Author: Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans
Thank you for visiting. I hope you find this website both informative and empowering as you explore your mortgage options. My goal is to help you feel confident in selecting the right home loan for your unique situation. I proudly serve all 120 counties in Kentucky, offering a full range of mortgage loan programs, including: FHA Loans VA Loans USDA Rural Housing Loans Fannie Mae Conventional Loans KHC Down Payment Assistance Programs With over 20 years of lending experience, I’ve had the privilege of helping more than 1,300 Kentucky families achieve their homeownership goals. Whether you're a first-time homebuyer or seeking a second opinion, I’m here to offer honest, no-pressure advice—always free of charge. I am dedicated to: Attending as many closings as possible Providing responsive, personalized service Ensuring quick, efficient, and accurate loan processing Making myself accessible every step of the way I've been consistently recognized as a top mortgage loan officer in Kentucky for VA, FHA, USDA, and KHC programs. I take pride in being thorough, transparent, and attentive with each and every client. Please take a moment to read my reviews below. If you have questions or need guidance, feel free to call or text me directly. Call/text at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications.
Email me at kentuckyloan@gmail.com with your questions
I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky. For the first time buyer, we offer Kentucky Housing or KHC loans with down payment assistance.
This website is not an government agency, and does
not officially represent the HUD, VA, USDA or FHA or any other government agency.
NMLS# 57916 http://www.nmlsconsumeraccess.org/
Joel Lobb Senior Loan Officer/p>
call/text phone: (502) 905-3708 kentuckyloan@gmail.com Company ID #1738461
EQUAL HOUSING LENDER
http://www.mylouisvillekentuckymortgage.com/
Getting Gift Funds for your down payment on a Kentucky FHA Mortgage.
What is the Great Way to do it?
To avoid getting turn down for your Kentucky FHA mortgage loan if you are getting a gift from your mom, dad or another family member, please follow these rules:
The source of the down payment must always show Kentucky FHA gift funds and their source (usually a relative). It cannot be a personal loan or cash.
Common Gift Fund Issues:
Scenario 1 – only gift funds being used in the transaction Gift amount: $5,000
Common submission problem:
Source of down payment submitted as “checking and savings account.”
Asset submitted as “checking account” with the financial institution as “Gift from Relative.”
Correct submission practice:
Source of a down payment should be submitted as an “FHA Gift from a relative for $5,000”
If funds are not yet in the bank account, DU should be submitted as miscellaneous assets, “Gift for $5,000”
Scenario 2 – (gift funds and borrower’s own funds being used in transaction) Gift amount: $5,000
Common submission problem:
Checking account has $7,000 in total – including the gift.
Source of down payment submitted as “checking and savings account.”
Asset submitted as “checking account”:
Financial institution with $7,000 AND
Miscellaneous asset, “Gift from relative of $5,000”
When ran this way, the gift is put through twice and assets are overstated by $5,000.
Correct submission practice:
Source of down payment should be submitted as an “FHA Gift from relative $5000.”
Since the gift fund is already in the Borrower’s bank account, DU should be submitted as “checking or savings” in ABC account in the amount of $7,000. DU will recognize that $5,000 of the $7,000 in the account is from a gift.
Scenario 3 – (gift funds and borrower’s own funds being used in transaction) Gift amount: $5,000Correct submission practice:
Checking account currently has $2,000. The $5,000 gift will be wired to the title company.
Source of down payment submitted as “checking and savings account.”
Asset submitted as “checking account:”
The financial institution with $7,000, AND
Miscellaneous asset, “Gift from relative of $5,000.”
Correct submission practice:
Source of down payment should be run as “FHA Gift from relative $5,000.”
Since gift funds will be provided to the title company and not the borrower:
DU should be submitted as checking or savings in ABC account in the amount of $2,000, AND
Does FHA Restrict down payment requirements on Identity of Interest Transactions?
The 85 percent maximum LTV restriction does not apply for Kentucky FHA Loans in regards to FHA Identity-of-Interest transactions under the following circumstances:
👇👇👇
FAMILY MEMBER TRANSACTIONS• the principal residence of another family member; or a property owned by another family member in which the borrower has been a tenant for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.
BUILDER’S EMPLOYEE PURCHASE• An employee of a builder, who is not a family member, purchases one of the builder’s new houses or models as a principal residence.
CORPORATE TRANSFER • A corporation transfers an employee to another location, purchases the employee’s house, and sells the house to another employee.
TENANT PURCHASE• the current tenant purchases the property where the tenant has rented the property for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.
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/
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency
Kentucky offers several grant programs to help residents achieve their dream of homeownership. These programs provide financial assistance to eligible buyers, making the purchase of a home more affordable. Here’s an overview of the current grant options available to Kentucky homebuyers:
1. Kentucky Housing Corporation (KHC) Down Payment Assistance Program
The KHC offers up to $12,500 in down payment assistance to eligible first-time homebuyers. This program can be used in conjunction with KHC’s first mortgage loans.
Eligibility:
Must be a first-time homebuyer or not have owned a home in the past three years
Meet income and purchase price limits, which vary by county
Complete a homebuyer education course
2. Kentucky Affordable Housing Trust Fund
This program provides funds to create or preserve affordable housing for low-income households. While not a direct grant to homebuyers, it can help create affordable housing opportunities.
3. USDA Rural Development Grant
Although not specific to Kentucky, this federal program is available in many rural areas of the state.
Key features:
Provides loans and grants for low-income individuals in rural areas
Can be used for home purchases or repairs
Income limits and location restrictions apply
4. Louisville Metro Down Payment Assistance Program
Specific to Louisville, this program offers forgivable loans of up to $25,000 to help with down payment and closing costs.
Eligibility:
Must be a first-time homebuyer
Income must be at or below 80% of the area median income
Property must be located within Louisville Metro
5. Lexington Homeownership Assistance Program
This program, specific to Lexington, provides up to $15,000 in down payment and closing cost assistance.
Eligibility:
Must be a first-time homebuyer
Income must be at or below 80% of the area median income
Property must be located within Lexington-Fayette Urban County
6. Individual Development Account (IDA) Program
While not exclusive to homebuying, this program can help prospective homeowners save for a down payment.
