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.

For more details on FHA in Kentucky, visit: Kentucky FHA Loan Requirements and Guidelines .

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

To learn more about VA options in Kentucky, visit: Louisville & Kentucky VA Home Loan Lender Information .

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.

For USDA guidelines and current income limits, see: Kentucky USDA Zero-Down Home Loan Program and 2026 Kentucky USDA Rural Housing Income Limits .

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 15 years up to $12,500 at 4.75$ rate in the form of a second mortgage
• 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.

For current KHC DPA amounts and requirements, visit: Kentucky Housing Corporation Down Payment Assistance (KHC DAP) .

Income, Credit & Purchase Price Guidelines

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 620+ scores for assistance.

For a deeper dive on credit scores specifically, see: Minimum Credit Score Needed to Buy a Home in Kentucky .

You can also review a statewide summary at: Kentucky First-Time Home Buyer Programs Overview .

Mortgage Pre-Approval Documents for Louisville Buyers

A strong pre-approval helps you negotiate with confidence and shows Louisville sellers that you are serious and ready. Most buyers are asked for:

• Most recent 30 days of pay stubs
• W-2s for the last two calendar years
• Most recent 30 days of bank statements (all pages for checking and savings)
• Statements for 401(k) or retirement accounts, if applicable
• Driver’s license and authorization for a credit review

For a full checklist, visit: Documents Needed for a Mortgage Loan Approval in Kentucky .

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.

Next steps:

• Call or text: 502-905-3708
• Email: kentuckyloan@gmail.com
• Start online: Click here to start your secure mortgage application

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.

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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.

What is an FHA Loan and Is It Right for You?

Last Updated: 2026 – Kentucky FHA Loan Guidelines, Limits, and Requirements Reviewed for Accuracy

Kentucky FHA Loans in 2026: What Is an FHA Loan and Is It Right for You?

An FHA loan is a government-backed mortgage insured by the Federal Housing Administration. FHA loans in Kentucky remain one of the most flexible mortgage options for buyers who may not qualify for conventional financing due to credit challenges, limited savings, or higher debt-to-income ratios.

Because FHA loans are insured by the federal government, approved lenders can offer more forgiving qualification standards while still managing risk.

External reference: What is an FHA Loan and Is It Right for You?

FHA Loan Requirements in Kentucky (2026)

• Minimum credit score: 580 for 3.5% down
• 500–579 credit scores may qualify with 10% down (lender overlays apply)
• Debt-to-income ratios allowed up to 56.99% with strong compensating factors
• Stable, verifiable income required
• Mortgage insurance is mandatory on all FHA loans

What Can an FHA Loan Be Used For?

• Single-family homes
• FHA-approved condominiums
• 2–4 unit properties (owner-occupied)
• Manufactured homes meeting FHA standards
• Renovation loans (203k)
• New construction with approved builders

Kentucky FHA Loan Limits

FHA loan limits vary by county and are updated annually.

View current Kentucky FHA loan limits by county

FHA Mortgage Insurance Explained

• Upfront mortgage insurance premium: 1.75% (usually financed)
• Annual mortgage insurance: typically 0.45%–1.05%
• Mortgage insurance often lasts for the life of the loan

Pros and Cons of FHA Loans in Kentucky

Advantages include lower down payments, flexible credit requirements, and compatibility with Kentucky down payment assistance programs. Disadvantages include mandatory mortgage insurance and stricter property condition standards.

Applying for a Kentucky FHA Loan

You must work with an FHA-approved lender and provide documentation such as income verification, bank statements, and authorization to pull credit. Some documentation may be retrieved electronically by your lender.

Explore Other Kentucky Mortgage Programs

• Kentucky FHA Loan Guide
• Kentucky USDA Rural Housing Loans
• Kentucky VA Home Loans for Veterans
• Kentucky First-Time Homebuyer Programs

Kentucky Credit Score Requirements for Mortgage Approval – FHA, VA, USDA, Fannie Mae & KHC

Thinking about buying or refinancing a home in Kentucky and wondering what credit score you need? Your credit score is one of the key factors lenders look at when deciding whether to approve your mortgage and what interest rate to offer.

As a Kentucky mortgage loan officer who has helped over 1,300 families across the state, I work every day with first-time homebuyers, repeat buyers and homeowners looking to refinance using programs like FHA, VA, USDA Rural Housing, Conventional (Fannie Mae) and Kentucky Housing Corporation (KHC) down payment assistance.

