As a first-time homebuyer in Kentucky, there are several mortgage programs to consider. Each program has its own set of requirements, benefits, and considerations. Here are some of the primary options:

1. Kentucky FHA Loans

• Kentucky Credit Score Requirements: Typically, a minimum credit score of 580 for a 3.5% down payment. Scores between 500-579 may qualify with a 10% down payment.
• Down Payment: As low as 3.5%. 10% down payment needed for 580 and below score
• Mortgage Insurance: Requires both upfront and annual mortgage insurance premiums (MIP).
• Advantages: Lower credit score requirements, flexible qualification guidelines.
• Disadvantages: Requires mortgage insurance premiums, even if you put down 20%. Upfront and monthly mortgage insurance.

2. Kentucky VA Loans

• Kentucky Credit Score Requirements: No official minimum, but Kentucky VA lenders typically look for a score of 580 or higher.
• Down Payment: No down payment required.
• Mortgage Insurance: No mortgage insurance, but there is a funding fee (can be financed into the loan). IF disabled vet, can be waived.
• Eligibility: Must be an eligible veteran, active-duty service member, or eligible family member.
• Advantages: No down payment, no mortgage insurance, competitive interest rates.
• Disadvantages: Must meet eligibility requirements and be a veteran or active duty to qualify, funding fee applies.

3. Kentucky USDA Loans

• Credit Score Requirements: No minimum score, but Typically a minimum credit score of 640 for USDA loan approval through GUS.
• Down Payment: No down payment required.
• Income Limits: Must meet income limits for your area.
• Property Location: Must be in an eligible rural area.
• Advantages: No down payment, lower mortgage insurance costs.
• Disadvantages: Geographic and income restrictions, mortgage insurance required. tighter debt to income ratio requirements

4. Kentucky Housing Corporation (KHC) Loans

• Programs: KHC offers various loan programs, including down payment assistance.
• Credit Score Requirements: Varies by program, but generally around 620.
• Down Payment Assistance: $10,000 loan, repayable over 10 years at 3.75% interest.
• Income Limits: Must meet income limits for your area and family size.
• Advantages: Down payment assistance, competitive interest rates.
• Disadvantages: Income and purchase price limits, repayment of assistance funds.

5. Conventional Loans

• Credit Score Requirements: Typically a minimum of 620.
• Down Payment: As low as 3% for first-time homebuyers (Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs).
• Mortgage Insurance: Required if down payment is less than 20%.
• Advantages: Potentially lower mortgage insurance costs compared to FHA, flexibility in property types. No income limits.
• Disadvantages: Stricter credit and income requirements, higher down payments without special programs.

6. Fannie Mae HomeReady and Freddie Mac Home Possible

• Credit Score Requirements: Typically a minimum of 620.
• Down Payment: As low as 3%.
• Income Limits: Must meet income limits for your area.
• Advantages: Lower down payment, reduced mortgage insurance costs.
• Disadvantages: Income limits, may have higher interest rates than other government-backed loans.

Summary of Requirements

• Kentucky FHA Loans: 580+ credit score, 3.5% down payment. 10% down for 580 score and below
• Kentucky VA Loans: 620+ credit score, no down payment, veteran status.
• Kentucky USDA Loans: 640+ credit score, no down payment, rural property.
• Kentucky KHC Loans: 620+ credit score, down payment assistance, income limits.
• Kentucky Conventional Loans: 620+ credit score, 3%-20% down payment.

Choosing the right mortgage program depends on your financial situation, eligibility, and homebuying goals. Consulting with a mortgage broker like Joel Lobb, who specializes in Kentucky first-time homebuyer programs, can help you navigate these options and find the best fit for your needs.

Joel Lobb  Mortgage Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574