Key features:
Provides matching funds for savings (typically $2 for every $1 saved)
Can be used for homeownership, education, or starting a small business
Income and asset limits apply
7. Welcome Home Grant
Feature
Welcome Home Grant
KHC DPA
Type
Grant (no repayment if retained)
Repayable loan (second mortgage)
Amount Typical
Up to ~$20,000*
Up to $12,500
Payback
None if stays 5+ years*
Monthly payments over 15 yrs
Retention/Terms
5-year deed restriction
Standard mortgage second lien
Income Limits
≤80% MRB household
MRB or Secondary Market
Qualifying Income
Household inclusive
Dependent on mortgage product underwriter
First-Time Buyer
Optional
Depends on mortgage product
Access
Through FHLB member lenders
Through KHC-approved lenders
Availability
Seasonal, limited
Ongoing
How to Apply
To apply for these grants, contact the respective program administrators:
For city-specific programs: Contact your local housing authority or visit the city’s official website
Welcome Home Grant
Program is administered through participating FHLB Cincinnati member lenders (banks and credit unions that belong to the FHLB system).
Buyers must contact a participating mortgage lender early and reserve funds once the program opens (often first-come, first-served).
A fully executed purchase contract and signed mortgage application are typically required to reserve funds.
KHC DPA
Must work with a KHC-approved lender; you cannot apply directly to KHC.
The KHC-approved lender will bundle the first mortgage and the DPA second mortgage into one closing transaction.
Implication:
Both programs require lender participation. The Welcome Home Grant is tied to a different funding source (FHLB) than KHC’s internal DPA loan.
Remember that grant availability and terms may change, so it’s essential to check with the program administrators for the most up-to-date information. Additionally, many of these programs require participants to complete homebuyer education courses. These courses can provide valuable information about the homebuying process.
By taking advantage of these grant programs, Kentucky residents can make their dream of homeownership more attainable. Be sure to explore all options and consult with housing counselors or financial advisors to determine the best path to homeownership for your specific situation.
These HUD-owned listings are currently showing bid activity. All homes are sold as-is and bidding must be submitted through a HUD-registered selling broker.
Tip: HUD HomeStore lets you search by “State, City, ZIP, Address or Case #.”
(Open HUDHomeStore)
Current Underwriting Turn Times on Rural Housing USDA Loans in Kentucky
Kentucky Rural Housing USDA Turn Times
Are you interested in knowing the current status of USDA’s turn times? USDA provides this information on their website.
How long does it take to close a Kentucky USDA Rural Housing loan?
Last updated: January 25, 2026
Serving Kentucky homebuyers with USDA Rural Housing, FHA, VA, Conventional, and KHC Down Payment Assistance.
If you’re considering a USDA Rural Housing loan in Kentucky, your timeline depends on two underwriting stages. The lender underwriting phase is usually similar to FHA and VA timelines. The second phase is the final review completed by USDA Rural Development, and that is the step most buyers worry about.
Current Kentucky USDA turn times
USDA publishes state-by-state underwriting turn time updates on their official website. If you want the current Kentucky Rural Development review time, that public update is the most reliable benchmark.
Tip: Ask your lender what date your file will be submitted to Rural Development and whether the submission package is “clean” (complete). Clean packages move faster.
The two-step USDA approval process
Step 1: Lender underwriting
Income, assets, credit, and property reviewed
Typically tracks closely with FHA and VA underwriting speed
Most delays come from missing documentation or unclear income
Step 2: USDA Rural Development review
Final USDA approval after lender underwriting
State-specific turn times (Kentucky is published by USDA)
Turn times can move up or down based on volume
What affects closing time the most?
Document completeness at submission (the biggest factor)
Income type (hourly overtime, commission, self-employment, seasonal work)
Eligibility items (household income calculation, property eligibility, appraisal/repairs)
How quickly conditions are cleared once issued
Bottom line for Kentucky homebuyers
In today’s market, Kentucky USDA loans are moving consistently. The shutdown-era horror stories are not the norm. When the file is packaged correctly and conditions are handled fast, many USDA contracts can close within standard purchase timelines.
Get a free Kentucky USDA pre-approval
Want a realistic timeline based on your income, county, and property? Start with a proper pre-approval and a clean documentation plan.
Not inherently. The timeline depends on file quality, appraisal/repairs, and the current Rural Development review queue. A clean, complete submission is the best way to avoid delays.
What can I do to speed up my USDA closing?
Provide all documents upfront, respond to conditions quickly, and work with a lender who packages Rural Development submissions correctly the first time.
Does USDA publish Kentucky turn times?
Yes. USDA posts state-by-state underwriting/processing turn time information on their official site. That update is the best reference for what Kentucky is doing right now.
<!–
Infographic: Kentucky USDA Rural Housing turn times explained (2026).
–>
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If you’re looking to buy a home in rural Kentucky, USDA loans may let you buy with zero down payment. Income limits apply, and the property must be in an eligible rural area. The good news? USDA loans are currently open — no shutdown. Getting pre-approved is free and there’s no obligation. If you want to see if you qualify, let’s get started.
This article is too good not to be shared so it’s copied from The Washington Post.
When it comes to qualifying for a loan to buy a home or to refinance your mortgage, there are plenty of numbers to consider, such as your credit score and the appraised home value. Perhaps one of the most important numbers is your debt-to-income (DTI) ratio, which compares the minimum payments on all debt you must make each month with your gross monthly income.
“The DTI ratio is one of the most important considerations lenders take into account when evaluating the risk associated with a borrower taking on another payment,” says Paul Buege, president and chief operating officer of Inlanta Mortgage in Pewaukee, Wis. “The lower the DTI ratio a borrower has, the more confident the lender is about getting paid on time in the future based on the loan terms.”
