What is Kentucky  USDA Rural Development Guarantee?

Kentucky USDA Rural Development Guarantee USDA loans offer 100% financing options on home purchases in rural areas of Kentucky.  Properties though can be located within city limits and in subdivisions depending on the population density of that particular County of Kentucky. Jefferson and Fayette Counties, the two largest counties of Kentucky are not eligible for Rural Development Loans.

Some highlights of the KY Rural Housing loan program are:

• 100% financing on purchases with no down payment
• Low 30 year fixed rates. No prepayment penalty.
•  Rural Housing monthly guarantee fee of .35%
• Upfront Rural Housing funding fee of 1% of the loan amount and is financed into new loan
• No  Minimum credit scores but helpful to have 620 or higher with most USDA lenders with a 640 and get an automated underwriting approval thru Rural Housing’s underwriting engine – GUS-GUS Stands for the automated Underwriting system they use online to pre-approve you for a loan.
• Each lender will set their own credit and debt to income criteria
• No rental verification needed with GUS approval
• No foreclosures in the last 36 months, 
• A bankruptcy discharged at least 36 months

For a USDA eligible areas in Kentucky, see the property and income eligibility search, please click HERE.

Things to look for in your  Rural Housing property search in Kentucky below:

• Avoid homes in flood zones – RD is very restrictive for homes in flood zones. They will do them in flood zones just watch out for the costly premiums.
• Avoid homes with cisterns – they are extremely difficult to get financed
• Be aware that homes with wells and septic systems needed extra tests for contamination
• Avoid homes with any income-producing activities such as working farms, detached buildings with offices or car lifts for auto repairs, or anything else related to income-producing activities.
• Manufactured homes or doublewides must be brand new. No used mobile homes are allowed.
• Must meet FHA standards on appraisals so watch out for this on older homes with crawl spaces. 
• Must have a permanent heat source and no wood stoves as permanent heat sources
• Homes that are in need of major repairs.