Credit score: Typically 620 minimum for FHA, 660 for conventional options through KHC

Down payment: 3.5 percent (can be fully or partially offset with KHC DAP)

Income limits: Vary by county and household size See current KHC income and purchase price limits

Debt-to-income ratio: Commonly up to 50 percent depending on findings

Work history: Two years of stable, documented income

KHC Down Payment Assistance (DAP)

Most programs offer up to $12,500, repayable over 15 years. Funds may be used for down payment, closing costs, prepaid taxes, insurance, and interim interest. Program terms are subject to annual updates.

FHA Loans in Kentucky – 2026 Guidelines

FHA loans remain one of the most flexible mortgage options in Kentucky, especially for buyers with limited savings or lower credit scores.

Credit score options:

580 and higher with 3.5 percent down

500 to 579 with 10 percent down

Debt-to-income ratio: Frequently approved up to 56.99 percent with strong compensating factors

Work history: Two years of consistent income; job changes are acceptable if income is stable

Bankruptcy and foreclosure waiting periods:

Chapter 7 bankruptcy: Two years

Chapter 13 bankruptcy: Eligible after 12 months of on-time payments with court approval

Foreclosure: Three years

Kentucky FHA Loan Limits for 2026

FHA loan limits increased again for 2026 due to rising home values.

One-unit: $541,287

Two-unit: $693,750

Three-unit: $838,450

Four-unit: $1,041,750

Kentucky VA Loans for Veterans and Active Duty

VA loans remain one of the strongest mortgage benefits available, offering zero down payment and no monthly mortgage insurance.

Certificate of Eligibility (COE) is required. Request your COE here

Credit score: No official minimum, most lenders prefer 580–620

Income: Must be stable and sufficient

Work history: Two years or military service continuity; post-service employment should align with MOS when applicable

Debt-to-income ratio: Flexible, subject to residual income requirements

Bankruptcy or foreclosure: Two-year waiting period

USDA Rural Housing Loans in Kentucky

USDA loans provide 100 percent financing for eligible rural properties across much of Kentucky.

Credit score: 640 for automated approval through GUS; manual underwriting available below 640

Income limits for 2026:👇👇

Check Kentucky USDA property eligibility

Debt-to-income ratio: 32 percent front-end, 45 percent back-end

Work history: Two years of stable income

Kentucky Down Payment Assistance and Grants – 2026 Update

The Welcome Home Grant through the Federal Home Loan Bank of Cincinnati is expected to return in March 2026. Exact grant amounts, income limits, and funding caps are announced shortly before release.

Historically, grants have offered up to $25,000 for eligible veterans and up to $20,000 for other qualified buyers. Funds are limited and typically exhausted quickly.

Ready to Get Started

Buying a home in Kentucky does not have to be confusing. With the right loan program and guidance, FHA, VA, USDA, and KHC options can make homeownership achievable in 2026.

For personalized guidance, contact:

Joel Lobb
Mortgage Loan Officer
Phone or Text: 502-905-3708
Email: kentuckyloan@gmail.com
Website: https://www.mylouisvillekentuckymortgage.com

EVO Mortgage
Company NMLS 1738461
Individual NMLS 57916

🏡 Which Home Loan Is Right for You in Kentucky?

When it comes to buying a home in Kentucky—whether you're in Louisville, Lexington, Bowling Green, or a rural community—choosing the right mortgage loan can make or break your homeownership journey. With so many loan options available, it’s crucial to understand the differences between FHA, VA, USDA, and Conventional loan programs.

✅ Conventional Loans

Best for: Borrowers with excellent credit and stable income
Minimum Credit Score: 620 (680+ preferred)

• Competitive interest rates for strong-credit borrowers
• 3%–20% down payment options
• Available for primary, secondary, and investment properties
• No income or location restrictions

✅ FHA Loans

Best for: First-time homebuyers or those with less-than-perfect credit
Minimum Credit Score: 580 with 3.5% down (500 with 10% down)

• Flexible credit and income guidelines
• Low down payment (3.5%)
• Higher allowable debt-to-income ratios
• Seller concessions up to 6% allowed

✅ USDA Rural Housing Loans

Best for: Low-to-moderate income buyers in eligible rural or suburban Kentucky areas
Minimum Credit Score: 640 (for GUS approval)

• 100% financing (zero down)
• No monthly PMI
• Low interest rates and fees
• Income and location eligibility required

✅ VA Loans

Best for: Veterans, active-duty service members, and eligible spouses
Minimum Credit Score: 580–620 (varies by lender)

• 100% financing with no down payment
• No monthly mortgage insurance (PMI)
• Flexible credit and DTI requirements
• Must provide a Certificate of Eligibility (COE)

📊 Home Loan Comparison Chart

Loan Type	Credit Flexibility	Down Payment	Income Limits	Geographic Restrictions
FHA	✔ More forgiving	3.5%	❌ None	❌ None
VA	✔ Flexible	0%	❌ None	❌ None
USDA	⚠ Moderate	0%	✔ Yes	✔ Yes
Conventional	❌ Stricter	3%–20%	❌ None	❌ None

💬 Ready to Buy a Home in Kentucky?