Mobile Home Loans in Kentucky: FHA, VA, USDA, and Conventional Guidelines for 2026
Are you a Kentucky homebuyers looking for information on mobile home loans? Manufactured homes are an affordable option for many buyers. With flexible financing options like KentuckyFHA,VA, USDA, and Conventional loans, achieving homeownership in Kentucky is easier than ever. This guide provides the guidelines for each loan program. It also explains how you can qualify for a free mortgage loan approval for your mobile home in Kentucky.
Mobile Home Loan Options in Kentucky
Manufactured homes offer affordable housing solutions, but the financing process requires specific guidelines. Here’s a breakdown of the major loan programs for mobile home loans in Kentucky, their qualifications, and how they work.
FHA Mobile Home Loans in Kentucky
TheFHA Loan Program is one of the most popular options for manufactured homes in Kentucky. This program requires a low credit score and offers competitive terms. It is ideal for first-time buyers or those with less-than-perfect credit.
Property Types: Singlewide, Doublewide, and Triplewide manufactured homes.
Loan-to-Value (LTV): Up to 96.5% LTV for purchase and 80% for cash-out refinancing.
Underwriting: Manual underwrites are allowed.
Key Guidelines:
Homes must have been constructed after June 15, 1976.
The home cannot have been previously installed or occupied at another site.
Real property conversion is required at closing.
Primary residence only.
Advantages: No pricing adjuster for manufactured homes.
VA Mobile Home Loans in Kentucky
If you are a veteran or active-duty service member, consider the VA Loan Program. It is an excellent option for financing a mobile home. This program offers 100% financing with no down payment required.
Minimum Credit Score: 500 qualifying FICO score.
Property Types: Singlewide, Doublewide, and Triplewide units.
Homes must have been constructed after June 15, 1976.
The home cannot have been previously installed or occupied at another site.
Real property conversion is required at closing.
Primary residence only.
USDA Mobile Home Loans in Kentucky
The USDA Loan Programprovides 100% financing for manufactured homes in eligible rural areas of Kentucky. This loan is ideal for homebuyers looking for affordable financing with no down payment.
Minimum Credit Score: 581 qualifying FICO score.
Property Types: Singlewide, Doublewide, and Triplewide units.
Loan-to-Value (LTV): Up to 100% for purchases.
Home Requirements:
Must be a 2006 model or newer.
Located in a USDA-eligible rural area.
Underwriting: Manual underwriting is required (Max DTI: 29/41).
Key Guidelines:
The home cannot have been previously installed or occupied at another site.
Real property conversion is required at closing.
Primary residence only.
Eligible States: RD Program available in KY and select other states.
Conventional Mobile Home Loans in Kentucky
TheConventional Loan Program is another option for financing manufactured homes in Kentucky. It offers competitive terms for buyers with stronger credit profiles.
Minimum Credit Score: 620 qualifying FICO score.
Property Types: Singlewide, Doublewide, and Triplewide units.
Loan-to-Value (LTV): Up to 95% for purchases and 65% for cash-out refinancing.
Cash-out refinancing is not allowed on singlewide homes.
Key Guidelines:
Homes must have been constructed after June 15, 1976.
The home cannot have been previously installed or occupied at another site.
Real property conversion is required at closing.
Both primary residences and second homes are allowed.
Small pricing adjuster applies for manufactured homes.
Mobile Home Loans in Kentucky: FHA, VA, USDA, and Conventional Guidelines
If you’re a Kentucky homebuyer looking to finance a mobile home, understanding the different loan options and guidelines is essential. Below, we break down the requirements for FHA loans. We also cover the requirements for VA, USDA, and Conventional loans. This information will help you secure a mobile home loan in Kentucky. Learn how you can qualify for a free mortgage loan pre-approval today!
Loan Program
Credit Score Requirement
Eligible Property Types
Loan-to-Value (LTV)
Key Guidelines
Additional Notes
FHA Loan
500 minimum FICO score
Singlewide, Doublewide, Triplewide homes
Purchase/Rate-Term up to 96.5% LTV Cash-Out up to 80% LTV
– Manual underwriting allowed – Real Property Conversion allowed at closing – Primary residence only – Exempt from ATR Points/Fees Test
– No prior installation/occupancy at another site – No pricing adjuster for mobile homes – Home must be constructed after June 15, 1976
VA Loan
500 minimum FICO score
Singlewide, Doublewide, Triplewide homes
Purchase/Rate-Term up to 100% LTV Cash-Out up to 90% LTV
– Manual underwriting allowed – Real Property Conversion allowed at closing – Primary residence only – Exempt from ATR Points/Fees Test
– No prior installation/occupancy at another site – No pricing adjuster for mobile homes – Home must be constructed after June 15, 1976
USDA Loan
581 minimum FICO score
Singlewide, Doublewide, Triplewide homes
Purchase up to 100% LTV
– Manual underwriting required (Max DTI: 29/41) – Home must be a 2006 model or newer – Located in USDA-eligible rural areas – Primary residence only
– No prior installation/occupancy at another site – No pricing adjuster for mobile homes – RD Program available in specific states, including Kentucky
Conventional Loan
620 minimum FICO score
Singlewide, Doublewide, Triplewide homes
Purchase/Rate-Term up to 95% LTV Cash-Out up to 65% LTV
– Real Property Conversion allowed at closing – Primary and second homes allowed – Cash-Out not allowed on Singlewide homes
– No prior installation/occupancy at another site – Small 50 pricing adjuster for mobile homes – Home must be constructed after June 15, 1976
Why Choose a Mobile Home Loan in Kentucky?
Mobile homes, also known as manufactured homes, offer an affordable housing solution for Kentucky residents. Whether you’re a first-time homebuyer or looking to refinance your property, government-backed loans can help. Conventional options also provide flexible terms. These options make homeownership a reality.
How to Qualify for a Mobile Home Loan in Kentucky
Step 1: Check your credit score against the loan program requirements. The minimum FICO score is 500 for FHA and VA loans. For USDA loans, it is 550. Conventional loans require a score of 620.
Step 2: Ensure the mobile home meets eligibility guidelines (e.g., it must be a 2006 model or newer for USDA loans or constructed after June 15, 1976, for FHA, VA, and Conventional loans).
Step 3: Verify the home is not previously installed or occupied at another site.
