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

Kentucky Mortgage Credit Score Requirements for FHA, VA, USDA, Conventional & 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

Buying a Home After Divorce in Kentucky: Mortgage Requirements, Separation Rules & Loan Options

Kentucky Mortgage Guide: Legal Separation vs. Divorce Decree When Applying for a Home Loan

When a marriage ends, the mortgage process in Kentucky can become stressful and confusing very quickly. Many borrowers are unsure how a legal separation, a temporary court order, or a final divorce decree will impact their ability to qualify for a new mortgage or refinance an existing home loan.

This guide explains how lenders review your application during and after a divorce, what documentation is required, and how divorce-related debts and obligations affect your chances of qualifying for FHA, VA, USDA, Conventional, and Kentucky Housing Corporation (KHC) loans.

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Why Divorce Matters in the Kentucky Mortgage Process

When you apply for a mortgage after a separation or divorce, underwriters focus on three key areas:

• Income stability
• Monthly debts and obligations
• Credit history and legal liabilities

If your divorce is not finalized or your legal paperwork is unclear, it can be difficult for a lender to determine:

• Which debts are truly yours
• Who is responsible for the current mortgage on the marital home
• What amount of child support or maintenance you pay or receive
• Whether any joint accounts are being handled by your ex-spouse

Because of this, your legal status (separated vs. divorced) and the wording in your court documents play a major role in whether you can be approved for a home loan in Kentucky.

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Legal Separation in Kentucky (Not Finalized Yet)

A legal separation in Kentucky may involve temporary court orders such as:

• Temporary maintenance (alimony)
• Temporary child support
• Temporary responsibility for certain debts
• Temporary possession of the marital home

How lenders interpret this: Temporary orders are just that – temporary. They can change once the divorce is finalized, so lenders treat them with caution.

What Legal Separation Means for Your Mortgage Approval

• Temporary support payments you owe are counted as monthly debts in your debt-to-income ratio (DTI).
• You may still be treated as responsible for the marital mortgage, even if your spouse is making the payments.
• Joint debts usually still appear on your credit report and can count against your DTI unless and until they are reassigned or refinanced.
• Some lenders will not close on a loan until the divorce is fully finalized and the final decree is available.

The bottom line: you can sometimes qualify while legally separated, but the process is more complicated and may limit your loan options or approval amount.

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Final Divorce Decree (Preferred by Lenders)

A finalized divorce decree gives lenders a clear, legally binding roadmap of your financial obligations. It typically spells out:

• Who is responsible for paying the existing mortgage
• How joint debts and credit accounts are divided
• Child support obligations (amount and duration)
• Maintenance/alimony obligations (amount and duration)
• How assets such as the marital home are awarded

How a Final Divorce Decree Helps Your Mortgage Approval

• Debt responsibility becomes clear. Debts that are legally assigned to your ex-spouse may potentially be excluded from your DTI with proper documentation and payment history.
• Support income can be counted. If you receive child support or maintenance, it may count as qualifying income if it is documented and expected to continue for the required time period.
• Underwriters can rely on final, permanent numbers. This makes it easier for FHA, VA, USDA, Conventional, and KHC programs to approve your file.

In most cases, lenders strongly prefer that your divorce be final before they issue a clear-to-close on your mortgage.

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Key Documents You Must Provide for a Kentucky Mortgage After Divorce

To evaluate your application accurately, your lender will typically ask for some or all of the following documents:

• Final Divorce Decree
• Marital Settlement Agreement (MSA)
• Child Support Orders, even if the amount ordered is $0
• Proof of support received or paid (bank statements, pay stubs, court records)
• Quitclaim deed or transfer deed if one spouse is awarded the home
• Documentation showing who is responsible for the current mortgage on the marital home
• Temporary orders if the divorce is not yet finalized

Without these documents, underwriting cannot properly calculate your ratios or determine which debts belong to you.

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How Divorce Impacts Your Credit and Debt-to-Income Ratios

Responsibility for the Marital Mortgage

Even if the divorce awards the home to your ex-spouse, you may still be legally liable for the mortgage unless the loan is refinanced into your ex-spouse's name alone. Until that happens:

• The mortgage will continue to show on your credit report.
• The full payment may continue to be counted in your DTI for mortgage qualification.

Joint Debts Awarded to Your Ex-Spouse

Joint credit cards, auto loans, or personal loans that are awarded to your ex-spouse in the divorce decree may be excluded from your DTI if:

• The divorce decree clearly assigns responsibility to your ex-spouse, and
• Your ex-spouse has made the required payments for a documented period (often 12 months, depending on loan program and underwriting guidelines).

Child Support and Maintenance

• Support you pay (child support or alimony) is counted as a monthly debt.
• Support you receive may be counted as income if:
  • It is court-ordered, and
  • You can show consistent receipt of payments, and
  • It is expected to continue for the required amount of time.

