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.