This guide breaks down typical credit score benchmarks for Kentucky mortgage approvals and explains what you can do if your scores are not quite where you want them yet.

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Why Your Credit Score Matters for a Kentucky Mortgage

When you apply for a mortgage in Kentucky, the lender pulls your credit from the three major bureaus and uses your middle score (or the lower middle score if there is more than one borrower).

Your credit score helps the lender evaluate:

• How likely you are to pay on time
• Your history of managing credit cards, auto loans and other accounts
• How much total debt you are carrying compared to your limits
• Past issues like collections, charge-offs, bankruptcies or foreclosures

Important: There is no single “magic number” that approves or denies every Kentucky mortgage. Each program has its own guidelines, and many lenders add their own internal rules, called “overlays.” Your income, debt-to-income ratio (DTI), job stability and property type all matter too.

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Typical Credit Score Minimums by Loan Type in Kentucky

Below are common credit score benchmarks used by many lenders for Kentucky borrowers. These are general guidelines and can change based on lender, market conditions and your overall profile.

Loan Type	Typical Minimum Credit Score	Notes for Kentucky Borrowers
FHA (Federal Housing Administration)	580+ for 3.5% down 500–579 possible with 10% down (lender approval required)	Very popular with first-time homebuyers and buyers with limited down payment or past credit issues.
VA (Department of Veterans Affairs)	No official VA minimum; many lenders look for 580–620+	For eligible Veterans, Active Duty, Reservists and some surviving spouses. No monthly PMI and flexible guidelines.
USDA (Rural Housing)	Often 620–640+ for automated approval	$0 down for eligible rural areas in Kentucky. Lower scores may require more documentation and manual underwriting.
Conventional (Fannie Mae/Freddie Mac)	Generally 620+ minimum	Stronger scores (680–740+) can mean better interest rates and easier approval, especially with lower down payments.
Kentucky Housing Corporation (KHC)	Varies by program; many options start around 620+	Often paired with FHA, VA, USDA or Conventional loans for down payment and closing cost assistance for Kentucky homebuyers.

Note: These are typical ranges only. Final approval depends on full underwriting and your complete financial profile.

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How Your “Qualifying” Mortgage Credit Score Is Calculated

When you apply, your lender orders a tri-merge mortgage credit report from:

• Experian
• Equifax
• TransUnion

For most Kentucky mortgages, the lender uses the middle score of the three bureaus as the “qualifying” score. If there are two borrowers, the lender usually uses the lower of the two middle scores.

Example:

• Borrower A: 598, 625, 604 → Qualifying score = 604
• Borrower B: 640, 659, 652 → Qualifying score = 652

If both apply together, the lender may qualify the file off the lower middle score, in this example 604.

Also keep in mind: mortgage lenders often use older FICO models (not the same as many “free” credit score apps), so your lender’s scores can look different from what you see on a credit monitoring website.

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FHA Credit Score Requirements in Kentucky

FHA loans are a go-to option for many Kentucky first-time home buyers because they allow for lower down payments and more flexible credit guidelines than many conventional loans.

• 580+ credit score: You may qualify for the minimum 3.5% down payment, subject to full underwriting.
• 500–579 credit score: FHA will technically allow financing with at least 10% down, but many lenders set higher internal minimums. Expect a case-by-case review and stricter conditions.
• Below 500: Usually not eligible for FHA financing. Work on credit repair first, then re-apply.

FHA also looks closely at your recent 12–24 month payment history, especially for any mortgage or rent, auto loans and major revolving accounts.

For more in-depth FHA information, you can also review my Louisville FHA guide here:
Louisville Kentucky First-Time Home Buyer FHA & KHC Programs

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VA Credit Score Guidelines for Kentucky Veterans

The VA itself does not publish a strict minimum credit score. Instead, lenders set their own tolerances based on risk, experience and market conditions.

In practice for Kentucky VA home loans:

• Many lenders look for 580–620+ as a baseline.
• Stronger income, solid recent payment history and low DTI can help offset borderline scores.
• Past credit events (bankruptcy, foreclosure, short sale) may require seasoning time and compensating factors.

VA loans can be extremely powerful tools for eligible buyers: no down payment in most cases, no monthly PMI, and flexible guidelines when structured properly.