Whether you're a first-time buyer, a veteran, or relocating to rural Kentucky, choosing the right loan starts with the right guidance. I’m Joel Lobb, a mortgage broker with over 20 years of experience helping Kentucky families navigate their path to homeownership.

➡️ Apply for your Kentucky mortgage now

📞 Call/Text: (502) 905-3708
📧 Email: kentuckyloan@gmail.com
🏢 Office: 911 Barret Ave., Louisville, KY 40204

---

Disclosures:
Joel Lobb, Senior Loan Officer – Evo Mortgage Company NMLS# 1738461 Personal NMLS# 57916
Equal Housing Lender. Licensed to originate mortgage loans in Kentucky only.
Information subject to change without notice and based on credit approval.

What is the difference between Conventional, FHA and VA Mortgage loans in Kentucky

 

Conventional vs. FHA vs. VA loans in Kentucky

 I will outline below the credit score, loan limits, down payment and mortgage insurance requirements for FHA, VA and Conventional Mortgage Loans in Kentucky!

			Upfront funding fee of 1.4% to 3.6%

Mobile Home Loan Guidelines for Kentucky: FHA, VA, USDA, and Conventional Loans

Manufactured home properties are often more affordable than standard single-family homes, making them an attractive option for many prospective buyers. Whether you're a first-time homebuyer or looking to refinance, there are financing options for manufactured homes through FHA, VA, USDA, and Conventional loan programs.

Important Guidelines for Manufactured Home Mortgages in Kentucky

Before diving into specific loan programs, it's essential to understand two critical requirements that apply to almost all manufactured home loans in Kentucky:

Permanent Foundation: The manufactured or mobile home must be on a permanent foundation. This means the home must be permanently affixed to the land with proper structural supports, meeting local building codes. Read more here what constitutes a permanent foundation ➡️https://www.huduser.gov/portal/Publications/PDF/foundation_guide_complete.pdf

Single Relocation: The home must have only been moved once, from the factory or dealership to the permanent site. Homes that have been relocated more than once typically do not qualify for financing.

Keeping these two key factors in mind will significantly improve your chances of securing a mortgage loan for a manufactured home.

Here's a detailed look at the requirements and guidelines for each program:

FHA Manufactured Home Loans

Minimum Credit Score: 500 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase or Rate-Term up to 96.5% LTV; Cash Out up to 80% LTV

Manual Underwrites: Allowed

Additional Requirements:

Real Property Conversion required at closing

Home must be your primary residence

Property cannot have been previously installed or occupied at another site

Age of Home: Home must have been constructed after June 15, 1976

USDA Manufactured Home Loans

Minimum Credit Score: 550 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase up to 100% LTV

Manual Underwrites: Required; Maximum Debt-to-Income (DTI) ratio is 29/41

Additional Requirements:

Home must be located in a USDA-eligible rural area

Real Property Conversion required at closing

Home must be a 2006 model or newer

Property cannot have been previously installed or occupied at another site

Must be your primary residence 

You cannot do not a mobile home loan on a USDA loan in Kentucky --Only available  in select pilot States and Kentucky is not in that program

VA Manufactured Home Loans

Minimum Credit Score: 500 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase or Rate-Term up to 100% LTV; Cash Out up to 80% LTV

Manual Underwrites: Allowed

Additional Requirements:

Real Property Conversion required at closing

Property can be previously installed or occupied at another site

Must be your primary residence

Age of Home: Home must have been constructed after June 15, 1976

Conventional Manufactured Home Loans

Minimum Credit Score: 620 qualifying FICO score

Eligible Property Types: Singlewide, Doublewide, and Triplewide units

Loan-to-Value (LTV): Purchase or Rate-Term up to 95% LTV; Cash Out up to 65% LTV

Additional Requirements:

Real Property Conversion required at closing

Home must have been constructed after June 15, 1976

Property cannot have been previously installed or occupied at another site

Primary and second homes allowed

Why Choose a Manufactured Home Loan?

Manufactured homes offer a cost-effective alternative to traditional housing, with modern designs and layouts that meet the needs of today's homeowners. With these flexible loan options, Kentucky homebuyers have access to financing programs tailored to manufactured housing.

Whether you’re looking for a low credit score option, zero money down, or a loan for a primary or secondary residence, these programs cater to a variety of financial situations.

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans

 Website: www.mylouisvillekentuckymortgage.com
 Address: 911 Barret Ave., Louisville, KY 40204

---

Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

Fannie Mae Changes Down Payment Requirements on 2-4 unit property to 5% down payment on Conventional Loans

 Fannie Mae is making a big change to its loan guidelines. On November 18, 2023, the maximum LTV ratio for two- to four-unit principal residence purchase and limited cash-out transactions will increase to 95%. 

This means that borrowers can now put down as little as 5% on a two- to four-unit property, making it easier for them to buy a home or investment property. 

Here's what you need to know:

This change applies to loans that are submitted or resubmitted to Fannie Mae's Desktop Underwriter (DU) on or after the weekend of November 18, 2023. 🗓

This change does not apply to high-balance mortgage loans or loans that are manually underwritten.

This is a great opportunity for those who are looking to buy a two- to four-unit property.