Kentucky USDA Mortgage Credit Guidelines
If you're buying a home in a rural area of Kentucky, the USDA Rural Development Loan offers an exceptional path to homeownership with no down payment required. But qualifying means meeting strict credit standards. Here's what you need to know.
📊 Minimum Credit Score for USDA Loan in Kentucky
To qualify, borrowers must have a minimum credit score of 620. Unlike FHA loans, non-traditional credit (like rental or utility payment history) is not accepted.
Minimum FICO Score: 620
Non-traditional credit: Not allowed
📃 Trade Line Requirements
The USDA requires that at least one borrower have:
Two trade lines (e.g., credit card, auto loan, student loan)
At least 12 months of on-time payments
A record of credit responsibility
This credit history must be verifiable via a standard credit report.
❌ Ineligible Credit Circumstances
Applicants will be denied if any of the following apply:
Bankruptcy or foreclosure in the past 36 months
Open tax liens, judgments, or collection accounts
Insufficient credit history to generate a usable score
💼 Supporting Income Documentation
USDA loans also require income and employment verification:
Wage Earners: Paystubs, W-2s, and 2 years of IRS transcripts
Self-Employed: 2 years of tax returns, YTD P&L, and business verification
🏡 Property & Area Eligibility
The home must be located in a USDA-approved rural area. Use this tool to verify:
USDA Eligibility Site
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