Kentucky USDA Rural Development Loan Program:

Single Family Housing Guaranteed

The following is a list of the “nuts and bolts” of the Kentucky USDA Rural Development Loan Program:

  • The house has to be located in a Kentucky USDA Rural Development Loan Program: area designated as an USDA eligible area.
  • To determine the USDA approved designated areas, reference the following USDA map instructions:
    • Go the USDA Rural Development Website
    • On the top left hand side, click “Single Family Housing Guaranteed”
    • Click “Accept”
    • Enter the property address to determine if a specific house or general area is located in an USDA eligible area
  • The household income must be moderate as determined by USDA. The USDA Loan evaluates household income, which includes the combined income of all adults living in the household; even if they are not on the mortgage loan. Click here to determine your household income eligibility.
  • If it appears that the household income exceeds the moderate income thresholds established by USDA, do not throw in the towel just yet. USDA allows for deductions for child care and medical expenses as well as for children, students, and elderly members of the household that will be living in the USDA financed property.
  • This is not a farmer’s loan. As a matter of fact, the property cannot have any income producing capabilities, and when the land value of the property exceeds 30% of the appraised value additional requirements must be met.
  • The house has to be in fairly good condition. The appraisal type being utilized is an FHA appraisal, so make sure that there are not any safety related challenges(i.e. missing banisters, peeling paint, exposed electric).
  • This is a true no money down loan program. Or stated differently, you do not need a down payment.
  • While there is a monthly mortgage insurance premium (or prorated portion of an Annual Fee), the cost of the monthly mortgage insurance is 59% less than a comparable FHA Loan. This makes the USDA loan more affordable than an FHA Loan when analyzing down payment requirements and monthly mortgage payments.
  • The seller can pay all closing costs and pre-paids (i.e. escrows). Often the home buyer’s only out-of-pocket cost as part of the purchase transaction is approximately $550 for the appraisal report.
  • If the house appraises for more than the purchase price, the difference can be used to pay for closing costs and pre-paids (i.e. escrows). Only the USDA Loan program allows for closing costs to be rolled on top of the purchase price.
  • USDA has no restriction on whether you are a first time home buyer or move-up home buyer.
  • This loan program is only for primary residence (i.e. no second home or investment properties).
  • You should not own any other functional property; although there are some circumstances under which USDA may waive this requirement.
  • The preferred minimum credit score is 640. However, if you have a documented rent history, no late payments on your credit cards, and no new collections within the last 12 months, a credit score as low as 620 may be considered.
  • All property types including single family homes, town homes, modular, and even condominiums qualify for this loan program. Manufacture homes such as single and doublewides constructed prior to January 1, 2006 do not qualify.
  • There is no maximum mortgage amount, but the house does have to be considered moderate in a size

Kentucky Rural Housing USDA Program Mortgage Insurance Requirements


*Upfront guarantee fee will change from 2.75% to 1.0%
Annual fee will change from 0.50% to 0.35%

Kentucky USDA Loans are not just for small farm communities, but rather they can help many lower-income individuals or households purchase homes in many small cities, towns and townships!

USDA Loan Payment Calculator: Calculate Loan Guarantee Eligibility ...




Kentucky Rural Housing USDA Highlights for 2021

Kentucky USDA Rural Development Guaranteed Lending Program is geared to assist low to moderate income families realize home ownership. Below are some important highlights:

USDA/Rural Development. The Annual Guarantee Fee is set to INCREASE October 1.
USDA/Rural Development. The Annual Guarantee Fee is set to INCREASE October 1.
  • Debt Ratios–29/41% on manual underwrites  – max to 45% Debt to Income ratios with GUS Approve/Eligible Finding.
  • ZERO down payment – 100% LTV ok
  • Income Eligibility Limits do apply. Usually to $90k for a family of four and up to $119k for a household family of five or more.
  • Lender Credit from the interest rate may be used to pay closing costs.
  • Gifts ok! Usually not needed for USDA loans because 100% Financing offered. Gift funds cannot be used for reserves to get a GUS approval.
  • Applicants with > 20% of the sales price in assets (exclude retirement accounts) are not eligible for USDA financing.
  • Clear CAIVRS required – CAIVRS is a Federal Government-wide data base of information regarding individuals where an insurance claim or guarantee loss was paid.
  • Student Loan Payments
    Effective immediately for all RHS loans, student loan calculations will be changed to the following
    • Fixed Payment Loans: A permanent amortized, fixed payment may be used when it can be documented that the payment is fixed, the interest rate is fixed, and the repayment term is fixed.
    • Non-Fixed Payment Loans (i.e. deferred, income based, graduated, adjustable, etc.): The payment should be calculated as the greater of 0.5% of the loan balance or the actual payment reflected on the credit report. No additional documentation is required.

