Kentucky USDA Mortgage Benefits for First Time Buyers in Kentucky

100% mortgage financing at competitive fixed interest rates with USDA home loans Credit score requirements (620 to 640) are less restrictive than most conventional home loan programs.

Kentucky USDA loans also offer a single upfront mortgage insurance premium which may be financed. Currently only 1% of the loan and a monthly mi premium of .35% which is very cheap considering the lower credit score requirements and no money down financing. The mortgage insurance is the same for everyone, does not matter what your credit score is or how much down payment you have.

You can look up individual properties on USDA’s website here for Kentucky eligible areas.

You can also research single family housing income eligibility for Kentucky here.

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You may qualify if your Chapter 7 bankruptcy was discharged three years prior.

USDA loans can be used to finance most types of single family properties although some exception may apply. Homes must be used as borrowers’ primary residences and not used as second homes or rental properties.

Farms and commercial properties are not eligible through USDA Rural Housing Development Guaranteed Loans.

In many cases USDA permits sellers to contribute borrowers’ closing costs and can be financed up to the appraised value if home appraises for more.

Here are the highlights of USDA Mortgages
. Down Payment: 0% down payment
Closing Costs: up to 6%
. Credit Score: Minimum none–but lenders create overlays..typically 640 to get a GUS Automated approval
. Lower monthly mortgage insurance costs (PMI) versus FHA
. There is NO maximum set loan amount limit with USDA Rural Housing.
. No large savings are needed to qualify for USDA loans.
The debt to income, or DTI is limited to 45% – lower than most other loan programs.
The location of the home determines if it will be a USDA loan.
. The home can be a regular sale, short sale, foreclosure home or bank owned home single family, townhome or approved condo.
Mobile/Manufactured homes are allowed, new or used. Since May 5, 2025, USDA finances existing manufactured homes in Kentucky if the unit was built within 20 years of your closing date, sits on a permanent foundation, has never been installed at another homesite, is at least 400 square feet, and still carries both the HUD certification label and the HUD data plate, with no alterations made after it left the factory other than an engineered porch or deck. Many lenders still will not do them, but we do at EVO Mortgage. “Build on your own land” not available.
. Applies for First-time home buyers, or move-up buyers.
No special first-time buyer’s class, down payment assistance, or bond money is needed.
Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
EVO Mortgage
911 Barret Ave, Louisville, KY 40204
Company NMLS #1738461

Text/call: 502-905-3708

Equal Housing Lender

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