What is a Kentucky USDA Rural home loan?

via What is a Kentucky USDA Rural home loan?


If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.
Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.
They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.
They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area.
A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern  Kentucky .
There is a map link below to see the qualifying areas.
There is also a max household income limits with most cutoff starting at $76,000 for a family of four, and up to $98,000 for a family of five or more.
USDA requires 3 years removed from bankruptcy and foreclosure.

There is no max USDA loan limit.


I can answer your questions and usually get you pre-approved the same day. 

Call or Text me at 502-905-3708 with your mortgage questions.
Email Kentuckyloan@gmail.com


Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
10602 Timberwood Circle 
Louisville, KY 40223
Company NMLS ID #1364

Text/call:      502-905-3708

fax:            502-327-9119

Kentucky USDA Rural Development Loans

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USDA Rural Development mortgages for Kentucky Home buyers

The U.S. Department of Agriculture mortgage program is for Kentucky home buyers that have no money to put down, have a stable 2 year job history,  no bankruptcies or foreclosures in last 3 years and the new house payment should be close to or not more than 1/3 of your gross monthly income, this is called effective income.

There is also a test for compliance income meaning cannot make more than a certain amount to use the USDA loan program in Kentucky. Most Kentucky counties are limited to $82k for a household of four, and up to $109k household income for a family of five or more.


Thy used an automated underwriting system called GUS to pre-approved Kentucky home Buyers. If your score, middle credit score of the three main bureaus of experian, equifax, and trans union is below 640, you will automatically get downgraded to a refer and it will make it more difficult to get approved for the USDA loan.

I would suggest to get your scores up to 640 before submitting your loan application, however a lot of lenders including myself will go down to a 620 score, but be ready to hand over your blood type and other documents. 😂😂

You don’t have to be a Kentucky first time home buyer people with low to moderate incomes who want to buy a home in an eligible area. They typically don’t want you to own another piece of real estate and if you have access to 20% down payment they will not let you use the program.


This program is not intended for working farms, so if the property has farm income, i.e. crops, cattle, livestock, or other income this will not work for USDA loan programs.

They will do loans on mobile homes that meet FHA standards and that are brand new. They will not finance a used mobile home.


To get a Kentucky USDA loan, you work with a bank or other lender. The loan is backed by the USDA. You must be within certain income requirements — which depend on your area — and agree to use the home solely as a primary residence.


Like Kentucky FHA loans , Kentucky Rural Development USDA mortgages have fees. There is an upfront guarantee fee, which can be as much as 1.0 percentile of the principal loan amount, which is added to your loan. You also will have to pay a mortgage insurance fee which is .35% and this is called the annual fee. This is way cheaper than mortgage insurance premiums of 1.75% and .85% for the same comparison.

I you have questions about qualifying as first time home buyer in Kentucky for a Rural Housing or USDA loan , please call, text, email or fill out free qualification below for your next mortgage loan pre-approval.
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 http://www.nmlsconsumeraccess.org/