Kentucky First Time Home Buyer Loan Programs

The Secondary Market of Mortgage loans 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, very few lenders will go below the 620 threshold.   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:   FHA–620 minimum score VA—-620 minimum score Fannie Mae–620 minimum score USDA–640 minimum score KHC with Down Payment Assistance –620 minimum score.   As you can see, 620 is the minimum score with most lenders for a FHA, VA, or Fannie Mae loan, and 620 is required for the no down payment programs offered by USDA for Kentucky for First Time Home Buyers wanting to go no money down.

Mortgage Fico Scores used by Lenders.

Joel Lobb (NMLS#57916)
Senior Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708

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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#57916

— 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. Rates are subject to change and are subject to borrower(s) qualification.

What are the Kentucky FHA Credit Score Requirements for 2021 Mortgage Loan Approvals?

minimum credit score I need to qualify for a Kentucky FHA, VA, USDA and KHC Conventional mortgage loan02_by_the_numbers_what_your_FICO_score_means

USDA loans

USDA mortgages are home loans backed by the U.S. Department of Agriculture. They are available to low- to moderate-income borrowers looking to buy a home in a rural area.

That said, the definition of “rural” doesn’t necessarily mean out in the middle of nowhere. As you can see on this map, many towns and suburban areas qualify as rural.

USDA mortgages can be 100% financed, so they do not require a down payment. There is also no minimum credit score, but if your score is below 640, your application will need to be manually underwritten.

Mortgage insurance is not required for USDA loans. However, you will be charged a 1% upfront fee (called a guarantee fee) as well as a 0.35% annual fee.

Depending on your income, you can fall into one of two mortgage programs offered by the USDA.

If your income is in the “low” or “very low” threshold for your area, you may be eligible for the Direct Program. This program is funded directly by the federal government and may even include mortgage payment assistance.

If your income falls in the “low to moderate” range, you could be eligible for the Guaranteed Program. These mortgages are offered by USDA-approved lenders and are backed by the USDA.

VA home loans

The program includes both VA direct loans that are funded and handled by the government, as well as VA-backed loans that are handled by private lenders.

VA direct loans require no minimum credit score, no down payment and no PMI. They also generally have lower interest rates than you’ll find from other types of lenders.

But VA-backed loans may have credit score and other requirements, depending on your lender.

While you aren’t required to make a down payment or pay mortgage insurance, you will need to pay a one-time VA funding fee. This fee is calculated as a percentage of your loan amount and depends on various factors, including the loan type, number of previous VA loans you used, down payment amount, and so on.

FHA home loans

An FHA loan is a type of mortgage insured by the Federal Housing Administration. The loans are geared towards homebuyers with low credit scores and limited funds for a down payment. The benefits make FHA loans particularly attractive to first-time homebuyers, but repeat buyers also are eligible.

If your credit score is between 500 and 579, you will be required to make at least a 10% down payment. If your score is 580 or above, you’ll only be required to put 3.5% down.

With most FHA loans, you will need to pay the FHA’s mortgage insurance premiums (MIP). A premium will be charged at closing, plus you’ll be charged annual premiums.

If you put down 10% or more, you can remove the MIP after 11 years. But if your down payment is less than 10%, you’ll have to pay the annual MIP for the entire length of your loan.

That’s different from conventional loans, where mortgage insurance can usually be removed after you’ve built up 20% equity in your property. That is, after your LTV drops to 80% or lower.