580 Credit Score Kentucky Mortgage Lenders: FHA, VA & USDA Approval Guide

Kentucky home financing


580 Credit Score Kentucky Mortgage Lenders: FHA, VA & USDA Approval Guide

Last Updated: September 2025 | By Joel Lobb, Kentucky Mortgage Expert | NMLS #57916

Think a 580 credit score means you can’t buy a home in Kentucky? You can. This guide shows how FHA, VA, and USDA approvals work for fair-credit borrowers.

 Call/Text (502) 905-3708 kentuckyloan@gmail.com

Quick answer: A 580 credit score can be approved in Kentucky through FHA, VA, or USDA. We do these approvals across the state every month.

Understanding your 580 credit score in Kentucky

A 580 score is in the fair range. While conventional loans and KHC down payment assistance typically want 620+, FHA, VA, and USDA were built to help modest credit histories become homeowners.

580 credit score can be approved in Kentucky through FHA, VA, or USDA.


Where 580 sits — and why government-backed loans still work.

FHA loans for 580 credit scores in Kentucky

Why FHA fits: 3.5% minimum down payment at 580, available statewide, gifts and seller credits allowed, flexible underwriting, assumable for resale value.

  • Credit score: 580 qualifies for 3.5% down
  • DTI target: 45.99 on front end and 56.99 on a AUS approval and on manual underwriting approvals can do go 40% to 50% with compensating factors % or lower when possible
  • Mortgage insurance: upfront and monthly (MIP)
  • Property: must meet FHA appraisal standards
FHA loans for 580 credit scores in Kentucky


FHA vs USDA vs VA at a 580 credit profile.
Ready to check FHA eligibility? Get a same-day pre-approval or call/text (502) 905-3708.

VA loans for Kentucky veterans with 580 credit

For eligible veterans and service members, VA delivers zero down, no monthly mortgage insurance, and credit flexibility.

  • No VA minimum score;  Some lenders accept 500 and above but most want a 620 score but we do have lenders that will go down to a 580 score.
  • COE required; funding fee may apply (often waived for disability) to verify you are allowed to participate in the VA home loan program
  • Primary residence only; residual income test supports approvals see guidelines below for more details 

Not sure about your COE, credit score, income, and assets? See VA details on my site: Click here ➡️VA loan eligibility in Kentucky Approval Guidelines.

USDA rural housing loans in Kentucky

USDA is ideal for many Kentucky buyers because large areas qualify as rural. Zero down, low monthly MI, competitive rates.

  • Score: 580 workable (often with manual underwriting)
  • Income limits apply; property must be USDA-eligible
  • Guarantee fee applies (upfront + annual)
  • 29 and 41% respective debt to income ratios 
  • 12 month rental history 
  • no lates or collections in the last 12 months
  • No Chapter 7 bankruptcies in the last 3 years

Check property eligibility and income requirements  on the official USDA map: USDA eligibility map of Kentucky Click this link .

Credit improvement strategies to get your score above 580 

  • Pay down credit cards under 30% utilization
  • Dispute errors; remove active disputes before underwriting
  • Document rental history; add a secured card if file is thin
  • Avoid new credit until after closing


Credit repairs tip for Kentucky Mortgage Loan Approval


Quick wins that can move a 580 into better pricing or KHC eligibility with a 620 score 

Real Kentucky success stories

  • Jennifer (Lexington): 583 score → FHA 3.5% down; seller-paid costs → closed on $175k home
  • David (Warren County): 589 score → USDA zero down in eligible area → ownership on a teacher’s salary
  • Maria (Louisville): 584 score veteran → VA zero down, no MI → competitive monthly payment

Frequently asked questions

Can I really get approved with a 580 credit score in Kentucky?
Yes. We close 580-score FHA/VA/USDA approvals every month. Government-backed programs are designed for fair-credit borrowers with stable income.

What is the minimum down payment at 580?
FHA: 3.5% down. VA: $0 down for eligible borrowers. USDA: $0 down in eligible rural areas.

How long does approval take?
Pre-approval: same day. Clear-to-close typically 18–30 days after contract; total 30–45 days.

Will my rate be higher at 580?
Usually modestly higher than prime-credit, but FHA/VA/USDA pricing is often competitive. You can refinance later as credit improves.

Should I wait to improve credit before applying?
If you’re ready to buy and income is stable, apply now. We can pair approval with a credit plan and revisit refinancing later.

Your next step: get pre-approved so you can shop with confidence.

