Kentucky First-Time Homebuyer Programs

Owning your first home in Kentucky is an exciting milestone, but choosing the right mortgage program can feel overwhelming. Thankfully, several government-backed mortgage options and assistance programs make homeownership more affordable and accessible. These programs often include:

  1. Automatic mortgage rate discounts with a rate buydown
  2. Low down payment options of zero, 3% and 5%
  3. Reduced mortgage insurance premiums for conventional loans
  4. Lower rates for lower income households under the Ami 80% household income limit for mortgagee

This guide highlights 7 popular mortgage programs for Kentucky first-time homebuyers. It helps you find the best loan choice to achieve your dream of homeownership in the Bluegrass State.

1. Conventional 97 Mortgage

Best for: Kentucky home buyers with above-average credit (720) and debt ratios less than 45%

The Conventional 97 mortgage is a low-down-payment loan backed by Fannie Mae, requiring just a 3% down payment. It’s a great option for first-time buyers purchasing single-family homes. Eligibility requirements include meeting credit score and debt-to-income ratio standards.

Kentucky Buyers are also needed to complete a HUD-approved homeownership education course before closing. With its low down payment and competitive rates, this loan is ideal for those with strong credit looking for flexibility.

2. HomeReady Loan

Best for: Low- to moderate-income buyers in Kentucky

HomeReady is another Fannie Mae-backed mortgage program tailored for buyers with low-to-moderate income. It allows for a 3% down payment.

To qualify, buyers must complete a homeownership education class, making it a practical choice for budget-conscious first-time homebuyers in Kentucky.

3. Home Possible Loan

Best for: Buyers with low-to-moderate income and good credit in Kentucky

Home Possible is a Freddie Mac-backed loan similar to the HomeReady program. It offers a 3% down payment option with competitive rates and reduced PMI for eligible Kentucky buyers.

This program is particularly suited for buyers who have a steady income and good credit. They may need assistance with upfront costs.

4. FHA Mortgage

Best for: Kentucky buyers with lower credit scores (680 or lower) with debt to income ratios over 45% to 50%

The FHA mortgage is insured by the Federal Housing Administration. It is one of the most popular options for first-time home-buyers in Kentucky. With a 3.5% down payment requirement and lenient credit score criteria, it’s accessible to a wide range of buyers.

FHA loans are ideal for those with non-traditional income or lower credit scores. However, they do require mortgage insurance premiums (MIP) for the life of the loan.

5. USDA Mortgage

Best for: Buyers in Kentucky’s rural and suburban areas

The USDA mortgage provides 100% financing, making it an excellent choice for eligible buyers in Kentucky’s rural and suburban communities. USDA loans have no down payment requirement. They offer reduced mortgage insurance premiums and lower interest rates. These features make homeownership more affordable for moderate- to low-income buyers.

6. VA Loan

Best for: Kentucky veterans, active-duty service members, and eligible surviving spouses

VA loans are backed by the Department of Veterans Affairs. They offer incredible benefits like no down payment and no mortgage insurance. These loans also feature lower interest rates compared to conventional loans.

If you have military experience and are purchasing your first home in Kentucky, VA loans are an affordable solution. They provide a cost-effective way to achieve homeownership.

7. Fannie Mae HomePath Ready Buyer Mortgage

Best for: Kentucky homebuyers seeking discounted foreclosed homes

The HomePath Ready Buyer program allows buyers to purchase foreclosed homes at a discount. This program offers a 3%-5% down payment option. It also provides potential closing cost assistance. It’s a great choice for budget-savvy first-time buyers in Kentucky.

Keep in mind that HomePath properties are sold as-is, so buyers should be prepared for possible repair expenses.

FAQs About Kentucky First-Time Homebuyer Programs

Who qualifies as a first-time homebuyer in Kentucky?

A first-time homebuyer in Kentucky is typically someone who hasn’t owned a home in the past three years. Special exceptions apply for displaced homemakers and single parents.

What is the easiest house loan to get in Kentucky?

FHA loans are generally the easiest to qualify for, thanks to their flexible credit score and down payment requirements.

How do I get pre-approved for a mortgage in Kentucky?

Getting pre-approved is easy. Contact a local lender, like Joel Lobb, or apply online to verify your income, employment, and credit history.

Can I buy a house in Kentucky with no down payment?

Yes! VA and USDA loans offer no-down-payment options, and down payment assistance programs in Kentucky can help further reduce upfront costs.

To get started, contact Joel Lobb, a trusted Kentucky mortgage broker specializing in first-time homebuyer programs.

1 –  Email – kentuckyloan@gmail.com 2.   Call/Text – 502-905-3708

Joel Lobb
Mortgage Loan Officer – Expert on Kentucky Mortgage Loans


 Website: www.mylouisvillekentuckymortgage.com
 Address: 911 Barret Ave., Louisville, KY 40204

Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.