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Credit Scores Required for FHA, VA, KHC and USDA Loans in Kentucky

Credit Score Requirements First TIme Home Buyer In Kentucky

Credit Scores Required for FHA, VA, KHC and USDA Loans in Kentucky

What is the current minimum credit scores needed to qualify for a Kentucky FHA, VA, KHC, USDA and Fannie Mae  mortgage Loan  in 2019? 
The minimum credit score needed to qualify for a Kentucky mortgage depends on the type of loan program you are looking to obtain, this could be the reason that you have received conflicting answers. The most common types of mortgage are Conventional, FHA, USDA, VA, nd KHC mortgage loans in Kentucky. I’ll explain each briefly below and the minimum credit score needed to qualify for each loan program. Keep in mind these are continuously changing and can vary by lender do to credit overlays. 
First Time Home Buyer Kentucky Home Loan Programs

Kentucky Conventional or Fannie Mae  

Conventional loans make up the majority of mortgages in the US. They are also known as conforming loans, because they conform to specific guidelines set by Fannie Mae and Freddie Mac.
  • Minimum Credit Score is 620
  • The maximum loan amount varies by Geographical Area , for 2019 it is between $484,500 and $679,650
  • You can use a conventional loan to buy a primary residence, second home, or rental property
  • Conventional loans are available in fixed rates, adjustable rates (ARMs), and offer many loan terms usually from 10 to 30 years
  • Down payments as low as 3% and 5% depending on Home Ready or straight conventional loan.
  • No monthly mortgage insurance with a down payment of at least 20%
  • Max Debt to Income Ratio of 50%


FHA Mortgage Guidelines for Kentucky Home buyers

An FHA loan is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment.
  • Minimum Credit Score is 500 with at least 10% down
  • Minimum Credit Score is 580 if you put less than 10% down
  • The maximum loan amount varies by Geographical Area, for 2019 it is between $314,720 and $679,650
  • Upfront and Monthly Mortgage Insurance is required regardless of the Loan to Value
  • FHA Loans are only available for financing primary residences
  • Maximum Debt to Income Ratio of 50% (unless mitigating factors justify allowing a higher DTI) up to 57% in some instances with strong compensating factors. 

Kentucky Rural Housing Lender Guidelines for Credit Score, Income

    • 100% Financing
    • Cities and towns located outside metro areas-see link (
    • Do NOT have to be a Kentucky First Time Home Buyer
    • No Down Payment
    • 30 year low fixed rate loans
    • No Prepayment Penalty
    • Great Low FIXED Interest Rates
    • No minimum loan amounts.
    • Possible to Roll Closing Costs into Loan if Appraises Higher
    • No Cash Reserves Required
    • UNLIMITED Seller Contribution toward Closing Costs
    • 100% Gifted Closing Costs allowed
    • Primary Residents only (no rentals/investment properties)
    • Debt to income ratios no more than 45% with GUS approval and 29 and 41% with a manual underwrite.
    • Only Need a 580 Credit Score to Apply*** Most USDA loans need a 620 or score higher to get approved through their automated underwriting system called GUS. 640 usually required for an automated approval upfront. 
    • No bankruptcies (Chapter 7) last 3 years and no foreclosure last 3 years. If Chapter 13 bankruptcy possible to go on after 1 year 

  • KENTUCKY VA Mortgage

  • 100% Financing Available up to $484,500
  • Must be eligible veteran with Certificate of Eligibility. We can help get this for veterans or active duty personnel. 
  • No Down Payment Required
  • Seller Can Pay ALL Your Closing Costs
  • No Monthly Mortgage Insurance
  • Minimum 580 Credit Score to Apply--VA does not have a minimum credit score but lenders will create credit overlays to protect their interest.
  • Active Duty, Reserves, National Guard, & Retired Veterans Can Apply
  • No bankruptcies or foreclosures in last 2 years and a clear CAVIRS 
  • Debt to income ratios vary, but usually 55% back-end ratio with a fico score over 620 will get it done on qualifying income and if it is a manual underwrite, 29% and 41% respectively
  • Can use your VA loan guaranty more than once, and in some cases, can have two existing va loans out at they sametime. Call or email for more info on this scenario. 
  • Cost of VA loan appraisal in Kentucky now costs a  minimum $475 with a termite report needed on all purchase and refinance transactions unless a condo. 
  • 2 year work history needed on VA loans unless you can show a legitimate excuse, ie. off work due to injury, schooling, education etc. 
  • You cannot use your GI Bill for income qualifying for the mortgage payment.


Kentucky Housing Down Payment Assistance Programs

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What documents do I need to apply for a home loan? After receiving your Loan Estimate, you will need to provide two of your most recent pay stubs, tax returns from the past two years, and bank, stock, and retirement account statements from the past two months. Additional personal information or documentation may be required. For more information see the Mortgage Documentation list. Can I apply for a loan before I find a property to purchase? Yes. It is recommended that you apply in advance as then you will be pre-qualified when you are searching for your home. Being prequalified will help you set a budget so you are searching for homes in the price range you can afford.  What is pre-qualification? This is the process of determining what loan amount a client qualifies for based on the information they provide. A pre-qualification is short of an approval because it does not take into a…