KY USDA Homes for Sale

Address Bed/Bath Price  
274 SHELBY HURST RD 3/2 $28,000.00
WILLIAMSBURG, KY 40769   Real Estate Owned
2217 Brent Ann Drive 0/0 $10,000.00
Flatwoods, KY 41139   Real Estate Owned
390 Boggs Rd 3/1 $41,000.00
Oliver Hill, KY 41164   Real Estate Owned
111 Sun Valley Drive 3/1 $26,000.00
Edmonton, KY 42129   Real Estate Owned
168 Cedarbrook Ct 3/1 $58,000.00
Cynthiana, KY 41031   Real Estate Owned
14699 Hwy 460 W 3/1 $63,000.00
Ezel, KY 41425   Real Estate Owned
712 Falls Lane 2/1 $43,000.00
Grayson, KY 41143   Real Estate Owned
30 WELLS CT 3/1 $35,000.00
MONTICELLO, KY 42633   Real Estate Owned
127 Lewis Lane 3/1 $27,000.00
Grayson, KY 41143   Real Estate Owned
111 Pelfrey Rd 4/2 $108,000.00
Morehead, KY 40351   Real Estate Owned
14773 Highway 460 3/1 $56,000.00
Ezel, KY 41425   Real Estate Owned
217 W Lynn Street 3/2 $98,000.00
Georgetown, KY 40324   Real Estate Owned
6300 Bull Fork Rd 3/2 $118,000.00
Morehead, KY 40351   Real Estate Owned
205 Evergreen Drive 3/1 $84,000.00
Irvine, KY 40336   Real Estate Owned
526 Bailey Rd 3/1 $35,000.00
Annville, KY 40402   Real Estate Owned
207 McArthur Street 3/1 $42,000.00
Russelville, KY 42276   Real Estate Owned
12 S Jackson Street 3/1 $40,000.00
Sturgis, KY 42549   Real Estate Owned
1785 Hwy 882 3/1 $50,900.00
Ezel, KY 41425   Real Estate Owned
7342 State Rt 5 3/1 $26,000.00
Ashland, KY 41102   Real Estate Owned
6125 Springbrook 3/2 $100,000.00
Paducah, KY 42001   Real Estate Owned
29 Sylvan Drive 3/1 $108,000.00
Independence, KY 41051   Real Estate Owned
229 Paul Nora 3/2 $85,000.00
Campbellsburg, KY 40011   Real Estate Owned
2 Smith 3/1 $36,180.00 – GovtBid
Monticello, KY 42633   Foreclosure Sale
108 Morgan Lane 3/2 $49,580.00 – GovtBid
Hopkinsville, KY 42240   Foreclosure Sale
2610 SR 564 3/2 $25,125.00 – GovtBid
Mayfield, KY 42066   Foreclosure Sale
167 Crestview Dr 3/1 $16,750.00 – GovtBid
Mayfield, KY 42066   Foreclosure Sale
6465 Cherry Lane 3/1 $41,540.00 – GovtBid
Utica, KY, KY 42376   Foreclosure Sale
3580 State Route 125 3/2 $26,800.00 – GovtBid
Hickman, KY 42050   Foreclosure Sale
1015 Walnut Creek Dr 3/2 $84,090.00 – GovtBid
Barstown, KY 40004   Foreclosure Sale
410 Hillside Drive 3/1 $23,450.00 – GovtBid
Mayfield, KY 42066   Foreclosure Sale
124 Brookview Dr 3/1 $36,850.00 – GovtBid
Nicholasville, KY 40356   Foreclosure Sale
120 Alder Drive 3/2 $89,185.00 – GovtBid
Bardstown, KY 40004   Foreclosure Sale
107 Cedar Street 3/1 $13,400.00 – GovtBid
Fulton, KY 42041   Foreclosure Sale
271 Mildred Rd. 3/2 $39,530.00 – GovtBid
McKee, KY 40447   Foreclosure Sale
70 Little Cabin Creek Rd. 3/2 $55,370.00 – GovtBid
Vanceburg, KY 41179   Foreclosure Sale
225 Forest Hill Road 3/1 $53,985.00 – GovtBid
Greenville, KY 42345   Foreclosure Sale
1215 Shepard Way 3/2 $68,900.00 – GovtBid
Shelbyville, KY 40065   Foreclosure Sale
103 Rose Lane 3/2 $45,560.00 – GovtBid
Nicholasville, KY 40356   Foreclosure Sale

Joel Lobb
Senior  Loan Officer

American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
 Fax:     (502) 327-9119
 Company ID #1364 | MB73346

New Credit Requirements for Kentucky USDA Rural Development Loans Starting 12/1/2014


One borrower must have 3 tradelines that have existed for 12 months. If this requirement cannot be met, an accept decision must be downgraded to a refer and treated as a manual underwrite.


Scores 680 and above OR GUS accept = No VOR required.

Scores 679 and below = VOR required.


Determine if the total outstanding balance of all collections accounts and charge offs of all applicants is equal to or greater than $2,000. Unless excluded by state law, collection accounts and charge offs of a non-purchasing spouse in a community property state are included in the cumulative balance of all collections and charge offs.

Remove all medical collections and medical charge off accounts from the total balance. Medical collections and medical charge off accounts must be clearly identifiable on the credit report.

If the remaining outstanding balance of collection accounts and charge offs are equal to or greater than $2,000, any of the following actions will apply:

Payment in full of all collection accounts and charge offs at or prior to closing.

Payment arrangements are made with each creditor for each collection account and charge offs remaining outstanding. A letter from the creditor or evidence on the credit report is required to validate the payment arrangements. The agreed upon monthly payment for each outstanding collection account and charge off will be included in the borrower’s debt-to-income ratio.

In the absence of a payment arrangement, the lender will utilize in the debt-to-income ratio a calculated monthly payment. For each collection and charge off utilize 5% of the outstanding balance to represent the monthly payment.


Joel Lobb
Senior  Loan Officer

American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
 Fax:     (502) 327-9119
 Company ID #1364 | MB73346

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