About the author

Joel Lobb is a licensed Kentucky Mortgage Loan Officer (NMLS #57916) with 20+ years of experience. He specializes in government-backed mortgages for fair-credit borrowers and has helped more than 1,300 Kentucky families buy homes.

  • NMLS Personal ID: 57916
  • Company NMLS ID: 1738461 (EVO Mortgage)
  • Kentucky Mortgage License Only
  • Equal Housing Lender

Call/Text (502) 905-3708 · kentuckyloan@gmail.com

Legal disclaimers

Educational only; not financial advice. Programs, rates, and requirements change. Not all borrowers qualify. Not endorsed by FHA, VA, USDA, or any government agency. Joel Lobb is licensed to originate mortgages in Kentucky only.

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Bankruptcy Mortgage Loans in Kentucky | FHA, VA, USDA & Conventional Guidelines for Chapter 7 & 13




Bankruptcy Mortgage Loans in Kentucky | FHA, VA, USDA & Conventional Guidelines for Chapter 7 & 13


Looking for a mortgage loan in Kentucky after bankruptcy? Whether you’ve filed Chapter 7 or Chapter 13, you may still qualify for FHA, VA, USDA, or Conventional (Fannie Mae) loans.

In this video, Joel Lobb, Kentucky Mortgage Expert with EVO Mortgage, breaks down the waiting periods, loan program requirements, and real options available to Kentucky homebuyers — even after bankruptcy.

✅ FHA – 2 years after Chapter 7, 1 year into Chapter 13

✅ VA – 2 years after Chapter 7, 1 year into Chapter 13

✅ USDA – 3 years after Chapter 7, 1 year into Chapter 13

✅ Conventional – 4+ years depending on discharge or dismissal

🏡 Serving all of Kentucky including Louisville, Lexington, Owensboro, Bowling Green, and rural counties.

📞 Call/Text: (502) 905-3708

📧 Email: kentuckyloan@gmail.com


🔗 Learn more: MyLouisvilleKentuckyMortgage.com

Equal Housing Lender | NMLS 57916 | EVO Mortgage NMLS 1738461



Bankruptcy Mortgage Loans in Kentucky | FHA, VA, USDA & Conventional Guidelines for Chapter 7 & 13


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Kentucky First‑Time Homebuyer Questions Answered

Kentucky First‑Time Homebuyer Quiz | FHA • VA • USDA • KHC DPA | Joel Lobb – EVO Mortgage
Kentucky First‑Time Homebuyer • FHA • VA • USDA • KHC

Kentucky First‑Time Homebuyer Interactive Quiz

This no‑fluff assessment helps you understand credit score cutoffs, true $0‑down options, how AUS (DU/GUS) works, rate locks, DTI math, and closing costs in Kentucky. Finish in 5–7 minutes and get personalized next steps from Joel Lobb at EVO Mortgage.

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Created by Joel Lobb, Mortgage Loan Officer • NMLS 57916 • EVO Mortgage NMLS 1738461 • Equal Housing Lender

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Kentucky First‑Time Homebuyer FAQs
What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?

Most lenders want a middle credit score of 620 to 640 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 620 to 640 middle score on their programs. If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit score with at least 10% down payment, you will find it hard to get the loan approved because lenders will create overlays to protect their interest and maintain a good standing with FHA and HUD. Another popular no money down loan is VA. Most VA lenders will want a 620 middle credit score but like FHA, VA on paper says they will go down to a 500 score, but good luck finding a lender for that scenario. A lot of times if your scores are in the high 500's or low 600's range, we can do a rapid rescore and get your scores improved within 30 days.

Does it cost anything to get pre‑approved for a mortgage loan?

Most lenders will not charge you a fee to get pre-approved, but some lenders may want you to pay for the credit report fee upfront. Typically costs for a tri-merge credit report for a single borrower runs about $50 or less. Maybe higher if more borrowers are included on the loan application.

How long does it take to get approved for a mortgage loan in Kentucky?

Typically if you have all your income and asset documents together and submit to the lender, they typically can get you a pre-approval through the Automated Underwriting Systems within 24 hours. They will review credit, income and assets and run it through the different AUS (Automated Underwriting Systems) for the template for your loan pre-approval. Fannie Mae uses DU, or Desktop Underwriting, FHA and VA also use DU, and USDA uses a automated system called GUS. GUS stands for the Guaranteed Underwriting System. If you get an Automated Approval, loan officers will use this for your pre-approval. If you have a bad credit history, high debt to income ratios, or lack of down payment, the AUS will sometimes refer the loan to a manual underwrite, which could result in a longer turn time for your loan pre-approval answer

Are there any special programs in Kentucky that help with down payment or no money down loans for KY First Time Home Buyers?

