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
Why credit scores matter for mortgage underwriting
Mortgage lenders use FICO mortgage score models (FICO 2, 4, 5). Consumer scores (VantageScore, Credit Karma) are not used for final underwriting decisions.
Minimum credit scores by program
Conventional: Minimum 620 (automated); better pricing with higher scores. Learn more
Kentucky Mortgage Loans with Past Credit Issues: FHA, VA, USDA, Conventional, and KHC Options
Kentucky mortgage loans after credit challenges: your options and next steps
If you’ve had late payments, collections, bankruptcy, or other setbacks, you’re not out of the game. Kentucky homebuyers routinely qualify using the right loan structure, realistic timelines, and clean documentation. Below is a practical breakdown of FHA, VA, USDA, Conventional, and KHC down payment assistance—plus smart internal and external resources.
Program overview
FHA loans in Kentucky
Potential approvals down to 500 with at least 10% down or 10% equity on a refinance.
580+ score typically enables 3.5% down payment.
Gift funds and DPA allowed; flexible underwriting for limited credit depth.
FHA is introducing new guidelines on loan to value ratios and the minimum credit score required for FHA borrowers in Kentucky. As detailed in a Mortgagee Letter from the Department of Housing and Urban Development (HUD), the following credit requirements will apply for FHA borrowers, effective October 4, 2010.
Kentucky FHA Borrowers with a credit score between 500 and 579 will be limited to a loan to value of 90%. A sub 580 FICO credit score borrower will henceforth need to make a 10% minimum down payment on a purchase transaction.
The new credit requirements are not expected to dramatically change the number of Kentucky FHA mortgage approvals.
minimum credit score requirement of 580 to 620 or higher for Kentucky FHA borrowers.
In limited cases, borrowers with scores between 580 and 639 could still obtain mortgage approval with compensating factors such as large down payment (more than 3.5% minimum), low debt to income ratios, and substantial reserves in the bank with a verifiable pay history of no late payments in the last 12 months of rent and on credit report. A late is considered 30 days late in the credit rating world.
Ultimately, there is no singular credit score that can guarantee you a mortgage approval. Each lender is free to set their own credit score requirements.
But many loan types are insured by government organizations. And lenders cannot accept borrowers with credit scores below the minimum these organizations set.
The four most popular home loan types are:
Conventional: Not backed by any government agency, but must meet the Fannie Mae and Freddie Mac underwriting guidelines
FHA: Loans backed by the Federal Housing Administration
VA: Loans backed by the US Department of Veterans Affairs (for military members)USDA: Loans backed by the US Department of Agriculture (for low- to moderate-income families who buy homes in rural areas)
The minimum credit score requirements for each of these loan types:
Conventional:
620 SCORE NEEDED. BUT TO GET APPROVED FOR A FANNIE MAE LOAN MOSTLY LIKE YOU WILL NEED A 720 SCORE OR HIGHER IF YOU HAVE LESS THAN 20% EQUITY POSITION OR LESS THAN 20% DOWN PAYMENT DUE TO PRIVATE MORTGAGE INSURANCE
FHA:
580 for a 3.5% down payment 500 for down payments of at least 10% **MOST FHA LENDERS WILL WANT A 580 to 620 CREDIT SCORE NOWADAYS
VA:
No minimum BUT MOST VA LENDERS WILL WANT A 580 to 620 CREDIT SCORE
USDA:
No minimum, but with a credit score of at least 620 to 640 you could qualify for streamlined credit analysis and chances of approval goes way down if score is below 640...
Which credit score is used to qualify for a Mortgage loan in Kentucky?
For example if you have a 598, 625, 604 on each of the main three reporting agencies, then your qualifying fico score would be 604.
If you’re planning to apply for a mortgage, be aware that the credit score you see on your application might differ slightly from the one you’re used to.
It might even be different than what comes up when you monitor your credit, or even when you apply for a car loan.
Banks use a slightly different credit score model when evaluating mortgage applicants. Below, we go over what you need to know about credit scores you’re looking to buy a home.