Step 4: Contact a trusted Kentucky mortgage lender to get a free pre-approval for your mobile home loan.
Free Pre-Approval for Mobile Home Loans in Kentucky
Ready to take the next step? As a Kentucky homebuyer, you can benefit from free mortgage loan pre-approval for your mobile home loan. You might be interested in an FHA, VA, USDA, or Conventional loan. Our experts will guide you through the process. They will find the best option for your needs.
Why Choose a Mobile Home Loan in Kentucky?
Manufactured homes in Kentucky offer affordability, flexibility, and modern designs. Whether you’re a first-time homebuyer or someone looking to refinance your current mobile home, these loan programs provide tailored solutions. They meet your needs. With low credit score requirements and flexible terms, financing your manufactured home is within reach.
Get Pre-Approved for a Mobile Home Loan in Kentucky Today!
Ready to take the next step? Get afree mortgage pre-approval for your mobile home loan in Kentucky today. We offer expert guidance on FHA, VA, USDA, and Conventional loan programs. We’ll help you find the best financing option for your needs.
Contact us now to get started on your journey to owning a manufactured home in Kentucky. Call or apply online for your free pre-qualification and same-day approval!
The Best Kentucky Mortgage Loan Options When Looking for your first house in Kentucky Kentucky First-time Home Buyer Programs👀💯👇‼
Kentucky Mortgage Requirements for FHA, VA, USDA and Fannie Mae
FHA loan in Kentucky you will be confronted with minimum credit score requirements set forth by FHA and the lender. Even though FHA will insure the mortgage loan at a certain credit score, you will see that lenders will create “credit-overlays” to protect their risk and ask for a higher credit score.
So keep in mind when you are getting an FHA lenders will have higher credit score minimums in addition to the FHA Mortgage Insurance program.
For a Kentucky Homebuyer wanting to purchase a home or refinance their existing FHA loan, FHA requires a 3.5% down payment and the borrower must have a 580 FICO Credit Score. If the score is below 580, then you would need 10% down and still qualify on a manual underwrite.
You must have a FICO score of at least 500 to be eligible for a Kentucky FHA loan. If your FICO score is from 500 to 579, your down payment on the loan is 10 percent of the loan.
If your FICO score is 580 or higher, your down payment is only 3.5 percent. If your credit score is less than 580, it may be more cost-effective to take the necessary steps to improve your score before taking out the loan, rather than putting the money into a larger down payment.
How do they get the credit score: There are three main credit bureaus in the US. Equifax, Experian, and Transunion. The three scores vary but should be relatively close as long as the same creditors are reporting to the same bureaus.
You will get a variation in the scores due to all creditors or collection companies don’t report to all three bureaus. This is why they take the mid score. So if you have a 590 Experian, 680 Equifax, and 620 TransUnion, your qualifying credit score would be 620
Based on my experience with lenders that I deal with in Kentucky on FHA loans, most lenders require 620 middle credit score for consideration for loan approval.
How do they get the score: They take the mid score, so if you have a 590 Experian, 680 Equifax, and 620 TransUnion, your qualifying score would be 620.
If your score is below 620, a manual underwrite is where the AUS (Automated Underwriting System) refers your loan to a human being, and they look at the entire file to see if they can overturn and approve the mortgage loan because the Desktop Underwriting Automated Software could not approve you.
With scores below 620, they typically will want to verify your rent history, have no bankruptcies in the last two years, and no foreclosures in the last 3 years.
If you have had any lates since the bankruptcy this will probably result in a denial on a refer manual underwrite file.
Your max house payment will be set at 31% of your gross monthly income, and your new house payment plus the bills you are paying on the credit report cannot be more than 43%.
Typically, on scores below 620 for FHA loans, they will also look at reserves or money you have saved up after the loan is made to try and qualify you. For example, if you have a 401k or savings account that has at least 4 months reserves (take your mortgage payment x 4) and this would equal your reserves. They look at this as a rainy day fund and could help you keep up on your bills if you were unemployed or could not work.
The first thing to keep in mind is that qualifying for a mortgage involves a lot more than just a credit score. While your FICO score is a very important ingredient, it is just one factor. Lenders also look at your income and level of debt, among other things.
A FICO score between 600 and 640 is considered fair to good credit. But keep in mind, this range of credit scores does not guarantee you will qualify for a mortgage, and if you do qualify, it won’t get you the lowest interest rate possible. Still, to buy a home aim for a score of at least 620, recognizing that other factors weigh in the decision and that some banks may require a higher score.
What credit score do you need to get a low rate mortgage?
It uses to be that a score of about 720 would yield the lowest mortgage rates available. Today, the best rates kick in with a FICO score of 760. And interest rates go up significantly as your credit score drops. To give you an idea, the following table shows current rates by credit score and calculates a monthly principal and interest payment based on a $300,000 loan:
lenders will pull what they call a “tri-merge” credit report which will show three different fico scores from Transunion, Equifax, and Experian. The lenders will throw out the high and low scores and take the “middle score.” For example, if you had a 614, 610, and 629 score from the three main credit bureaus, your qualifying score would be 614.
So if you only have one score, you may not qualify. Lenders will have to pull their own credit report and scores so if you had it ran somewhere else or saw it on a website or credit card you may own, it will not matter to the lender, because they have to use their own credit report and scores.
Lastly, lenders will pull your credit report for free nowadays so this should not be a big deal as long as your scores are high enough.
offered by FHA, VA, USDA, Fannie Mae, and KHC all have their minimum fico score requirements and lenders will create overlays in addition to what the Government agencies will accept, so even if on paper FHA says they will go down to 580 or 500 in some cases on fico scores,
If you have low fico scores it may make sense to check around with different lenders to see what their minimum fico scores are for loans.
The lenders I currently deal with have the following fico cutoffs for credit scores:
As you can see, different government-backed loan programs have different minimum score requirements with most lenders for an FHA, VA, or Fannie Mae loan, and 620 is required for the no down payment programs offered by USDA and KHC in Kentucky for First Time Home Buyers wanting to go no money down.
By paying down your credit card balances (credit utilization) and having a good pay history (payment history) ,this is the best way to raise your score.
