By Joel Lobb — Mortgage Broker (FHA, VA, USDA, KHC) | Updated Oct 17, 2025

What credit score do you need to qualify for a Kentucky FHA loan? Straight talk: the Federal Housing Administration (FHA) requires a minimum credit score of 500 to be eligible. However, your final terms depend on your score and your lender’s additional requirements (known as overlays).

FHA Minimum Credit Guidelines (HUD)

  • 580 and up: Eligible for 96.5% financing — 3.5% down.
  • 500–579: Eligible for 90% financing — 10% down.
  • Under 500: Not eligible for FHA financing.

Two Things You Must Satisfy

There are two layers of approval you must clear:

  1. HUD/FHA rules: The official, baseline eligibility outlined in the HUD Handbook (FHA’s mortgage insurance rules).
  2. Lender overlays: Individual lenders can and do impose stricter standards — often requiring scores from 580 to 620 or higher.

Why Lenders Use Overlays

Lenders add overlays to manage risk. Even if you meet FHA’s minimums, lenders evaluate:

  • Debt-to-income (DTI) ratio
  • Employment and income stability
  • Source of down payment
  • Recent credit history (late payments, collections, bankruptcies)

What Score Range Gets Approved Most Often?

In practice, most FHA approvals fall in the 600–699 range. Lower-score approvals (500–579) are possible but typically carry higher down payments, stricter DTI limits, and sometimes higher rates.

Next Steps — If Your Score Is Below 580

If you’re below 580, you have tactical options:

  • Consider targeted credit repair to remove inaccurate items and lower utilization.
  • Increase your down payment to reduce lender risk.
  • Shop lenders — some local Kentucky lenders have more flexible overlays than others.
  • Explore alternative programs: VA loans, USDA loans, and KHC programs may have different criteria.

Bottom Line

Meet FHA’s minimum of 500 to be eligible, but 580 or higher is the practical target to get the best terms (3.5% down and competitive rates). Your lender’s overlay will often be the deciding factor — so work with a lender who understands Kentucky’s market and can help you position your application.

Get pre-approved — Start your free application

About the author: Joel Lobb — Mortgage Broker specializing in FHA, VA, USDA, and KHC loans across Kentucky. Learn more about Joel or contact us to schedule a consultation.

Disclaimer: This content is provided for informational purposes and is not endorsed by FHA or HUD. Lending rules change; consult a loan officer for current eligibility and program details.

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