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 a few famous events and landmarks, including the Kentucky Derby, Mammoth Cave, and Abraham Lincoln's birthplace. This state also has very affordable housing, with an average home value of around $150,000 . See what your mortgage cost might be before you move, thanks to our Kentucky mortgage calculator.
Kentucky Mortgage Calculator: More Home for Less Money
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. These loans receive backing from Freddie Mac or Fannie Mae. Requiring just 3% down as a minimum, borrowers will also need 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 offers loans that provide buyers with the ability to put as little as 3.5% down. You can receive approval with a credit score above 580. For those with credit scores ranging 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 looking at moving to Kentucky or stopping renting within the state, you should be able to get a loan using one of the options above. If you need assistance with your down payment, the state offers programs to help with that!
First-Time Homebuyers in Kentucky
Kentucky Housing Corporation offers four main programs to assist prospective homeowners in buying within the state's boundaries.
This loan product requires 3% down and mortgage insurance. You can pair this mortgage with one of the down payment assistance programs. You do not need to put any money down, nor do you need to keep any money in reserve.
Eligibility Criteria: Must have a credit score of 660 to apply and an income that is 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 looking for 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 is equal to 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. Thankfully, between the various loan options available and the assistance for first-time homebuyers, you should be able to get a home within this state! Of course, use our Kentucky mortgage calculator to get a more definitive sense of how much you'll pay!