There are some programs available to KY First Time Home Buyers that offer zero down financing: KHC, USDA, VA, Fannie Mae Home Possible and HomePath, HUD $100 down and City Grants are all available to Kentucky First Time Home buyers if you qualify for them. Ask your loan officer about these programs

When can I lock in my interest rate to protect it from going up when I buy my first home?

You typically can lock in your mortgage rate and protect it from going up once you have a home picked-out and under contract. You can usually lock in your mortgage rate for free for 90 days, and if you need more time, you can extend the lock in rate for a fee to the lender in case the home buying process is taking a longer time. The longer the term you lock the rate in the future, the higher the costs because the lender is taking a risk on rates in the future. Interest rates are kind of like gas prices, they change daily

How much money do I need to pay to close the loan?

Depending on which loan program you choose, the outlay to close the loan can vary. Typically you will need to budget for the following to buy a home: Good faith deposit, usually less than $500 which holds the home for you while you close the loan. You get this back at closing; Appraisal fee is required to be paid to lender before closing. Typical costs run around $500-$650 for an appraisal fee; home inspection fees. Even though the lender's programs don't require a home inspection, a lot of buyers do get one done. The costs for a home inspection runs around $300-$400. Lastly, termite report. They are very cheap, usually $50 or less, and VA requires one on their loan programs. FHA, KHC, USDA, Fannie Mae does not require a termite report, but most borrowers get one done. There are also lender costs for title insurance, title exam, closing fee, and underwriting fees that will be incurred at closing too. You can negotiated the seller to pay for these fees in the contract, or sometimes the lender can pay for this with a lender credit. The lender has to issue a breakdown of the fees you will incur on your loan pre-approval.

How long is my pre-approval good for on a Kentucky Mortgage Loan?

Most lenders will honor your loan pre-approval for 120 days. After that, they will have to re-run your credit report and ask for updated pay stubs, bank statements, to make sure your credit quality and income and assets has not changed from the initial loan pre-approval.

How much money do I have to make to qualify for a mortgage loan in Kentucky?

The general rule for most FHA, VA, KHC, USDA and Fannie Mae loans is that we run your loan application through the Automated Underwriting systems, and it will tell us your max loan qualifying ratios. There are two ratios that matter when you qualify for a mortgage loan. The front-end ratio, is the new house payment divided by your gross monthly income. The back-end ratio, is the new house payment added to your current monthly bills on the credit report, to include child support obligations and 401k loans. Car insurance, cell phone bills, utilities bills does not factor into your qualifying rations. If the loan gets a refer on the initial desktop underwriting findings, then most programs will default to a front end ratio of 31% and a back-end ratio of 43% for most government agency loans that get a refer. You then take the lowest payment to qualify based on the front-end and back-end ratio. So for example, let's say you make $3000 a month and you have $400 in monthly bills you pay on the credit report. What would be your maximum qualifying house payment for a new loan? Take the $3000 x .43%= $1290 maximum back-end ratio house payment. So take the $1290-$400= $890 max house payment you qualify for on the back-end ratio. Then take the $3000 x .31%=$930 maximum qualifying house payment on front-end ratio. So now you know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.

Key mortgage facts to know
  • Mortgage rates change just like the stock market, throughout the day. Mortgage rates you see today may not be available tomorrow.
  • Different lenders charge different fees. Don't expect every lender to charge the same fees for a mortgage loan.
  • Lenders can sell your loan to another bank. Many borrowers have experience getting a mortgage loan with a certain lender only to find out that the loan has been sold to another bank.
  • Your middle credit score matters. When you apply for a mortgage loan, the lender will pull your credit scores from three credit bureaus to help them determined if you are credit worthy. Your middle score of the three is what lenders will use for loan qualification.
  • You can refinance your home loan anytime. You can refinance your mortgage anytime, but it doesn't necessarily mean you should.
  • You can get a mortgage loan after a foreclosure. There are waiting periods involved: FHA requires three years after foreclosure to apply. Conventional loans require seven years from foreclosure. VA loans require two-years.
  • Good credit allows you to get better mortgage rates. Good credit scores mean a better rate in any type of loan, especially a mortgage loan.
  • Know your Annual Percentage Rate (APR). While the interest rate shows the annual cost of your loan, the APR includes other fees such as origination points, admin fees, loan processing fees, underwriting fees, documentation fees, private mortgage insurance and escrow fees.
  • You can always reduce closing costs. One way to reduce closing costs is to have the sellers contribute towards the closing costs when purchasing your home.
Joel Lobb • Mortgage Loan Officer • Expert on Kentucky Mortgage Loans
NMLS 57916 • EVO Mortgage NMLS 1738461 • Equal Housing Lender
Email: kentuckyloan@gmail.com • Call/Text: 502‑905‑3708
Not endorsed by or affiliated with FHA, VA, USDA, or any government agency. Information is educational and subject to change; program eligibility, rates, and fees vary by lender and scenario. This page does not constitute a commitment to lend.
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Kentucky Mortgage Approval With No Credit Score FHA, VA, USDA, Conventional

