Kentucky FHA Loans –  Requirements and Loan Limits for 2024 – Kentucky FHA Lenders

kentucky fha lenders

Kentucky home buyers who need a small down payment or have poor credit scores may be able to purchase a home with an Kentucky FHA loan. There are many FHA lenders in Kentucky who offer FHA loans, but not all of them participate in all of the FHA loan options available.

For over two decades we have been experts in the state of Kentucky helping homebuyers with government backed FHA loans.  We will take you through the Kentucky FHA loan requirements, detail what is needed to qualify, then help you to get pre-qualified.

If you already know that an FHA loan is right for you, then click to connect with an Kentucky FHA lender whether you live in Louisville, Lexington, Bowling Green, or anywhere else.

FHA Home Loan Benefits in Kentucky

When deciding which loan program is best for your purchase and refinance, you have to consider all loan program options. These are the benefits of an FHA loan versus a conventional loan:

  • Lower credit scores permitted
  • Lower down payment requirement
  • FHA interest rates are lower than conventional rates
  • Gift funds allowed
  • Seller closing cost contributions are allowed
  • FHA loans are assumable
  • Co-signers allowed
  • Higher debt to income ratios permitted
  • Recent bankruptcies permitted

These are just some of the most common benefits of an FHA loan. You may have a specific situation where an FHA loan would be a perfect choice for you. Contact us to discuss your scenario.

Types of FHA Home Loans – First Time Home Buyers

There are various types of FHA loans available in the state of Vermont for both purchases and also refinances. Each of these are for a specific situation that a home buyer or current homeowner may encounter. Although these mortgage programs are available, not every lender offers them and the ones who do may have their own unique requirements.

  • Standard Purchase
  • Standard Refinance
  • FHA 203k Rehab (when buying or refinancing)
  • FHA Streamline Refinance
  • FHA One Time Close Construction Loan
  • FHA Cash Out Refinance
  • FHA Energy Efficient Mortgage

We will review some of these programs below and will provide additional information.

FHA Eligibility Requirements for Kentucky in 2024

These are the basic FHA loan requirements for this year. All of these must be met to be approved for an FHA loan. If you are not positive on whether you meet these standards or have questions, an FHA lender can help.

  • Down payment of 3.5% or 10% if your credit score is below 580
  • 2-year employment history with some exceptions allowed
  • Fully document your income for the past two years
  • Minimum FICO score requirement of 500 – down payment will vary
  • Mortgage Insurance Premium (MIP) is required for every FHA loan
  • Maximum debt to income ratio of 43% with exceptions up to 56%
  • The home must be your primary residence
  • No bankruptcies or foreclosures in the past two years

When you complete your mortgage application, your lender will verify the requirements referenced above. Be prepared to fully document your income and assets.

Down Payment Requirements for FHA Loans

The down payment requirements for an FHA loan is the same in every state. The minimum requirement for an FHA loan is 3.5% of the purchase price. However, if your credit score is below 580, then the down payment requirement will be 10%.

If you do not have the down payment needed, you can also use gift funds from a relative.

Kentucky Down Payment Assistance

There are various down payment assistance programs in every state. Below is a list of just a few down payment assistance programs that may be available to you in Kentucky. Home buyers will need to contact, and arrange for these programs independently. Lenders will accept the funds from these programs for your down payment but they will not arrange for the down payment assistance.

Louisville Down Payment Assistance Program

Christian County Down Payment Assistance (Expired)

Covington Home Buyer Assistance

Louisville Down Payment Assistance

Lexington Housing Programs

You may also get approved for lender provided down payment assistance. To qualify, you should focus on getting your credit scores up to 640. With a lender provided down payment assistance, it may be a second loan versus a grant which means it would need to be paid back over time. However, some lenders forgive the down payment assistance if you maintain the loan for a minimum number of years. We can help you with this option.

Local Kentucky Lenders for FHA Loans

These local Kentucky lenders are just a few options for you to consider. Please note that each lender is different and it is possible that none of these options are best for you depending upon your scenario. These lenders may or may not have the best terms, accept lower credit scores, or offer all of the available FHA loan programs.