The scoring model used in mortgage applications
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage:
As you can see, each of the three main credit bureaus (Equifax, Experian and TransUnion) use a slightly different version of the industry-specific FICO Score. That’s because FICO tweaks and tailors its scoring model to best predict the creditworthiness for different industries and bureaus. You’re still evaluated on the same core factors (payment history, credit use, credit mix and age of your accounts), but the categories are weighed a little bit differently.
The FICO 8 model is known for being more critical of high balances on revolving credit lines. Since revolving credit is less of a factor when it comes to mortgages, the FICO 2, 4 and 5 models, which put less emphasis on credit utilization, have proven to be reliable when evaluating good candidates for a mortgage.
Mortgage lenders pull all three reports,from all three bureaus, but they only use one when making their final decision.
“A bank will use all three bureaus,”--- “It’s called a tri-merge.”
If all three of your scores are the same, then their choice is simple. But what if your scores are different?
If two of the three scores are the same, lenders use that one, regardless of whether it’s higher or lower than the other one.
And if you are applying for a mortgage with another person, such as your spouse or partner, each applicant’s FICO 2, 4 and 5 scores are pulled. The bank identifies the median score for both parties, then uses the lowest of the final two.
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).
If you’re looking to buy a home in Kentucky, having a solid credit score is essential for qualifying for popular mortgage programs like FHA, VA, USDA, or KHC loans. Here are six actionable tips to improve your credit score and increase your chances of getting approved for your dream home loan.
1. Pay Your Monthly Bills on Time
Here are six tips for improving your credit score for a fresh financial start
1. Pay Your Monthly Bills on Time Paying monthly bills is a necessary chore that has a definite effect on your credit score. According to the FICO scoring model, your payments account for as much as 35 percent of your total score. Create reminders for due dates or establish a calendar for yourself to ensure you get everything paid on time.
2. Reduce Your Debts Got credit card debt? Start paying it off now. Part of your credit score is based on the amount of available credit you have, known as your credit utilization ratio. So if you're carrying high balances, you'll want to lower them as soon as possible. Create a personal budget with a goal of reducing your spending so that it's lower than your income. Then, use any monthly surplus for your credit card debts until they're gone for good.
3. Limit Credit Inquiries
Looking for a new apartment? What about a mortgage? In either situation, try and group your applications together as much as possible. Applications for new lines of credit will generate a "hard pull" on your credit, and having too many of them in a short period of time can lower your score. However, credit reporting agencies usually consider a group of applications within a short period of time as one pull, as long as they're in the same category.
Similarly, limit yourself to opening up no more than one or two credit cards per year, which also generate hard pulls. Even if you get a ton of offers in the mail for stellar sign-up bonuses, they're likely to be offset by the damage to your credit. FICO reports that new credit and credit inquiries account for 10 percent of your total score.
4. Don't Cancel Old Cards
Have a card you don't use anymore? Don't close it. This can negatively affect your score as it lowers your amount of available credit. Instead, use it about once per month and don't forget to pay the bills in full, and on time.
5. Request Credit Limit Increase
If you only have one card and you're constantly approaching your spending limit, call the bank and ask for an increase in your credit line. This will raise the amount of available credit, which will eventually improve your score.
6. Take Care of Late Payments Before They Hit Your Score
If you do happen to miss a payment, contact the card issuer immediately. If you have good history built up, the company may agree to not report your late payment. Even if you can't avoid a late-payment fee, be sure to get your account up to date as soon as possible so you can limit the damage.
Your credit score is yours to own. It reflects your financial history and helps lenders predict how you will manage your finances in the future. Due to the lingering effects of credit, you don't want to waste any time to improve your credit.
Credit Repair Tips for Kentucky Homebuyers
Frequently Asked Questions (FAQs)
Can I buy a house in Kentucky with a 580 credit score?
Yes. With a 580 score, you may qualify for an FHA loan in Kentucky with just 3.5% down. If your score is below 580, some lenders may still approve you with a 10% down payment. VA and USDA loans may also work with flexible credit guidelines, but additional documentation or manual underwriting may be required.