Because of this, it is extremely important to keep good records and make sure your court documents match what is actually happening in real life.

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How Different Loan Programs View Divorce in Kentucky

FHA Loans

• Support income must typically have three years of continuance to be counted.
• Support you pay is treated as a monthly liability in your DTI.
• Debts assigned to your ex-spouse in the decree may be excluded with proper documentation.

VA Loans

• VA guidelines recognize the assignment of debts and assets in the divorce decree.
• Child support and maintenance obligations affect your residual income and qualifying ratios.
• VA residual income rules still apply, even after divorce.

USDA Rural Housing Loans

• All court-ordered support obligations count toward your DTI.
• Childcare expenses must be documented when applicable.
• Debts assigned to an ex-spouse may be excluded if documentation and payment history support it.

Conventional Loans (Fannie Mae / Freddie Mac)

• Often more flexible about excluding joint debts that have been legally assigned to your ex-spouse.
• Support income may be counted with as little as six months documented receipt and evidence of continuance, depending on guidelines.
• Desktop Underwriter (DU) findings usually determine how much payment history is required.

Kentucky Housing Corporation (KHC) Down Payment Assistance

• KHC follows the underlying agency guidelines for FHA, VA, USDA, or Conventional loans.
• A finalized divorce decree is typically required for DPA approval.
• All support obligations and joint debts must be fully documented.

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Tips for Buying a Home in Kentucky After a Divorce

• Finalize your divorce if possible. A final decree makes the mortgage process much cleaner and more predictable.
• Review your credit early. Check for joint debts, late payments, or accounts that need to be closed or refinanced.
• Keep great documentation. Save court orders, payment histories, bank statements, and any other proof of who pays what.
• Clarify who is responsible for the marital home. Make sure the decree spells out who pays the mortgage and what happens to the property.
• Talk to a Kentucky mortgage professional before the decree is finalized. You may be able to structure the divorce terms in a way that helps your mortgage approval instead of hurting it.

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Need Help With a Kentucky Mortgage After Divorce or Separation?

If you are going through a divorce or legal separation in Kentucky and need to buy a home, refinance, or get off a joint mortgage, you don’t have to guess how the rules work. Every situation is different, and the wording of your legal documents can make a big difference in what you qualify for.

I work every day with Kentucky borrowers who are rebuilding after divorce or separation and want a clear plan to move forward with a mortgage.

Next Steps:

• Get a review of your divorce decree and current debts
• See how FHA, VA, USDA, Conventional, or KHC programs view your situation
• Build a realistic plan to qualify for a new mortgage or refinance

Contact:
Joel Lobb – Kentucky Mortgage Broker
Specializing in FHA, VA, USDA, Conventional & KHC Programs
Call/Text: 502-905-3708
Email: kentuckyloan@gmail.com
Website: https://www.mylouisvillekentuckymortgage.com/

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Related Kentucky Mortgage Resources

• Kentucky First-Time Home Buyer Programs
• Kentucky FHA Loan Requirements
• USDA Rural Housing Loans in Kentucky
• KHC Down Payment Assistance Overview

Frequently Asked Questions About Divorce and Kentucky Mortgages

Can I buy a house in Kentucky while legally separated?

Yes, but underwriting is more complicated. Lenders prefer a finalized divorce decree because temporary support and temporary debt assignments may change. You may still be responsible for joint debts and the marital mortgage during separation.

Does a divorce decree remove my name from the mortgage?

No. A divorce decree can assign responsibility for the mortgage, but it does not remove you from the loan. Only a refinance or assumption into your ex-spouse’s name can fully release you.

Can child support count as income for a mortgage in Kentucky?

Yes, child support may count as qualifying income if it is court-ordered, you can document consistent receipt, and it is expected to continue for the required duration (usually 3 years for FHA, 6–36 months for Conventional).

Will debts assigned to my ex-spouse still show on my credit report?

Yes. Joint debts typically remain on your credit report until they are refinanced or closed. However, lenders may exclude them from your debt-to-income ratio if the decree clearly assigns the debt to your ex and there is proof they have made the payments.

Do I need to provide my full divorce decree to the lender?

Yes. Lenders require the complete, signed decree and marital settlement agreement. They need every page to verify support obligations, debt assignments, property division, and mortgage responsibility.

Did you know that a Kentucky  legal separation agreement may be substituted for a divorce decree for a Kentucky Mortgage Loan?

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

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Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

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

Keeping or Buying a Home After Divorce in Kentucky – Mortgage Guide

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 2025 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 10 years
• Affordable DAP – Often offers a lower interest rate and targets lower-to-moderate income households

Many Louisville buyers use KHC to dramatically reduce the cash needed at closing. It’s often combined with FHA or conventional loans to make homeownership more achievable.

