Mortgage in Kentucky

No matter where you are in the world, you've likely heard of Kentucky, thanks to the eponymous Kentucky Fried Chicken fast-food chain. Kentucky is home to several famous events and landmarks, including the Kentucky Derby, Mammoth Cave, and Abraham Lincoln's birthplace. The state also has very affordable housing, with an average home value of around $150,000 . See what your mortgage might cost before you move with our Kentucky mortgage calculator.

Mortgage Options in Kentucky

Prospective Kentucky residents will likely choose from one of three common mortgage types.

• Kentucky conventional mortgage: Since Kentucky has low housing costs, you will likely qualify for a traditional conforming loan backed by Freddie Mac or Fannie Mae. These loans require just 3% down as a minimum, a minimum credit score of 620, and a debt-to-income ratio of 50% or less. However, if you put less than 20% down, you will need to pay private mortgage insurance.
• Kentucky FHA mortgage: The Federal Housing Administration backs loans that let buyers put as little as 3.5% down. You can receive approval with a credit score above 580. For those with credit scores between 500 and 579, a 10% down payment is necessary.
• Kentucky VA mortgage: Thanks to the VA, veterans have access to a VA loan that requires as little as 0% down and has no private mortgage insurance. The only catch is that you will usually need a minimum credit score of 660.

Whether you're moving to Kentucky or ready to stop renting within the state, one of the options above should get you a loan. If you need help with your down payment, the state offers programs for that, too!

First-Time Home Buyer Programs in Kentucky

Kentucky Housing Corporation offers four main programs to help prospective homeowners buy within the state's boundaries.

KHC Preferred

This loan product requires 3% down and mortgage insurance. You can pair this mortgage with one of the down payment assistance programs, so you do not need to put any of your own money down or keep any money in reserve.

Eligibility Criteria: Borrowers need a credit score of 660 and an income of at most 80% of the area median income. A homebuyer education course is also necessary.

KHC Preferred Plus 80

The Preferred Plus program is for those seeking a conventional mortgage whose income is between 80% and 100% of the area median income.

Eligibility Criteria: This program has the same criteria as the KHC Preferred program, with the sole exception that your income can be between 80% and 100% of the area median income.

Down Payment Assistance Program

Kentucky Housing Corporation offers two down payment assistance programs. "Affordable" DAP provides a 1% interest 10-year loan for up to $6,000. "Regular" DAP provides a loan of up to $6,000 with 5.5% interest over ten years.

Eligibility Criteria: Income limitations and home purchase price restrictions apply.

Mortgage Credit Certificate

Qualified borrowers can get a mortgage credit certificate that acts as a non-refundable tax credit on their return. The tax credit equals 25% of the annual mortgage interest, up to $2,000.

Eligibility Criteria: Purchase price and income limitations apply.

Kentucky Mortgage Calculator: With One of These Programs, You Can Own a Home!

With rolling green terrain and plenty of world-class landmarks and attractions, Kentucky is a fantastic place to call home. Between the various loan options and the assistance for first-time homebuyers, you should be able to buy a home in this state! Use our Kentucky mortgage calculator to get a clearer sense of how much you'll pay.