The credit bureaus don’t update immediately, so I would not add to the balance or open any new bills or have any other lender do an inquiry on your credit report while we wait for the scores to hopefully go up in the next 30 days. Try to keep everything status quo and make your payments on time and keep your balances low or lower than what is now reporting on the credit report.
How to improve your credit score!
Pay Every Single Bill on Time, or Early, Every Month
Please understand one thing; paying your bills on time each month is the single most important thing you can do to increase your credit scores.
Depending on the credit bureau, there are 4 or 5 main items that determine everyone’s credit score. Of those items, your history of paying bills makes up about 35% of the score. THIS IS HUGE!
Paying your bills on time shows lenders that you are responsible. It will also spare you from paying late fees whether it is a charge from a credit card or an added fee from your landlord.
Use a calendar, or a phone app, or some other organized system to make sure that you pay your bills on time every single month.
Another big factor in calculating a credit score is the amount of credit card debt. Credit bureaus look at two things when analyzing your credit cards.
First, they look at your available credit limit. Second, they look at the existing balance on each card. From these two figures an available ratio is developed. As the ratio goes higher, so too will your credit score increase.
Here is one simple example. Suppose a person has the following credit cards, corresponding balances, and credit limits
Credit Card
Current Balance
Credit Limit
Chase Visa
$105
$1,000
MarterCard from local bank
$236
$1,500
BP MasterCard
$87
$500
Totals
$428
$3,000
From these numbers, we get the following calculation
$428/$3,000 = 14%
In other words, the person is using 14% of their available credit and they have 86% available credit. The closer that ratio is to 100%, the better the credit score will be.
MAIN TIP: Keep all credit card balances as low as possible.In this particular example, if they had a problem with their car, or needed medical attention or some other emergency, the person would have the money necessary to handle the situation without incurring new debt. This is wise on the consumer’s part and lenders like to see this kind of money management.
Credit Cards Part 2: 1 or 2 is Better Than a Wallet Full
The previous example showed a person that utilized just three credit cards. This is much better than someone who has 5+ credit cards, all with available balances. Why? Lenders do not like to see someone that has the potential to get too far in debt in a short amount of time.
Some people have 5, 10 or more credit cards and they use many of them. This shows a lack of restraint and control. It is much better, and neater, to have only 2 or 3 cards with low rates that handle all of your transactions. A lower number of cards are easier to manage and it does not give a person the temptation to go on a huge shopping spree that could take years to payoff.
MAIN TIP: Try to limit yourself to no more than 2-3 credit cards.
Keep the Good Stuff Right Where it is
Too many people make the mistake of paying off old debts, such as old credit cards, and then closing the account. This is actually a bad idea.
A small part of the credit score is based on the length of time a person has had credit. If you have a couple of credit cards with a long track history of making payments on time and keeping the balance at a manageable level, it is a bad idea to close out the card.
Similarly, if you have been paying on a car or motorcycle for a long time, do not be in a hurry to pay off the balance. Continue to make the payments like clockwork each month.
An account that has a good record will help your scores. An account that has a good record and multiple years of use will have an even better impact on your score.
MAIN TIP: Keep old accounts open if you have a good payment history with them.
Stop Filling Out Credit Applications
Multiple credit inquiries in a short amount of time can really hurt your credit scores. Lenders view the various inquiries as someone that is desperate and possibly on the verge of making a bad financial choice.Too many people make the mistake of getting more credit after they are approved for a loan. For example, if someone is approved for a new credit card, they feel good about their finances and decide to apply for credit with a local furniture store. If they get approved for the new furniture, they may decide to upgrade their car. This requires yet another loan. They are surprised to learn that their credit score has dropped and the interest rate on the new car loan will be much higher. What happened?
If you currently have 2 or 3 credit cards along with either a car loan or a student loan, don’t apply for any more debt. Make sure the payments on your current debt are all up to date and focus on paying them all down.
In a few months of making timely payments your scores should noticeably go up.
MAIN TIP: Limit your new loans as much as possible
Which credit scores do mortgage lenders use to qualify people for a mortgage?
While it’s common knowledge that mortgage lenders use FICO scores, most people with a credit history have three FICO scores, one from each of the three national credit bureaus (Experian, Equifax, and TransUnion).
Which FICO Score is Used for Mortgages
Most lenders determine a borrower’s creditworthiness based on FICO® scores, a Credit Score developed by Fair Isaac Corporation (FICO™). This score tells the lender what type of credit risk you are and what your interest rate should be to reflect that risk. FICO scores have different names at each of the three major United States credit reporting companies. And there are different versions of the FICO formula. Here are the specific versions of the FICO formula used by mortgage lenders:
Equifax Beacon 5.0
Experian/Fair Isaac Risk Model v2
TransUnion FICO Risk Score 04
Lenders have identified a strong correlation between Mortgage performance and FICO Bureau scores (FICO score). FICO scores range from 300 to 850. The lower the FICO score, the greater the risk of default.
Which Score Gets Used?
Since most people have three FICO scores, one from each credit bureau, how do lenders choose which one to use?
For a FICO score to be considered “usable”, it must be based on adequate, concrete information. If there is too little information, or if the information is inaccurate, the FICO score may be deemed unusable for the mortgage underwriting process. Once the underwriter has determined if a score is usable or not, here’s how they decide which score(s) to use for an individual borrower:
If all three scores are different, they use the middle score
If two of the scores are the same, they use that score, regardless of whether the two repeated scores are higher or lower than the third score
Lenders have identified a strong correlation between Mortgage performance and FICO Bureau scores (FICO score). FICO scores range from 300 to 850. The lower the FICO score, the greater the risk of default.
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). USDA Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation
Kentucky First-Time Home Buyer Programs 2026: Complete Guide to FHA, VA, USDA & KHC Loans
Kentucky First-Time Home Buyer Programs in 2026: Your Complete Guide to FHA, VA, USDA, Conventional, and KHC Loans
Buying your first home in Kentucky in 2026? You’re entering a market with more options than ever before. Updated loan limits, competitive interest rates, and powerful down payment assistance programs are making homeownership more accessible for Kentucky families across all 120 counties.