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 640+ 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.

Fannie Mae Drops 620 Credit Score Rule — Big News for Kentucky Homebuyers!

BREAKING MORTGAGE NEWS — FANNIE MAE REMOVES MINIMUM CREDIT SCORE REQUIRE...

Fannie Mae Removes Minimum Credit Score! What It Means for Kentucky Homebuyers (Conventional Loan Update 2025)

Breaking Update

Fannie Mae Removes Minimum Credit Score in DU — What It Means for Kentucky Conventional Mortgages

Effective for DU casefiles created on/after November 16, 2025

Fannie Mae has removed the 620 minimum credit score requirement from Desktop Underwriter® (DU®) for new loan casefiles. Instead of a hard cutoff, DU now evaluates your full credit profile. For Kentucky first-time homebuyers, this may unlock access to a Kentucky conventional mortgage even if your score was previously “too low.”

Key Takeaways for Kentucky Homebuyers

No hard 620 floor

DU now runs a comprehensive risk assessment of your overall profile—income, debts, payment history, reserves, property, and purpose—not just your score.

Still full underwriting

“No minimum credit score required” doesn’t mean automatic approval. You must meet standard credit, income, asset, and property guidelines. Lenders may apply overlays.

Timing matters

This applies to new DU casefiles created on or after Nov. 16, 2025. Older files keep old rules. Coordinate submission with your loan officer.

Pricing still risk-based

Rates and mortgage insurance depend on your total profile. We’ll compare conventional vs. VA, USDA, and FHA—and whether KHC down payment assistance helps.

Who Stands to Benefit in Kentucky?

• First-time buyers with scores below 620 but strong income stability and on-time housing payments.
• Borrowers with limited credit depth who can document compensating factors (reserves, lower DTI, verified rent, reduced utilization).
• Clients comparing total cost of ownership across conventional vs. FHA/VA/USDA options.

Pro tip: Before running DU, clean up reporting errors, reduce revolving balances, and assemble documentation (W-2s/1099s, paystubs, bank statements, ID, and housing history). This strengthens DU’s overall assessment even without a score floor.

Conventional vs. FHA, VA, USDA in Kentucky

Conventional (Fannie Mae)

Now no minimum credit score required in DU for new casefiles. Best fit when overall profile is strong and mortgage insurance costs are competitive.

Learn more at Fannie Mae

FHA

Often lower down payment and flexible credit, but includes mortgage insurance. Useful if pricing beats conventional for your profile.

Kentucky FHA Guide

VA & USDA

VA for eligible Veterans/Service Members—often no down payment. USDA offers zero down in eligible areas with income limits.

Kentucky VA Info • Kentucky USDA Guide

Action Plan for Kentucky First-Time Homebuyers

1. Free pre-check: Share your basic info and goals. We’ll map the best path: conventional vs FHA/VA/USDA + KHC.
2. DU scenario runs: We’ll run DU with the new rules and compare pricing and MI.
3. Documentation: Gather ID, income, assets, and housing history so we can move quickly to full approval.

Ready to see if a Kentucky conventional mortgage works for you—without a minimum credit score requirement in DU?

Call/Text 502-905-3708 • Email kentuckyloan@gmail.com • Office: 911 Barret Ave, Louisville, KY 40204

Start Your Pre-Approval

FAQs: No Minimum Credit Score Required in DU

Does this mean scores don’t matter anymore?

No. Scores still influence risk and pricing. DU simply removed the hard 620 gate for new casefiles—your full profile drives the decision.

Will my lender still require a certain score?

Some lenders impose overlays (internal minimums). We’ll shop your scenario with investors aligned to Fannie Mae’s update.

Can KHC down payment assistance pair with conventional?

Yes—if you meet program rules. We regularly compare KHC DPA with conventional, FHA, VA, and USDA options to find the best total cost.

When does this apply?

For loan casefiles created in DU on or after Nov. 16, 2025. If your file predates this, we can recreate the casefile under the new rules where appropriate.

Compliance & Disclosures: For informational purposes only. Not a commitment to lend or extend credit. All loans subject to credit approval, underwriting guidelines, investor overlays, and program/market changes. Equal Housing Lender. Joel Lobb, NMLS #57916. EVO Mortgage, NMLS #1738461. Licensed in Kentucky. Program availability, rates, and terms may change without notice.

Trademarks: Fannie Mae, Desktop Underwriter, and DU are registered trademarks of Fannie Mae. This site is not endorsed by or affiliated with Fannie Mae.

Internal resources: Credit Scores & Mortgage • VA Loans Kentucky • FHA Loans Kentucky • USDA Rural Housing Kentucky • KHC Down Payment Assistance

Kentucky First‑Time Homebuyer Questions Answered