Kentucky Mortgage Guide for First-Time Buyers
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Everything Kentucky first-time homebuyers need to know about qualifying for a mortgage loan
Getting Started: The Basics
What credit score do I need to buy my first home in Kentucky?
For No Money Down Loans:
USDA Rural Housing: No minimum credit score requirement, but most lenders prefer 620+ (640+ for solid approval)
KHC Down Payment Assistance: 620-640 middle credit score
VA Loans: No minimum credit score requirement, but most lenders prefer 620+
For Low Down Payment Loans:
FHA Loans: 500 minimum with 10% down, 580 minimum with 3.5% down
Conventional Loans: 660+ for best rates and KHC assistance
Important Notes:
While FHA guidelines allow 500 credit scores with 10% down, and VA/USDA technically have no minimums, most lenders have overlays requiring higher scores
Credit scoring uses three bureaus (TransUnion, Equifax, Experian) – they throw out the high and low scores and use the middle score
If two borrowers on the loan, they take the lowest middle score of both borrowers
Good News: If your scores are in the high 500s or low 600s, we can often do a rapid rescore to improve them within 30 days.
How much income do I need to qualify for a mortgage in Kentucky?
Your qualifying ratios depend on two calculations:
Front-End Ratio: New house payment ÷ gross monthly income = 31% maximum Back-End Ratio: (House payment + monthly debts) ÷ gross monthly income = 43% maximum
Example Calculation:
Monthly income: $3,000
Monthly d
