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Last updated: Jul 13, 2024
6.607% APR 30 Year Fixed
$1,560 / month
Rate: 6.375%
Fees: $1,629
Points: 1.792
Pts amt: $4,480
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  • Minimum 620 credit score needed to prequalify
  • 0% down USDA loan for rural homebuyers
  • 97% of borrowers would recommend to friends or family
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  • 2024 FHA Loan tools and resources
  • Find answers to your mortgage questions
  • Easy to qualify, no obligation
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Data provided by Icanbuy, LLC. Payments do not include amounts for taxes and insurance premiums. Click here for more information on rates and product details.

Kentucky Mortgage Overview

Known for the Kentucky Derby and all things horse racing, Kentucky is known as the 'Bluegrass State.' The scenery is gorgeous and there are homes for all price ranges, but Kentucky is a great place for first-time homebuyers because the median home price is $151,000 and the median mortgage payment is just $1,300.

If you're thinking about moving to Kentucky, here are your mortgage options:

Kentucky FHA loans

FHA loans offer flexible underwriting guidelines for first-time and subsequent homebuyers. Borrowers need just a 580 credit score and a 45 percent debt ratio. With just 3.5 percent down, you can buy a home, but you'll have mortgage insurance for the life of the loan, so include it in your budget.

Kentucky VA loans

Veterans of the military or even current military members have access to 100% financing if they have at least a 620 credit score. VA loans have the most flexible guidelines and VA lenders focus mostly on a borrower's disposable income to make sure you can cover the cost of daily living. VA loans don't require mortgage insurance but do have an upfront funding fee.

Kentucky USDA loans

Borrowers who love the wide open or living in areas of lower population may be eligible for a Kentucky USDA loan. Your household income must be less than 115% of the area's median income to be eligible and you must buy an owner-occupied home. USDA loans don't require a down payment but do have mortgage insurance for the life of the loan.

Kentucky conventional loans

Borrowers with great credit and low debt ratios get the best interest rates and terms with conventional loans. You need just 3 percent down, but with less than a 20 percent down payment, you'll pay Private Mortgage Insurance until you owe less than 80 percent of the home's value.

First-Time Homebuyer Programs in Kentucky

Down Payment Assistance

Receive down payment assistance up to $6,000 that's repayable over 10 years at 1 percent interest. To qualify, you must meet the income limits.

Borrowers with at least a 660 credit score may qualify for the Conventional Preferred program which requires a 3 percent down payment, allows down payment assistance and doesn't require borrower contribution.

Borrowers with a 620 credit score may qualify for the FHA program through the Kentucky Housing Corporation. You'll need a 3.5 percent down payment but can use down payment assistance for it.

Veterans with at least a 620 credit score can use the VA program with no down payment requirements. You can use the DAP funds for closing costs or to earn some equity in the home right away.

Tax credit

First-time homebuyers may be eligible for a tax credit equal to 25 percent of the interest paid for the year, up to $2,000 but only if you buy a home that's worth $294,600 or less.

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