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USDA Rural Housing Credit Score Expectations in Kentucky

USDA Rural Development (Rural Housing) loans offer true $0 down financing in many areas of Kentucky. Because there is no down payment, lenders pay close attention to credit history and income stability.

Typical USDA score expectations:

• 640+: Often qualifies for automated underwriting approval (GUS Accept), assuming the rest of the file is strong.
• 620–639: May still be possible, but more documentation or a manual underwrite could be required.
• Below 620: Case-by-case basis. Expect more scrutiny and a need for strong compensating factors like low DTI and reserves.

If you want to check whether a property might be USDA-eligible, you can start with my Kentucky USDA map and eligibility tools here:
Check if a Kentucky Property Is in a USDA Eligible Area

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Conventional (Fannie Mae/Freddie Mac) Credit Score Benchmarks

Conventional loans backed by Fannie Mae or Freddie Mac usually require a stronger credit profile than FHA, VA or USDA.

• 620+: Common minimum score for many lenders.
• 660–679: Often required for certain products, lower down payments or riskier profiles.
• 680–740+: Typically qualifies for more favorable pricing, especially with smaller down payments.

If you are trying to refinance out of FHA into a Conventional loan to remove mortgage insurance, or you want to pair a Conventional loan with KHC down payment assistance, your credit score can make a noticeable difference in interest rate and closing cost options.

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How KHC (Kentucky Housing Corporation) Looks at Credit

Kentucky Housing Corporation (KHC) does not lend money directly to consumers, but it partners with approved lenders (like us) to provide down payment assistance and special programs.

In general:

• Many KHC programs start around 620+ credit scores, depending on the specific product and loan type (FHA, VA, USDA, Conventional).
• KHC overlays may be stricter than the underlying FHA/VA/USDA/Conventional guidelines in some areas.
• Higher scores help with pricing, underwriting approval and access to more assistance options.

If you are a first-time homebuyer in Kentucky and need help with down payment or closing costs, we can review which KHC options fit your credit profile and income.

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Refinancing vs. Purchasing: Does the Credit Score Requirement Change?

For most programs, the credit score ranges are similar whether you are purchasing or refinancing. However, the purpose of the refinance can matter:

• Rate-and-term refinance: Often similar credit score and DTI guidelines as a purchase.
• Cash-out refinance: Usually requires higher scores and more equity, especially for Conventional and VA cash-out.
• Streamline refinances (FHA, VA IRRRL, etc.): May have more flexible credit documentation but still require a review of payment history and risk.

If you already own a home in Kentucky and want to lower your payment, shorten your term, or remove mortgage insurance, we can run side-by-side refinance scenarios based on your current scores.

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5 Practical Ways to Improve Your Credit Before Applying

If your credit score is close to the cutoff, even a small improvement can open up better loan options and interest rates. Here are five practical steps:

1. Pull and review your credit reports. Check Experian, Equifax and TransUnion for errors, duplicates or old derogatory items that should have fallen off.
2. Lower your credit card balances. Try to keep utilization under 30% of your limits on each revolving account – lower is better.
3. Avoid new loans or major purchases. Hold off on buying vehicles, furniture or opening new credit cards right before applying for a mortgage.
4. Make every payment on time. A single 30-day late payment can drop scores and trigger underwriting issues.
5. Talk to a Kentucky loan officer early. A customized credit review can show you which actions will give you the biggest boost toward mortgage approval.

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Next Steps: Talk Through Your Kentucky Mortgage Credit Plan

Every borrower’s story is different. Two people can have the same credit score but very different credit histories and approval paths.

If you are:

• A first-time homebuyer in Kentucky
• Looking to refinance your current home loan
• A Veteran or active-duty service member considering a VA loan
• Buying in a rural area and exploring USDA Rural Housing
• Interested in KHC down payment assistance

…I can help you review your credit, run loan scenarios and design a practical plan to get you approved.

Call or text: 502-905-3708
Email: kentuckyloan@gmail.com

Serving homebuyers and homeowners across all 120 counties in Kentucky.

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Frequently Asked Questions About Kentucky Mortgage Credit Scores

What is the minimum credit score for an FHA loan in Kentucky?

Many lenders in Kentucky look for a 580+ credit score to qualify for the 3.5% minimum down payment on an FHA loan. Scores between 500 and 579 may be considered with at least 10% down, but approval is more difficult and not all lenders will allow it.