What are the best Kentucky homebuyer programs for 2026?
The main options for Kentucky homebuyers in 2026 include Conventional Loans, FHA Loans, VA Loans, USDA Loans, and Kentucky Housing Corporation (KHC) Down Payment Assistance programs. Each offers distinct advantages depending on your credit score, down payment savings, income level, and location.
This comprehensive guide breaks down every program, updated with 2026 loan limits, credit requirements, and qualification guidelines to help you make informed decisions about your home purchase.
Conventional Mortgage Loans in Kentucky (2026)
Conventional loans remain the most popular choice for Kentucky homebuyers with good credit and stable income. These loans are not government-backed, which means they follow stricter underwriting standards but offer significant benefits for qualified borrowers.
2026 Conventional Loan Requirements:
Credit Score: Minimum 620 (preferred 740+ for best rates)
Down Payment: As low as 3% for qualified first-time buyers; 5% for repeat buyers
Debt-to-Income Ratio (DTI): Maximum 43-50% (varies by lender and compensating factors)
2026 Loan Limits for Kentucky:
Single-Family Home: $832,750
Two-Unit Property: $1,066,000
Three-Unit Property: $1,288,750
Four-Unit Property: $1,601,750
Additional Requirements:
Work History: Two years of consistent employment in the same field or industry
Bankruptcy & Foreclosure Waiting Periods:
No foreclosure in the past 7 years
No Chapter 7 bankruptcy in the past 4 years
Chapter 13 bankruptcy allowed after 2 years of discharge with court approval
Loan-to-Value (LTV): Up to 97% for qualified first-time buyers
Private Mortgage Insurance (PMI): Required for down payments under 20%; can be canceled once you reach 20% equity
Required Documentation:
Last two years of W-2 forms
Last 30 days of pay stubs
Two years of federal tax returns (self-employed or commissioned income)
Last two months of bank statements
Tri-merge credit report from lender
Why Choose Conventional? Borrowers with credit scores of 740+ and 20% down payments often prefer conventional loans because they can avoid mortgage insurance entirely and typically secure the lowest interest rates available.
Kentucky FHA Loans (2026)
FHA loans are designed specifically for first-time homebuyers and those with lower credit scores or limited savings. Backed by the Federal Housing Administration, these loans offer the most flexible qualification guidelines of any mortgage program.
2026 FHA Loan Requirements:
Credit Score:
580+ for 3.5% down payment
500-579 for 10% down payment
Down Payment: As low as 3.5%
Debt-to-Income Ratio:
Front-End Ratio: Maximum 31% (housing costs only)
Back-End Ratio: Maximum 43-57% with compensating factors
2026 FHA Loan Limits for All Kentucky Counties:
Single-Family Home: $541,287
Two-Unit Property: $693,050
Three-Unit Property: $837,700
Four-Unit Property: $1,041,125
FHA Waiting Periods:
Foreclosure: 3 years minimum
Chapter 7 Bankruptcy: 2 years minimum
Chapter 13 Bankruptcy: 12 months of on-time payments with trustee approval
Work History Requirements:
Two years of steady employment in the same industry
Gaps exceeding 6 months in the past 2 years must be explained
Multiple job changes (3+ in 12 months) may require additional documentation
Recent college graduates can substitute education for work history
FHA Mortgage Insurance:
Upfront Premium: 1.75% of loan amount (can be financed into loan)
Annual Premium: 0.45% to 1.05% (paid monthly), based on loan amount and down payment
Required Documentation:
Same as conventional loans, plus:
12-24 months of rental payment history (if manually underwritten)
Verification of non-traditional credit (if applicable)
Why Choose FHA? Perfect for first-time buyers rebuilding credit, those with limited savings, or anyone who has experienced past financial challenges. FHA loans are more forgiving and accessible than conventional financing.
Kentucky VA Home Loans (2026)
VA loans provide unmatched benefits for eligible veterans, active-duty service members, National Guard members, Reservists, and qualifying surviving spouses. These loans eliminate major barriers to homeownership.
2026 VA Loan Benefits:
Down Payment: Zero down payment required
Mortgage Insurance: No monthly PMI required (major savings)
Credit Score: Minimum 580-620 (varies by lender)
Debt-to-Income Ratio: No maximum DTI with sufficient residual income
2026 VA Loan Limits for Kentucky:
Veterans with full entitlement have no loan limit
Partial entitlement follows conforming limits: $832,750 for single-family homes
VA Loan Requirements:
Certificate of Eligibility (COE): Required; obtain through VA website or your lender
Work History: Two years of consistent employment
Waiting Periods:
No foreclosure in the past 2 years
No Chapter 7 bankruptcy in the past 2 years
Chapter 13 bankruptcy allowed after 12 months with trustee approval
Loan-to-Value (LTV): Up to 100% for purchases; 100% for cash-out refinances
VA Funding Fee: 1.25% to 3.3% of loan amount (waived for disabled veterans)
Required Documentation:
Certificate of Eligibility (COE)
DD-214 (for veterans)
Statement of Service (for active duty)
Standard income/asset documentation
Why Choose VA? The combination of no down payment, no monthly mortgage insurance, and competitive interest rates makes VA loans the most powerful financing option available for eligible borrowers.
USDA Loans in Kentucky (2026)
USDA loans offer 100% financing for eligible rural and suburban properties throughout Kentucky. Despite the “rural” designation, many suburban areas qualify, including parts of major metro areas.
2026 USDA Loan Requirements:
Credit Score: Minimum 620 (preferred 640+ for automated approval)
Down Payment: Zero down payment required
Debt-to-Income Ratio:
Front-End: Maximum 29-32%
Back-End: Maximum 41-45% (higher with compensating factors through GUS system)
Income Limits: Must not exceed 115% of area median income (varies by county and household size)
Property Eligibility: Home must be in USDA-designated eligible area
USDA Waiting Periods:
Foreclosure: 3 years minimum
Chapter 7 Bankruptcy: 3 years minimum
Chapter 13 Bankruptcy: 12 months of on-time payments with trustee approval
USDA Guarantee Fee:
Upfront Fee: 1% of loan amount (can be financed)
Annual Fee: 0.35% (paid monthly)
Work History Requirements:
Two years of steady employment
Seasonal or temporary work may qualify with sufficient documentation
Why Choose USDA? Perfect for buyers purchasing in eligible rural or suburban areas who want 100% financing. Many Kentucky locations qualify, including areas near Louisville, Lexington, and other cities.