  1. First National Bank of KentuckyContact
  2. First State BankContact
  3. Citizens Bank Contact
  4. Farmer State BankContact
  5. Paducah BankContact
  6. Stock Yards Bank and TrustContact

Let us help you to find the best FHA lender in your area by completing this FHA loan scenario form with some basic loan scenario information. No credit report will be pulled and we can connect you with the best option.

FHA Application Process and Documentation Requirements

If you are looking for an FHA loan pre-approval, there is an optimal application process you should follow to get pre-approved.

  1. The first step is to make sure you have the minimum down payment needed to qualify
  2. Check your credit and try to cleanup anything that is pulling down your scores
  3. Get a copy of your tax returns for the past two years
  4. Get copies of your pay stubs for the past month
  5. Get copies of your last two months’ bank statements
  6. Speak to an FHA lender about your loan scenario

Speak to a lender early in the process because they can identify opportunities to help with your FHA approval. This should be done months before you start looking for a home. Read more about how to get pre-approved for an FHA loan.

FHA Kentucky Loan Limits by County

Every county in the United States has specific maximum loan limits that are set for single family homes, as well as 2-4 unit properties. The limits are set based upon the average home sales value in that county. The base FHA loan limit for single family residences in Kentucky for most counties is $498,257. Use this FHA loan limit lookup tool to see what the FHA loan limits are in your county.