How long after bankruptcy can I get a mortgage in Kentucky?
Chapter 7 Bankruptcy: Generally, you must wait 2 years from discharge for FHA and VA loans, and 3 years for USDA.
Chapter 13 Bankruptcy: Borrowers may qualify after 12 months of on-time payments with court approval. Conventional loans require a longer waiting period.
What credit score do I need for a USDA loan in Kentucky?
Most lenders look for a 640 minimum credit score for USDA automatic approval through the Guaranteed Underwriting System (GUS). Lower scores may still be approved with manual underwriting, but stronger compensating factors (like low debt-to-income ratios or extra savings) are often required.
What credit score is needed for a VA loan in Kentucky?
The VA itself does not set a minimum score. However, many lenders in Kentucky require 580–620 or higher. Since VA loans are more flexible, they are often a good option for veterans or active-duty service members with less-than-perfect credit.
Does Kentucky Housing Corporation (KHC) require good credit?
KHC offers down payment assistance programs tied to FHA, VA, USDA, or Conventional loans. In most cases, a minimum 640 score is required for KHC’s down payment assistance options, although individual loan program requirements still apply.
How long does it take to repair credit enough to buy a house?
It depends on your starting point. For some borrowers, 3–6 months of consistent on-time payments and reduced balances can move the needle significantly. For others with major derogatory items (like collections or bankruptcy), it may take longer. Working with a mortgage professional early can help you build a timeline and strategy.
Credit Repair Tips for Kentucky Homebuyers
Buying a home in Kentucky can feel out of reach if your credit isn’t where it needs to be. Whether you’re looking at FHA, VA, USDA, or Kentucky Housing Corporation (KHC) loans, your credit score is a key factor in approval and interest rate. The good news? You can take action today to improve your score and position yourself for homeownership.
Here are six proven strategies to repair and strengthen your credit.
1. Pay Your Bills on Time
Payment history accounts for about 35% of your FICO score. Even a single late payment can have lasting consequences. Setting up autopay, digital reminders, or a simple calendar system will keep you consistent.
2. Reduce Credit Card and Loan Balances
High balances relative to your credit limit increase your credit utilization ratio—a major factor in your score. Aim to bring balances below 30%, or ideally under 10%, for the strongest results. Build a monthly budget that prioritizes paying down debt before discretionary spending.
3. Limit New Credit Inquiries
Each time you apply for new credit, a hard inquiry is added to your report. Too many inquiries in a short time frame can drop your score. If you’re shopping for a mortgage, group applications within 30–45 days to minimize the impact. Limit opening new credit cards unless absolutely necessary.
4. Keep Old Credit Cards Open
Closing old accounts reduces available credit and shortens your credit history. Both lower your score. Keep older accounts active by making a small monthly purchase and paying it off in full to maintain positive history.
5. Request a Credit Limit Increase
If you regularly use most of your available credit, request a limit increase. This lowers your utilization ratio, which can improve your score. Be cautious: this only helps if you avoid increasing your spending along with the new limit.
6. Address Late Payments Immediately
Missed a payment? Contact your creditor right away. Some lenders will work with you and avoid reporting it if your history is otherwise strong. Even if a late fee applies, catching up quickly reduces long-term damage.
How Long Does Bad Credit Stay on Your Report?
Late payments, charge-offs, and collections: 7 years
Chapter 7 bankruptcy: 10 years
Chapter 13 bankruptcy: 7 years
Foreclosure: 7 years
While negative marks remain for years, their impact lessens over time as you add new, positive credit history.
Next Steps for Kentucky Homebuyers
Your credit score is important—but it’s not permanent. By taking steps now, you can improve your financial position and qualify for programs like FHA loans with credit scores as low as 580, VA loans with flexible guidelines, USDA zero-down financing, and KHC down payment assistance programs.
If you’re ready to explore your options and take the next step toward homeownership in Kentucky, I can help you map out a personalized path.
