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Kentucky First-Time Home Buyer Mortgage Approval Requirements

Kentucky First-Time Home Buyer Approval Requirements for a Mortgage Loan (2025 Guide)

Buying your first home in Kentucky can feel overwhelming, but knowing the requirements upfront makes the process smoother. Lenders look closely at your credit score, down payment, and debt-to-income (DTI) ratio before issuing a pre-approval. Here’s what you need to know in 2025.

Core Approval Requirements

Credit Score

  • Conventional loans: Minimum 620 (better rates at 700+)
  • FHA loans: 580 with 3.5% down; 500 with 10% down
  • VA loans: No set minimum, but most lenders prefer 620+
  • USDA loans: Typically 640, though some approvals possible with 580–639 via manual underwriting

Down Payment

  • Conventional: 3%–20% (20% avoids PMI)
  • FHA: 3.5% minimum, or 10% if under 580 credit
  • VA & USDA: Zero down payment required
  • KHC DAP: Up to $12,500 (through Nov. 30, 2025) for down payment and closing costs

Debt-to-Income (DTI) Ratios

  • Front-end ratio: Housing costs only — aim for under 31%–36%
  • Back-end ratio: Housing + debts — typically capped at 41%–50% depending on program

Kentucky First-Time Homebuyer Loan Options

  • Conventional Loan: Best for strong credit; competitive rates and terms
  • FHA Loan: Great for lower scores or limited savings; includes mortgage insurance
  • USDA Rural Housing Loan: Zero down for rural areas; income/location limits apply
  • VA Loan: Zero down, no MI, and favorable terms for veterans/service members
  • Kentucky Housing Corporation (KHC) Programs: Down payment and closing cost assistance, including MRB and DAP

Key Takeaways

  • Aim for 580+ credit for FHA or 620+ for Conventional/USDA/VA
  • Budget realistically for a down payment, but explore KHC assistance
  • Keep debts under control to meet DTI limits
  • Choose the right program based on credit, income, and location

Next Steps

The fastest way to know what you qualify for is to get pre-approved. A pre-approval gives you a budget and strengthens your offer when shopping for a home in Kentucky.

Contact Joel Lobb – EVO Mortgage

Senior Loan Officer | NMLS #57916
EVO Mortgage | Company NMLS #1738461
Louisville, KY – Serving all of Kentucky
📱 Call/Text: (502) 905-3708
✉️ Email: kentuckyloan@gmail.com
🌐 Website: www.mylouisvillekentuckymortgage.com

Equal Housing Lender | Not a commitment to lend | Programs subject to change | Not affiliated with HUD, VA, USDA, or KHC.
For licensing information, visit www.nmlsconsumeraccess.org.
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Kentucky HUD Homes for Sale with the FHA $100 Down Program

 Kentucky HUD Homes for Sale with the FHA $100 Down Program 


 The appraiser identifies the repairs that are required to satisfy Kentucky  FHA’s minimum property requirements 
(MPR) under FHA’s “Insurable with Repair Escrow” approach. To be eligible the repairs cannot exceed 
$5,000. 

Uninsurable properties are properties that require >$5,000 in repairs to satisfy FHA’s MPR. Properties 
requiring > $5,000 in repairs are only available using FHA 203K financing which we do not 

offer. 


KENTUCKY HUD HOMES SALES INCENTIVES

 



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HUD $100 Down Homes in Kentucky

For a limited time, FHA offers sales incentives on HUD homes that will make these homes more affordable for home buyers when purchasing a property using FHA-insured financing. The incentives VARY from State to State but may include: low down payments; sales allowances that can be used to pay closing costs, make repairs, or pay down the mortgage amount; broker bonuses for owner-occupant sales. The benefits of FHA financing are low down payments; competitive interest rates; flexible credit qualifying. To find a HUD-Approved Lender, and for the latest sales incentives in your areas, visit HUDhomestore.com. The program incentives are subject to change without prior notice.
Sales Incentives
(subject to change without prior notice)
Participating States
$100 Down Payment! Available to Owner Occupant Homebuyers when purchasing a property using FHA-insured financing.

Illinois, Indiana, Kentucky, Tennessee, S. Carolina,N. Carolina, Georgia, Mississippi, Alabama, Florida, Puerto Rico, Virgin Islands

Good Neighborhood Next Door (GNND)
For Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence. When a law enforcement officer, teacher, firefighter, or emergency medical technician chooses to use an FHA- insured mortgage, the down payment is $100. Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. GNND buyers can bid in lottery, exclusive, and extended phases, but can bid exclusively on insured single unit homes in revitalization areas in the lottery phase. GNND buyers are given preference over government agencies and nonprofits in the selection of a bid-winner in the lottery phase. Search for available properties at www.hudhomestore.com, enter State and Buyer Type: Good Neighbor Next Door. View Q & As
$1 Homes
Sales For Local Governments
HUD’s Dollar Homes initiative helps local governments to foster housing opportunities for low to moderate income families and address specific community needs by offering them the opportunity to purchase qualified HUD-owned homes for $1 each. Please read HUD’s most recent notice on H2011-16 for more information. Search for available properties at HUDhomestore.com, enter State and Buyer Type is Government Agency.
Nonprofit Organizations
Eligible nonprofit organizations, can bid on homes in lottery, exclusive, and extended phases provided they are in approved purchase areas. If the property is in the lottery phase, the home must be uninsured. Nonprofits rank below Government Agencies in the bid selection process for the lottery, but above them for exclusive and extended listings. Nonprofits cannot bid for dollar homes. Nonprofit organizations that want to obtain HUD approval to participate as a FHA mortgagor, purchase HUD homes at a discount, or administer a Secondary Financing/ Down payment Assistance Program must submit an email directly to their local Homeownership Center (HOC), Program Support Division, indicating that your organization would like to apply for approval to participate in FHA Nonprofit activities. Search for available properties at www.hudhomestore.com, enter State and Buyer Type: Nonprofit.
FHA’s “First Look” Sales Program Neighborhood Stabilization Program
For Governmental Entities, Nonprofit Organizations, and Sub-recipients that have received a HUD-issued Name and Address Identification Number (NAID) are eligible to participate in the First Look Sales Method. The National First Look Program is a first-ever public-private partnership agreement between HUD and the National Community Stabilization Trust (Stabilization Trust). In collaboration with national servicers, Fannie Mae, and Freddie Mac, the First Look program is intended to give communities participating in HUD’s Neighborhood Stabilization Program (NSP)a brief exclusive opportunity to purchase bank-owned properties in certain neighborhoods so these homes can either be rehabilitated, rented, resold or demolished.Information will be available here soon.
Please use the following link https://hudnsphelp.info/index.cfm?do=viewFHAfirstLook for information about this program.


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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.


Kentucky Local Home Loan Lender Services

✅ First-Time Home Buyers Welcome
✅ FHA, Rural Housing (USDA), VA, and Kentucky Housing Corporation (KHC) Loans
✅ Conventional Loan Options Available
✅ Fast Local Decision-Making
✅ Experienced Guidance Through the Home Buying Process



Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/


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