Why use USDA financing for your next home purchase in Kentucky?
There are very few ways to purchase a home these days in Kentucky without a typical 3.5% down payment that is required for an FHA loans in Kentucky. Many home buyers in Kentucky are surprised to find that a USDA Home Loan offers a lower payment than an FHA loan, even with NO DOWN PAYMENT! “How can this be?” you ask. The reason is because a Kentucky USDA home loan requires much lower MORTGAGE INSURANCE.
Kentucky FHA Loan vs. Kentucky USDA Loan Comparison
| FHA | USDA |
| $150,000 purchase price | $150,000 purchase price |
| 4.75% 30 year fixed rate | 4.75% fixed rate |
| 1.75% up front mortgage insurance (financed) | 1.0% Guarantee Fee (financed) |
| .85% month mi premium | .35% monthly mi premium |
| $871.19 P&I monthly payment with monthly mortgage insurance (not including taxes and insurance) |
$826.86 P&I monthly payment (not including taxes and insurance |
| $5250.00 required down payment | $0 down payment |
A rural housing USDA loan saved this client $46.74 per month and they made NO DOWN PAYMENT!
Other benefits of Kentucky USDA Home Loans
- Low up front closing costs
- In some cases closing costs can be financed if home appraises for more than purchase price
- Minor credit problems OK with a minimum credit score of 581***Most lenders will want a 620 or 640 score or higher.
- No maximum loan amounts just household income limits based on which Kentucky County you are buying a home.
- Fixed Rates Only for 30 years with no prepay penalty
A Kentucky USDA rural housing loan strive to find anyway possible to approve your loan, however there are some cases where a USDA Loan is not an option;
a previous bankruptcy must be discharged 3 years,
you must occupy the home being purchased as your primary residence,
the home may not be used for income producing purposes (farm, rental, etc.),
Senior Loan Officer