EVO Mortgage – Company NMLS #1738461
Joel Lobb – Personal NMLS #57916
Disclaimer: The views and opinions expressed are for informational purposes only and do not guarantee loan approval or represent full underwriting guidelines. This is not a government agency. Loan programs may not be available to all borrowers. Visit www.nmlsconsumeraccess.org for more information.
Evo Mortgage Company NMLS# 1738461 Personal NMLS# 57916
For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.
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). Mortgage loans only offered in Kentucky.
Author: Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA · NMLS #57916 · Company NMLS #1738461 · Louisville, KY
Why this guide matters
You can buy a home in Kentucky even if you do not have a credit score. I help first‑time buyers with no scores every week. This site has deep how‑to guides on Kentucky FHA, VA, USDA, and Conventional loans. That gives you simple steps, clear rules, and fewer surprises. In short: this is our specialty, and we do it a lot.
Use USDA if the home is in an eligible rural area (often $0 down).
Use FHA if you need flexible credit rules.
Use Conventional when AUS approves, often with a co‑borrower who has a score.
2
Prove your payment history
Gather 12 months of on‑time payments for rent and 2–3 other bills (utilities, phone, insurance, daycare). Bank statements, invoices, or letters from the company work.
Why Kentucky Homebuyers Trust Us
500+ Kentucky Homes Financed
15+ Years Experience
4.9/5 Customer Rating
Fully Licensed & Insured
Program snapshot (side‑by‑side)
Each program has unique requirements for no-score borrowers. The right choice depends on your specific situation.
Program
Purchases vs. Refis
Approval Method
DTI Rules
Tradelines & Rent
Notes
VA
Purchases only when no score is involved
Manual underwriting allowed up to 50% DTI with residual income. If DTI > 41%, meet 120% of VA residual income.
Up to 50% with strong residual income
3 non‑traditional tradelines with 12 months on‑time history. Rent‑free letter if living rent‑free.
No formal loan cap with full entitlement; $0 down for eligible Veterans.
FHA
Purchases only when a borrower has no score
Even if AUS is Approve/Eligible, downgrade to manual when any borrower has no score.
All borrowers no score: 31/43. If one borrower has ≥580 and the other no score: up to 40/50 with compensating factors.
3 non‑traditional tradelines per no‑score borrower; rent‑free letter if applicable.
Tip: we need 12 straight months of on‑time payments and a way to verify them.
Documents checklist
Identity & income
Driver's license and Social Security number
30 days of pay stubs and last 2 years W‑2s
Last 2 months of bank statements
Proof of other income (if any)
Non‑traditional credit
12‑month rent verification or rent‑free letter
2–3 other bills with 12 months of on‑time payments
Invoices or letters from each company
Matching bank statements when possible
FAQs
Is this only for first‑time buyers?
No. It fits many buyers who lack a traditional score. Each program has extra rules. We will confirm what works for you.
Will building a quick credit score help?
Sometimes, but not always. Opening a new card right before buying a home can cause delays or lower your approval odds. Ask first.
Can I use down payment help?
Often yes. Many Kentucky buyers pair these loans with KHC Down Payment Assistance. We will review your eligibility.
Ready to get pre‑approved?
We specialize in no‑score mortgage approvals in Kentucky across FHA, VA, USDA, and Conventional. I will map your plan, list the exact documents you need, and show you the payment range you can expect.
Equal Housing Lender. EVO Mortgage Company NMLS #1738461 |Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA Joel Lobb NMLS #57916. Not a commitment to lend. All loans subject to credit approval, property approval, program availability, and change without notice. AUS findings and agency handbooks (HUD/FHA, VA, USDA, Fannie Mae, Freddie Mac) – as well as investor overlays – control. Some features (such as no‑score refinances) may be unavailable. Always verify property eligibility and income limits for USDA and KHC programs.
Author: Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA
· NMLS #57916 · Company NMLS #1738461 · Louisville, KY
Equal Housing Lender
This is not a commitment to lend. All loans subject to credit approval, underwriting, property eligibility, and program guidelines. Not affiliated with HUD, VA, USDA, Fannie Mae, or Freddie Mac.
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Address: 911 Barret Ave., Louisville, KY 40204