The Kentucky Housing Corporation offers the most comprehensive suite of programs for first-time homebuyers in the state, combining competitive interest rates with substantial down payment assistance.
KHC Down Payment Assistance Program (2026):
Assistance Amount: Up to $12,500
Structure: Second mortgage at 3.75% interest rate for 10 years
Usage: Can be used for down payment, closing costs, and prepaid expenses
Repayment: Monthly payments required; not forgivable
2026 KHC Program Options:
1. Conventional Preferred Program
Down payment as low as 3%
Available to low- to moderate-income borrowers
Private mortgage insurance required
Income limits apply (varies by county)
2. Conventional Preferred Plus 80 Program
Down payment as low as 3%
Available to higher-income borrowers (up to $181,300+ depending on county)
First-time and repeat buyers eligible
PMI required
3. Mortgage Revenue Bond (MRB) Program
Below-market interest rates
Available with FHA, VA, USDA, or Conventional loans
First-time buyer requirement (waived in targeted areas)
Maximum purchase price: $544,232
2026 KHC Income Limits (Examples):
Income limits vary by county and household size. Here are representative examples:
Jefferson County (Louisville): $95,000-$181,300 (depending on program and household size)
Fayette County (Lexington): $92,000-$176,000
Rural Counties: Generally lower limits; check with KHC-approved lender
KHC Purchase Price Limits (2026):
Maximum Purchase Price: $544,232 for most programs
Some programs have lower limits; verify with your lender
KHC Eligibility Requirements:
Must purchase primary residence in Kentucky
Property must meet KHC appraisal standards
Income and purchase price limits apply
First-time homebuyer requirement for most programs (waived in targeted areas)
Must complete homebuyer education course
Why Choose KHC? The combination of below-market interest rates and up to $12,500 in down payment assistance can save Kentucky homebuyers thousands of dollars over the life of their loan.
2026 Kentucky Welcome Home Grant
The Kentucky Welcome Home Grant is expected to return in March 2026, offering additional down payment assistance to eligible Kentucky homebuyers.
2026 Welcome Home Grant Details:
Grant Amount: To be announced (historically $7,500-$20,000)
Availability: First-come, first-served basis; funds typically depleted within weeks
Structure: Forgivable grant (not a loan)
Eligibility: Income limits and first-time buyer requirements apply
Launch Date: Expected March 2026
Important: The Welcome Home Grant consistently sells out within days of opening. Get pre-approved now and be ready to act immediately when the program launches.
Comparison: Kentucky Mortgage Loan Program Requirements (2026)
Program
Min. Credit Score
Down Payment
Max DTI
2026 Loan Limit (1-Unit)
Conventional
620
3-5%
43-50%
$832,750
FHA
580
3.5%
31/43-57%
$541,287
VA
580-620
0%
No max*
$832,750 (or unlimited)
USDA
620
0%
29/41-45%
Based on income limits
KHC Programs
Varies
3-3.5%
Varies by loan type
$544,232
*VA loans evaluate residual income rather than strict DTI limits
Step-by-Step: How to Apply for a Kentucky Home Loan in 2026
Step 1: Check Your Credit Score
Obtain free credit reports from all three bureaus
Review for errors and dispute inaccuracies
Work on improving your score if below 620
Step 2: Calculate Your Budget
Determine how much you can afford monthly
Factor in property taxes, insurance, HOA fees
Use online mortgage calculators for estimates
Step 3: Get Pre-Approved
Contact a Kentucky-licensed mortgage professional
Submit required documentation
Receive pre-approval letter (typically same-day)
Step 4: Choose Your Loan Program
Compare options based on your situation
Consider credit score, down payment, income, and location
Ask about combining KHC assistance with other programs
Step 5: Find Your Home
Work with a licensed Kentucky real estate agent
Stay within your pre-approved amount
Ensure property meets program requirements
Step 6: Submit Full Application
Complete formal loan application
Provide any additional documentation requested
Coordinate home inspection and appraisal
Step 7: Close on Your Home
Review closing disclosure carefully
Bring required funds to closing
Sign documents and receive keys
Frequently Asked Questions
Q: Can I combine KHC down payment assistance with FHA or VA loans?
A: Yes! KHC assistance can be layered with FHA, VA, USDA, or Conventional loans, making it possible to buy with minimal out-of-pocket costs.
Q: What’s the difference between the Welcome Home Grant and KHC down payment assistance?
A: The Welcome Home Grant is a forgivable grant (not repaid), while KHC down payment assistance is a second mortgage with monthly payments at 3.75% interest.
Q: Do all Kentucky counties have the same FHA loan limits?
A: Yes. For 2026, all 120 Kentucky counties use the same FHA floor limit of $541,287 for single-family homes.
Q: Can I buy a multi-unit property with these programs?
A: Yes! FHA, VA, and Conventional loans all allow 2-4 unit purchases, with the requirement that you occupy one unit as your primary residence.
Q: How long does the mortgage approval process take?
A: Pre-approval typically happens within 24 hours. Full approval to closing typically takes 30-45 days depending on the loan type and your responsiveness.
Q: What if I have student loan debt?
A: All programs allow student loan debt. Lenders will calculate either 0.5-1% of the balance or use your actual payment amount in DTI calculations.
Why Work With a Kentucky Mortgage Specialist?