Can I get a Kentucky mortgage with a credit score below 580?

It can be possible, but options are limited. Some FHA and VA lenders may consider scores in the 500–579 range with stronger down payment, low debt-to-income ratio and clean recent payment history. In many cases, it is more effective to spend a few months improving your credit and then apply.

What credit score do I need for a VA loan in Kentucky?

The VA does not publish a hard minimum score, but many Kentucky lenders prefer 580–620+. Stronger scores can mean better terms, especially if you have prior credit challenges.

What credit score is required for a USDA Rural Housing loan in Kentucky?

USDA loans often work best with scores of 640 or higher for automated approval. Lower scores may still be considered, but expect more documentation, a manual underwrite and tighter qualification standards.

How can I improve my score quickly before applying for a Kentucky mortgage?

Common fast-impact steps include paying down credit card balances, bringing any past-due accounts current, avoiding new inquiries and disputing any obvious errors on your report. A targeted review with a Kentucky loan officer can help you focus on the items that will move your score the most.

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Disclaimer: This information is for educational purposes only and does not constitute a commitment to lend. Program guidelines, credit score requirements and underwriting standards are subject to change without notice. All loans are subject to credit approval, income verification, acceptable collateral and program availability.

NMLS #57916  |  Company NMLS #1738461  |  Equal Housing Lender

Kentucky FHA Mortgage Information

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky FHA Mortgage Information: 

 How to Qualify For a Kentucky FHA Mortgage Loan 1. Low Down Payment   –  FHA Mortgage Loans only require a 3.5% down payment. And what m...

Kentucky FHA Mortgage Changes for 2025 Kentucky Home Buyers

🏠 Kentucky FHA Mortgage Loans

Expert Kentucky FHA Lending with 20+ Years Experience

Helping Kentucky Families Achieve Homeownership Since 2003

🔥 NEW: 2025 FHA Appraisal Updates in Effect!

June 27, 2025: HUD released Mortgagee Letter 2025-18 with streamlined FHA appraisal requirements. Faster approvals, less paperwork, and better alignment with conventional loans!

🎯 Top 5 Reasons Kentucky Families Choose FHA Loans

💰

Low Down Payment

Just 3.5% down payment required - much lower than conventional loans

📊

Flexible Credit

Minimum 580 credit score for 3.5% down, 500-579 for 10% down

🤝

Seller Paid Closing Costs

Sellers can contribute up to 6% toward your closing costs

💼

Flexible Income

Various income sources accepted with proper documentation

💑

Qualify Without Spouse

Can qualify individually even if spouse has poor credit

🆕 What's New: 2025 FHA Appraisal Changes

HUD's latest updates make FHA loans even more attractive for Kentucky homebuyers:

• 🚫 Eliminated: Remaining Economic Life requirements for appraisers
• 📷 Streamlined Photos: No more attic or crawl space photos required
• 📊 Fewer Comps: Reduced comparable sales requirements in dynamic markets
• ⚡ Faster Process: Quicker appraisal turnaround times
• 🎯 Better Consistency: Closer alignment with conventional loan standards

💡 What This Means for You

These changes make FHA loans more competitive in Kentucky's fast-moving real estate market. Your FHA offer can now compete more effectively with conventional financing, especially when combined with our available down payment assistance programs!

📋 Kentucky FHA Loan Requirements

Requirement	Details
Credit Score	580+ for 3.5% down | 500-579 for 10% down
Down Payment	3.5% minimum (can be gifted from family or qualified sources)
Co-Signer	Yes - non-occupying co-borrowers allowed to help qualify
Debt-to-Income	Typically 43% or less (higher with strong compensating factors)
Employment	2 years steady work history (fixed income sources accepted)
CAIVRS	Must have clear CAIVRS (no outstanding federal debt)
Property Types	Single family, condos, 2-4 unit properties, manufactured homes
Mortgage Insurance	Required for all FHA loans - based on loan-to-value and term (not credit score or DTI like conventional PMI)

💰 Kentucky FHA Loan Limits (2025)

Maximum FHA Loan Amounts by County

The maximum FHA loan amount varies by county in Kentucky. Current limits include:

• Base Limit: $524,225
• Mid-Range Counties: $671,200
• Higher Cost Areas: $811,275
• Highest Limit Counties: $1,008,300

Maximum Financing: 97.75% of appraised value or sales price (whichever is lower)

Contact me for specific loan limits in your Kentucky county - limits vary by location. I'll help you determine the exact limit for your area.

