I am a Kentucky based USDA Mortgage Lender that has originated over 300 KY Rural Housing Mortgage Loans in Kentucky
Qualifications for a USDA Loan to Buy a Home in Kentucky
Purchasing a home in Kentucky can be made more accessible through the United States Department of Agriculture (USDA) Loan Program. This program is designed to help low-to-moderate-income individuals and families achieve the dream of homeownership in eligible rural areas. Here are the key qualifications for obtaining a USDA loan in Kentucky:
Income Limits
To qualify for a USDA loan, applicants must not have an annual adjusted income greater than **115%** of the median household income for the area¹.
Employment
Applicants are expected to provide proof of stable income and employment for at least two years¹.
Credit Requirements
While there is no minimum credit score required, applicants must meet USDA’s guaranteed underwriting credit requirements. A fair consideration of the credit background is essential⁴.
Property Location
The property must be situated in an eligible rural area as defined by the USDA¹.
Property Standards
The home must be safe, sanitary, and structurally sound to qualify for a USDA loan¹.
Occupancy
Borrowers must agree to occupy the property as their primary residence³.
Legal Capacity
Applicants must have the legal capacity to incur a loan obligation³.
Citizenship
Applicants must meet citizenship or eligible noncitizen requirements³.
Debt-to-Income Ratio
Your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must not exceed **29%** of your gross monthly income⁴.
Loan Limits
The USDA does not set specific maximum loan amounts for guaranteed mortgages. Instead, local limits are determined by a combination of the area USDA maximum income limit and the borrower’s debt-to-income ratios⁴.
The USDA loan program is a fantastic opportunity for those looking to buy a home in Kentucky’s rural areas. With no down payment required and flexible qualification criteria, it opens the door to homeownership for many who may not qualify for conventional loans.
For more detailed information or to apply for a USDA loan, it’s recommended to contact a local mortgage lender or visit the USDA Rural Development website.
This article provides a concise overview of the qualifications needed for a USDA loan in Kentucky. Prospective homebuyers should consult with a mortgage professional to understand the full application process and to determine their eligibility.
¹: [Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA](https://www.mylouisvillekentuckymortgage.com/p/a-kentucky-usda-home-loan-is-zero.html)
³: [Single Family Housing Direct Home Loans in Kentucky](https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-direct-home-loans/ky)
⁴: [Kentucky USDA Loan Limits – Loans101.com](https://www.loans101.com/usda-loans/usda-loan-limits/kentucky-usda-loan-limits-guaranteed-loans/)
(1) Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA …. https://www.mylouisvillekentuckymortgage.com/p/a-kentucky-usda-home-loan-is-zero.html.
Text/call: 502-905-3708
email: kentuckyloan@gmail.com
1-4 Persons: $74,150
5+ Persons: $97,900
1-4 Persons: $110,650
5+ Persons: $146,050
Kentucky USDA Direct Loans are intended for low- and very-low-income applicants. Direct loans are processed by the USDA and are tailored for people with incomes typically below 80% of the median income in their area.
Kentucky USDA Guaranteed Loans are more accessible to a broader range of incomes and are processed by local lenders. They are suited for moderate-income families and typically support incomes up to 115% of the median income in their area.
| Topic | KY USDA Direct Loan | KY USDA Guaranteed Loan | KY Conventional Mortgage |
|---|---|---|---|
| Income limits | Yes, low income | Yes, moderate income | None |
| Who holds the loan? | USDA | Private lender | Private lender |
| Interest rate | set below market rate – with subsidy-current rate is 4.625% | Market rate | Market rate |
| Mortgage insurance | None | 1% upfront, .35% annually | Yes, if less than 20% down |
| Down payment | $0 depending on assets | $0 | Minimum 3-5% |
| Loan term limits | as long as 38 years | 30 years | 30 years |
| Credit requirement | no minimum score – If lower, additional tradeline documentation is required | ≥ 580 to 620,preferred but no minimum score | ≥ 620 |
| Primary residence | Yes | Yes | No |
| New construction | Yes | Yes | Yes |
| Geographical restriction | Yes, rural only | Yes, rural only | No |
| Homebuyer education required? | Yes | No | Yes if you put down 3% |
| Home inspection required? | Yes and full report sent in | No | No |
| Avg. time to loan pre-approval / COE | Varies state to state | 2-5 days | 2-5 days |
| Subsidy recapture | Sometimes | No | No |
| Income generating property | No | No | Yes, rental and second home okay |
American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364
Text/call: 502-905-3708
fax: 502-327-9119
email: kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).
Kentucky USDA Mortgage Lender for Rural Housing Loans 