Navigating multiple loan programs, down payment assistance options, and changing requirements requires expertise and local knowledge. Working with a Kentucky-licensed mortgage professional who specializes in first-time homebuyer programs ensures:
✓Accurate Pre-Approval: Same-day approvals with correct numbers
✓Program Expertise: Knowledge of all available KHC and state programs
✓Competitive Rates: Access to wholesale pricing and special programs
✓Local Market Knowledge: Understanding of Kentucky’s 120 counties
✓Personalized Service: One-on-one guidance throughout the entire process
Get Started Today
Ready to explore your Kentucky home buying options? The 2026 loan limits and programs provide more opportunities than ever for Kentucky families to achieve homeownership.
Joel Lobb
Mortgage Loan Officer – Kentucky Mortgage Loan Specialist
20+ Years Experience | 1,300+ Families Helped
NMLS Personal ID: 57916
Company NMLS ID: 1738461
Services Available:
✓ Free mortgage applications with same-day approval
✓ All 120 Kentucky counties served
✓ FHA, VA, USDA, Conventional, and KHC programs
✓ Down payment assistance guidance
✓ First-time homebuyer counseling
Equal Housing Lender | Licensed for Kentucky Mortgage Loans Only
Disclaimer: This website is not endorsed by or affiliated with the FHA, VA, USDA, or any government agency. Information provided is for educational purposes. Loan programs, rates, and requirements subject to change. All borrowers must meet program eligibility requirements.
2026 Kentucky Housing Market Outlook
Kentucky’s housing market continues to show strength in 2026, with steady home price appreciation and competitive interest rates creating favorable conditions for buyers. The increased loan limits provide greater purchasing power, while expanded down payment assistance programs make homeownership more accessible.
Whether you’re a first-time buyer, a veteran, or someone looking to purchase in a rural area, Kentucky’s diverse loan programs offer a pathway to homeownership that fits your unique financial situation.
Understanding how to get the best mortgage rates today in Kentucky involves several factors. You need to learn the differences between Kentucky FHA, VA, USDA, and conventional home loans. Each loan type has its own criteria, benefits, and rate determinants. Here’s an overview of how to obtain the best rates for each:
1. Kentucky FHA Loans
Federal Housing Administration (FHA) loans are popular among Kentucky first-time homebuyers. They offer flexible credit requirements. They also require low down payments.
Best Practices to Secure the Best Rates:
Credit Score: Aim for a score of 720 or higher. While Kentucky FHA loans accept lower scores, higher scores typically secure better rates.
Down Payment: Putting down more than the minimum 3.5% can sometimes lower the interest rate. 500 is the minimum score with 10 % down and 580 and above score will you get you to a minimum down payment of 3.5%
Debt-to-Income Ratio (DTI): Maintain a DTI of 56.99% or lower to increase your chances of getting a favorable rate.
Shopping Around: Compare offers from different lenders in Kentucky for FHA lenders. Each lender may have different rates and terms for FHA loans.
Larger Loan amounts: will yield better rates. A lender will get you a better rate if the loan is larger due to they will make more money on the loan vs a small loan amount.
2. Kentucky VA Loans
Veterans Affairs (VA) loans are available to veterans, active-duty service members, and certain members of the National Guard and Reserves. These loans often offer lower rates and do not require a down payment or private mortgage insurance (PMI).
Best Practices to Secure the Best Kentucky VA loan Rates:
Credit Score: A score of 720 or higher is generally preferred, although some lenders might accept lower scores. No minimum score set by VA lenders in Kentucky
Service History: Ensure your service record meets the eligibility requirements. 2 year work history usually needed
Loan Comparison: Even within VA loans, rates can vary between lenders. Obtain multiple quotes to find the best rate.
Funding Fee: Understanding the VA funding fee and including it in your budget can help in comparing the true cost of loans.
3. Kentucky USDA Loans
United States Department of Agriculture (USDA) loans are designed for rural and suburban homebuyers who meet certain income requirements.
Best Practices to Secure the Best Kentucky USDA Loan Rates:
Credit Score: Aim for a score of 720 or higher to access better rates. No minimum score for USDA loans
Income Limits: Ensure your income falls within the USDA’s eligibility guidelines for your area.
Property Location: The home must be in an eligible rural or suburban area. Use the USDA’s property eligibility tool to confirm.
Guaranteed Loan Program: USDA offers both direct and guaranteed loan programs. The guaranteed loan program often has more favorable terms.
4. Kentucky Conventional Loans
Conventional loans are not insured or guaranteed by the government and typically require higher credit scores and down payments. They are much more sensitive to down payments. Credit score is important for getting the best rate. Debt to income ratio is also crucial for loan approval. They will typically have a higher rate than government backed mortgage loans in Kentucky like FHA, VA, and USDA. However, the mortgage insurance is cheaper. It is not for the life of the loan and requires less red tape to close.
Best Practices to Secure the Best Conventional loan Rates:
Credit Score: A score of 780 or higher is ideal to secure the best rates. Minimum credit score for Conventional loans in Kentucky is 620
Down Payment: A larger down payment (40% or more) can significantly lower your interest rate and eliminate PMI.
DTI Ratio: A DTI ratio of 45% or lower is preferred.
Loan Term: Consider shorter loan terms (15 or 20 years) for lower rates, though monthly payments will be higher.
Large Loan Amounts: Larger Loan Amounts will yield better rates vs a small loan amount.
General Tips for All Loan Types to get the lowest Mortgage Rates in Kentucky
Credit Score, debt ratio, : Maintain a strong credit history, stable income, and low debt levels.
Rate Shopping: Use online comparison tools and consult multiple lenders. Rates can vary significantly with each lender.
Points: Consider paying points to lower your interest rate. This is an upfront fee that can reduce your monthly payments over the loan term.
Pre-approval: Get pre-approved for a mortgage to understand what rate you qualify for and to strengthen your offer when shopping for a home.
Locking Loan: Lock in for a shorter term. For example, lock in the rate for 30 days vs 60 days and you will get a better rate. Be aware if you go past the lock the date, you will be subject to worse case pricing.
By understanding the specific requirements and best practices for each loan type, you can position yourself to secure the most favorable mortgage rates in Kentucky.–
Kentucky Mortgage Loan ExpertFHA | VA | USDA | KHC Down Payment Assistance | Fannie MaeEqual Housing Lender. This is not a commitment to lend. All loans are subject to credit approval and program requirements.
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