🏡 Available Kentucky FHA Loan Types

Purchase Loans

• FHA Purchase: Buy your primary residence with just 3.5% down
• FHA + KHC: Combine with Kentucky Housing Corporation down payment assistance

Refinance Options

• Rate/Term Refinance: Lower your rate or change loan terms
• Cash-Out Refinance: Access your home's equity for renovations, debt consolidation
• FHA Streamline: Quick refinance for existing FHA borrowers (no appraisal needed)

✅ Pros and Cons of FHA Loans

✅ Advantages

• Low 3.5% down payment
• Flexible credit requirements
• Competitive interest rates
• Down payment can be gifted
• Seller can pay closing costs
• Available after bankruptcy/foreclosure
• No prepayment penalties

⚠️ Considerations

• Mortgage insurance required
• Primary residence only
• Loan limits apply
• Property must meet FHA standards
• Upfront mortgage insurance premium

🕐 Waiting Periods After Financial Events

Event	Standard Waiting Period	With Extenuating Circumstances
Chapter 7 Bankruptcy	4 years	2 years
Chapter 13 Bankruptcy	2 years from discharge	1 year with court approval
Foreclosure	3 years	3 years (with conditions)
Short Sale/Deed-in-Lieu	3 years	2 years

🎁 Kentucky Down Payment Assistance Available

Kentucky Housing Corporation (KHC) Programs

We still have down payment assistance available through KHC programs for qualified Kentucky first-time homebuyers. These funds can significantly reduce your upfront costs and make homeownership more accessible.

Program Benefits:

• Up to $10,000 in KHC down payment assistance
• 5% grant available for qualified borrowers
• Below-market interest rates
• Can be combined with FHA loans
• Income and purchase price limits apply

🚀 Ready to Get Your Kentucky FHA Loan Started?

Over 20 Years Experience | 1,300+ Kentucky Families Helped

Let me guide you through the new 2025 FHA guidelines and find the best loan program for your situation. Free pre-approval with same-day decisions!

📞 Call/Text
(502) 905-3708

📧 Email
kentuckyloan@gmail.com

🌐 Website
KentuckyFHALoan.com

📍 Office
911 Barret Ave.
Louisville, KY 40204

📞 Get Free Pre-Approval 📧 Ask Questions

Joel Lobb - Kentucky Mortgage Loan Officer
NMLS #57916 | EVO Mortgage - NMLS #1738461

Important Disclosures:

• Equal Housing Lender - All loan programs subject to credit approval
• Rates and terms subject to change without notice
• Visit NMLS Consumer Access for licensing information
• This website is not endorsed by FHA, VA, USDA, or any government agency
• Kentucky Mortgage Loan Officer License Only

Kentucky FHA Mortgage Guidelines for a Kentucky First Time Home Buyer

Kentucky FHA Mortgage Loans vs Kentucky USDA Rural Housing Loans Compared

Here are the important points about Kentucky USDA Rural Housing Loans:

• USDA loan are only available in certain counties of Kentucky.
• There are two types of USDA loans available: Direct and Guaranteed. 
• 100% financing. No down payment 
• USDA will go down to a no score and uses and  automated underwriting pre-approval system called GUS-Guarantee Underwriting System. The GUS findings will dictate your loan pre-approval.
• Kentucky USDA Rural Housing Income limits based on county and number of people in household.
• Must be 3 years removed from bankruptcy and foreclosure
• No purchase price limit
• Upfront funding fee of 1% of loan amount paid to RD at closing 
• Annual mi fee of .35% paid each month for life of loan. 
• Takes on average 30-45 days to close. 
• 30 year fixed rate is the only term available and rates are usually comparable to FHA and VA government mortgage insured rates.
• Do not have to be a first time home buyer and can currently own another home if USDA deems the current living situation not suitable. 
• Appraisal has to meet FHA minimum standards
• You can buy a home with land on USDA Loans as long as the property does not have any agricultural characteristics or income producing capabilities. 
• There is no set max acreage but the appraisal will dictate approval of property by USDA. 
• You can only use USDA loans to purchase property or refinance an existing USDA loan
• Pools are okay and homes in a flood zone are okay. This is a recent change 

Here are some important facts about Kentucky FHA Loans:

• FHA loans can be made in any county of Kentucky. 
• FHA loans require 3.5% down payment
• FHA Mortgage terms are available in 30, 20, 15, 10 year terms.
• Credit score down to 500 are acceptable but subject to investor approval. will need 10% down payment
• Most lenders will want a 620 score, with some going down to 580 with conditions will need 3.5% down payment
• FHA loans are pre-approved using DU, an online automated underwriting system that will dictate your loan approval conditions. 
• FHA has max income limits in Kentucky with the maximum being $498,257 for most Kentucky Counties
• There are no income limits on the household for FHA loans
• There is a upfront mi premium of 1.75% and a monthly fee of .85% payable each month. 
• If you finance over 90% of the homes value, the monthly mi factor of .85% is for life of loan. If less than 90%, 11 year term for annual mi fee.
• FHA, USDA rates are really comparable on paper, no big difference except for the mi
• FHA requires 3 years out on a short-sale or foreclosure
• FHA requires 2 years out on Chapter 7 and 1 year out on a Chapter 13 with good clean history for the last 12 months with no lates. 
• Not required to be a first time home buyer
• Can refinance an existing FHA loan to another without appraisal, income, a processed call FHA streamline refinance
• Can go no money down potentially with a 620 credit score with a grant. We offer these. 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708

kentuckyloan@gmail.com

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/

How to Qualify for a Kentucky FHA, VA, USDA and Conventional Home Loan

 There’s no universal minimum credit score needed for a mortgage, but a better credit score will give you more options. 

If you’re trying to get a mortgage, your credit score matters. Mortgage lenders use credit scores — as well as other information — to assess your likelihood of repaying a loan on time.

Because credit scores are so important, lenders set minimum scores you must have in order to qualify for a mortgage with them. Minimum credit score varies by lender and mortgage type, but generally, a higher score means better loan terms for you.

Let’s look at which loan types are best for different credit scores.

How to qualify for a mortgage

The type of mortgage you’re applying for determines the minimum requirements you’ll have to meet for your down payment, credit score, and debt-to-income ratio.

Find out what type of loan you might qualify for or what aspects of your finances you’ll need to improve to get a better shot at qualifying for a mortgage.

Loan Type	Min. Down Payment	Min. Credit Score	Max DTI	Property Type
Conventional	3%	620	45%	Primary, secondary, investment
VA	0%	none	none	Primary
FHA	3.5%	500	50%	Primary
USDA	0%	none	41%	Primary

Keep in mind: The minimum down payment, minimum credit score, and maximum DTI shown in the table apply to mortgages used to purchase a primary residence. While you can use a conventional loan or a jumbo loan to purchase a home for another purpose, you might need a larger down payment, a higher credit score, more cash reserves, or all three.

Credit score needed to buy a house

Mortgage lending is risky, and lenders want a way to quantify that risk. They use your three-digit credit score to gauge the risk of loaning you money since your credit score helps predict your likelihood of paying back a loan on time. Lenders also consider other data, such as your income, employment, debts and assets to decide whether to offer you a loan.

Different lenders and loan types have different borrower requirements, loan terms and minimum credit scores. Here are the requirements for some of the most common types of mortgages.

Conventional loan

Minimum credit score: 620

A conventional loan is a mortgage that isn’t backed by a federal agency. Most mortgage lenders offer conventional loans, and many lenders sell these loans to Fannie Mae or Freddie Mac — two government-sponsored enterprises. Conventional loans can have either fixed or adjustable rates, and terms ranging from 10 to 30 years.

You can get a conventional loan with a down payment as low as 3% of the home’s purchase price, so this type of loan makes sense if you don’t have enough for a traditional down payment. However, if your down payment is less than 20%, you’re required to pay for private mortgage insurance (PMI), which is an insurance policy designed to protect the lender if you stop making payments. You can ask your servicer to cancel PMI once the principal balance of your mortgage falls below 80% of the original value of your home.

FHA loan

Minimum credit score (10% down): 500

Minimum credit score (3.5% down): 580

FHA loans are backed by the Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD). The FHA incentivizes lenders to make mortgage loans available to borrowers who might not otherwise qualify by guaranteeing the federal government will repay the mortgage if the borrower stops making payments. This makes an FHA loan a good option if you have a lower credit score.