Kentucky Mortgage Approval With No Credit Score (FHA, VA, USDA, Conventional) — 2025 Guide
Kentucky 2025

Kentucky Mortgage Approval With No Credit Score

A simple plan for FHA, VA, USDA, and Conventional loans. If you have no credit score, you can still buy a home in Kentucky—here is how it works.

Apply Now (502) 905‑3708 Email Joel

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.

See related guides: Kentucky FHA Loans · Kentucky VA Loans · USDA Rural Housing Kentucky · KHC Down Payment Assistance

Quick Start: What to do first

1

Map your program

  • Use VA if you are eligible (often $0 down).
  • 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. HUD REO $100 down, escrow holdbacks, 203(h) disaster, Condo Single‑Unit Approvals allowed.
Conventional Purchases and refis as AUS permits No‑score co‑borrowers allowed with DU/LPA Approve/Accept. Run both and follow the stronger findings. Per AUS If scored borrower provides >50% of income: no extra NTCs. If no‑score borrower provides >50%: need 2 NTCs + 12‑month rent. Pricing may be based on the scored borrower's profile (e.g., 740) when paired with a no‑score co‑borrower.
USDA Purchases Run GUS. Enter 100 as the credit score for a no‑score borrower. Typical program ratios 29/41 unless GUS allows otherwise. If 12‑month rent is verified: add 1 extra NTC. If no rent: provide 3 NTCs. $0 down for eligible rural properties. Check USDA property eligibility.

VA with no score

If your total DTI is above 41%, you must meet at least 120% of the VA residual‑income rule for your family size and region.

What to expect

  • Manual underwriting allowed up to 50% DTI with strong residual income.
  • 3 non‑traditional tradelines with 12 month on‑time history for any no‑score borrower.
  • Rent‑free letter if you live rent‑free.
  • $0 down available for eligible Veterans with entitlement.

Helpful link: VA Home Loan Program

FHA with no score

What to expect

  • When any borrower has no score, we must manually underwrite, even if AUS says Approve/Eligible.
  • DTI caps: 31/43 when all borrowers have no score.
  • If one borrower has a 580+ score and the other has no score, DTI can stretch to 40/50 with strong compensating factors.
  • 3 non‑traditional tradelines with 12 months of on‑time payments; rent‑free letter when applicable.
  • Special cases allowed: HUD REO $100 down, escrow holdbacks, 203(h) disaster relief, Condo Single‑Unit Approvals.

Helpful link: FHA for Homebuyers

Conventional with no score

What to expect

  • We run DU (Fannie Mae) and LPA (Freddie Mac). If we receive Approve/Accept findings, a no‑score co‑borrower is allowed.
  • Pricing may be based on the scored borrower's credit when paired with a no‑score co‑borrower.
  • If the scored borrower provides more than 50% of qualifying income: no extra NTCs needed.
  • If the no‑score borrower provides more than 50%: provide 2 non‑traditional tradelines plus 12‑month rent verification.

Helpful links: Fannie Mae Single‑Family · Freddie Mac Single‑Family

USDA with no score

What to expect

  • We run GUS. For a borrower with no score, we enter 100 as the score value in the system.
  • Typical USDA ratios are 29/41, but GUS may allow exceptions.
  • If 12‑month rent is verified: provide rent + 1 extra non‑traditional tradeline. If no rent: provide 3 non‑traditional tradelines.
  • $0 down for eligible rural properties. Check your address on the USDA map.

Helpful link: USDA Eligibility

Non‑traditional credit examples

Commonly Accepted

  • Rent or mortgage (VOR)
  • Utilities: electric, water, gas
  • Phone or internet
  • Auto or renters insurance

Sometimes Accepted

  • Daycare or tuition
  • Streaming or subscription bills
  • Medical payment plans
  • Gym membership with monthly billing
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.

Start Your Application Call (502) 905‑3708 Email Joel
Kentucky no credit score FHA VA USDA Conventional First‑time homebuyer

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.

Helpful official resources: HUD/FHA · VA · USDA · Fannie Mae · Freddie Mac

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