Five Reasons Kentucky Buyers Choose FHA
1. Low 3.5% down payment
FHA requires only 3.5% down, and it can come from a documented family gift, retirement savings, personal savings, or an eligible down payment assistance program. On a $200,000 home, that is $7,000. Every dollar has to be sourced and seasoned, so undocumented cash deposits will create problems in underwriting.
2. Flexible credit score requirements
HUD's floor is 580 for 3.5% down and 500 for 10% down. Most Kentucky lenders look for 580 to 620 for the smoothest approval. Bankruptcies and foreclosures do not automatically disqualify you — specific waiting periods apply, and they are shorter than most people are told.
3. The seller can pay your closing costs
HUD allows sellers to contribute up to 6% of the purchase price toward your closing costs and prepaids. Combined with gifted down payment funds, this is how many Kentucky buyers get to the closing table with very little out of pocket.
4. Flexible income qualifying
The often-quoted "43% DTI" figure is the manual underwriting baseline, not a universal cap. When FHA's automated system returns an Accept, back-end ratios in the low-to-mid 50% range are commonly approved. On a manual underwrite, documented compensating factors can raise the caps to 37/47 or 40/50. Worked examples are further down this page.
5. Qualify without your spouse's bad credit
FHA allows you to be the sole borrower even if your spouse has damaged credit. Your spouse's credit is reviewed, an