FHA loans come in 15- or 30-year terms with fixed interest rates. Unlike conventional mortgages, which only require PMI for borrowers with less than 20% down, all FHA borrowers must pay an up-front mortgage insurance premium (MIP) and an annual MIP, as long as the loan is outstanding.

VA loan

Minimum credit score: N/A

VA loans are mortgages backed by the U.S. Department of Veterans Affairs (VA). The VA guarantees loans made by VA-approved lenders to qualifying veterans or service members of the U.S. armed forces, or their spouses. This type of loan is a great option for veterans and their spouses, especially if they don’t have the best credit and don’t have enough for a down payment.

VA loans are fixed-rate mortgages with 10-, 15-, 20- or 30-year terms.

Most VA loans don’t require a down payment or monthly mortgage insurance premiums. However, they do require a one-time VA funding fee, that ranges from 1.4% to 3.6% of the loan amount.

USDA loan

Minimum credit score: N/A

The U.S. Department of Agriculture guarantees loans for borrowers interested in buying homes in certain rural areas. USDA loans don’t require a minimum down payment, but you have to meet the USDA’s income eligibility limits, which vary by location.

All USDA mortgages have fixed interest rates and 30-year repayment terms.

USDA-approved lenders must pay an up-front guarantee fee of up to 3.5% of the purchase price to the USDA. That fee can be passed on to borrowers and financed into the home loan. If the home you want to buy is within an eligible rural area (defined by the USDA) and you meet the other requirements, this could be a great loan option for you.

What else do mortgage lenders consider?

Your credit score isn’t the only factor lenders consider when reviewing your loan application. Here are some of the other factors lenders use when deciding whether to give you a mortgage.

• Debt-to-income ratio — Your debt-to-income (DTI) ratio is the amount of debt payments you make each month (including your mortgage payments) relative to your gross monthly income. For example, if your mortgage payments, car loan and credit card payments add up to $1,800 per month and you have a $6,000 monthly income, your debt-to-income ratio would be $1,800/$6,000, or 30%. Most conventional mortgages require a DTI ratio no greater than 36%. However, you may be approved with a DTI up to 45% if you meet other requirements.
• Employment history — When you apply for a mortgage, lenders will ask for proof of employment — typically two years’ worth of W-2s and tax returns, as well as your two most recent pay stubs. Lenders prefer to work with people who have stable employment and consistent income.
• Down payment — Putting money down to buy a home gives you immediate equity in the home and helps to ensure the lender recoups their loss if you stop making payments and they need to foreclose on the home. Most loans — other than VA and USDA loans — require a down payment of at least 3%, although a higher down payment could help you qualify for a lower interest rate or make up for other less-than-ideal aspects of your mortgage application.
• The home’s value and condition — Lenders want to ensure the home collateralizing the loan is in good condition and worth what you’re paying for it. Typically, they’ll require an appraisal to determine the home’s value and may also require a home inspection to ensure there aren’t any unknown issues with the property.

How is your credit score calculated?

Most talk of credit scores makes it sound as if you have only one score. In fact, you have several credit scores, and they may be used by different lenders and for different purposes.

The three national credit bureaus — Experian, Equifax and TransUnion — collect information from banks, credit unions, lenders and public records to formulate your credit score. The most common and well-known scoring model is the FICO Score, which is based on the following five factors:

• Payment history (35%) — A history of late payments will drag your score down, as will negative information from bankruptcies, foreclosures, repossessions or accounts referred to collections.
• How much you owe (30%) — Your credit utilization ratio is the amount of revolving credit you’re using compared to your total available credit. For example, if you have one credit card with a $2,000 balance and a $4,000 credit limit, your credit utilization ratio is 50%. Credit scoring models view using a larger percentage of your available credit as risky behavior, so high balances and maxed-out credit cards will negatively impact your score.
• Length of credit history (15%) — This factor considers the age of your oldest account, newest account and the average age of all your credit accounts. In general, the longer you’ve been using credit responsibly, the higher your score will be.
• Types of accounts (10%) — Credit scoring models favor people who use a mix of credit cards, installment loans, mortgages and other types of credit.
• Recent credit history (10%) — Lenders view applying for and opening several new credit accounts within a short period as a sign of financial trouble and it’ll negatively impact your score.

Ready to shop around for a mortgage?

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916


American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364



Text/call: 502-905-3708

email: kentuckyloan@gmail.com

https://kentuckyloan.blogspot.com/

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