County Name Single Family 2 Units 3 Units 4 Units
ADAIR $498,257 $637,950 $771,125 $958,350
ALLEN $498,257 $637,950 $771,125 $958,350
ANDERSON $498,257 $637,950 $771,125 $958,350
BALLARD $498,257 $637,950 $771,125 $958,350
BARREN $498,257 $637,950 $771,125 $958,350
BATH $498,257 $637,950 $771,125 $958,350
BELL $498,257 $637,950 $771,125 $958,350
BOONE $498,257 $637,950 $771,125 $958,350
BOURBON $498,257 $637,950 $771,125 $958,350
BOYD $498,257 $637,950 $771,125 $958,350
BOYLE $498,257 $637,950 $771,125 $958,350
BRACKEN $498,257 $637,950 $771,125 $958,350
BREATHITT $498,257 $637,950 $771,125 $958,350
BRECKINRIDGE $498,257 $637,950 $771,125 $958,350
BULLITT $498,257 $637,950 $771,125 $958,350
BUTLER $498,257 $637,950 $771,125 $958,350
CALDWELL $498,257 $637,950 $771,125 $958,350
CALLOWAY $498,257 $637,950 $771,125 $958,350
CAMPBELL $498,257 $637,950 $771,125 $958,350
CARLISLE $498,257 $637,950 $771,125 $958,350
CARROLL $498,257 $637,950 $771,125 $958,350
CARTER $498,257 $637,950 $771,125 $958,350
CASEY $498,257 $637,950 $771,125 $958,350
CHRISTIAN $498,257 $637,950 $771,125 $958,350
CLARK $498,257 $637,950 $771,125 $958,350
CLAY $498,257 $637,950 $771,125 $958,350
CLINTON $498,257 $637,950 $771,125 $958,350
CRITTENDEN $498,257 $637,950 $771,125 $958,350
CUMBERLAND $498,257 $637,950 $771,125 $958,350
DAVIESS $498,257 $637,950 $771,125 $958,350
EDMONSON $498,257 $637,950 $771,125 $958,350
ELLIOTT $498,257 $637,950 $771,125 $958,350
ESTILL $498,257 $637,950 $771,125 $958,350
FAYETTE $498,257 $637,950 $771,125 $958,350
FLEMING $498,257 $637,950 $771,125 $958,350
FLOYD $498,257 $637,950 $771,125 $958,350
FRANKLIN $498,257 $637,950 $771,125 $958,350
FULTON $498,257 $637,950 $771,125 $958,350
GALLATIN $498,257 $637,950 $771,125 $958,350
GARRARD $498,257 $637,950 $771,125 $958,350
GRANT $498,257 $637,950 $771,125 $958,350
GRAVES $498,257 $637,950 $771,125 $958,350
GRAYSON $498,257 $637,950 $771,125 $958,350
GREEN $498,257 $637,950 $771,125 $958,350
GREENUP $498,257 $637,950 $771,125 $958,350
HANCOCK $498,257 $637,950 $771,125 $958,350
HARDIN $498,257 $637,950 $771,125 $958,350
HARLAN $498,257 $637,950 $771,125 $958,350
HARRISON $498,257 $637,950 $771,125 $958,350
HART $498,257 $637,950 $771,125 $958,350
HENDERSON $498,257 $637,950 $771,125 $958,350
HENRY $498,257 $637,950 $771,125 $958,350
HICKMAN $498,257 $637,950 $771,125 $958,350
HOPKINS $498,257 $637,950 $771,125 $958,350
JACKSON $498,257 $637,950 $771,125 $958,350
JEFFERSON $498,257 $637,950 $771,125 $958,350
JESSAMINE $498,257 $637,950 $771,125 $958,350
JOHNSON $498,257 $637,950 $771,125 $958,350
KENTON $498,257 $637,950 $771,125 $958,350
KNOTT $498,257 $637,950 $771,125 $958,350
KNOX $498,257 $637,950 $771,125 $958,350
LARUE $498,257 $637,950 $771,125 $958,350
LAUREL $498,257 $637,950 $771,125 $958,350
LAWRENCE $498,257 $637,950 $771,125 $958,350
LEE $498,257 $637,950 $771,125 $958,350
LESLIE $498,257 $637,950 $771,125 $958,350
LETCHER $498,257 $637,950 $771,125 $958,350
LEWIS $498,257 $637,950 $771,125 $958,350
LINCOLN $498,257 $637,950 $771,125 $958,350
LIVINGSTON $498,257 $637,950 $771,125 $958,350
LOGAN $498,257 $637,950 $771,125 $958,350
LYON $498,257 $637,950 $771,125 $958,350
MADISON $498,257 $637,950 $771,125 $958,350
MAGOFFIN $498,257 $637,950 $771,125 $958,350
MARION $498,257 $637,950 $771,125 $958,350
MARSHALL $498,257 $637,950 $771,125 $958,350
MARTIN $498,257 $637,950 $771,125 $958,350
MASON $498,257 $637,950 $771,125 $958,350
MCCRACKEN $498,257 $637,950 $771,125 $958,350
MCCREARY $498,257 $637,950 $771,125 $958,350
MCLEAN $498,257 $637,950 $771,125 $958,350
MEADE $498,257 $637,950 $771,125 $958,350
MENIFEE $498,257 $637,950 $771,125 $958,350
MERCER $498,257 $637,950 $771,125 $958,350
METCALFE $498,257 $637,950 $771,125 $958,350
MONROE $498,257 $637,950 $771,125 $958,350
MONTGOMERY $498,257 $637,950 $771,125 $958,350
MORGAN $498,257 $637,950 $771,125 $958,350
MUHLENBERG $498,257 $637,950 $771,125 $958,350
NELSON $498,257 $637,950 $771,125 $958,350
NICHOLAS $498,257 $637,950 $771,125 $958,350
OHIO $498,257 $637,950 $771,125 $958,350
OLDHAM $498,257 $637,950 $771,125 $958,350
OWEN $498,257 $637,950 $771,125 $958,350
OWSLEY $498,257 $637,950 $771,125 $958,350
PENDLETON $498,257 $637,950 $771,125 $958,350
PERRY $498,257 $637,950 $771,125 $958,350
PIKE $498,257 $637,950 $771,125 $958,350
POWELL $498,257 $637,950 $771,125 $958,350
PULASKI $498,257 $637,950 $771,125 $958,350
ROBERTSON $498,257 $637,950 $771,125 $958,350
ROCKCASTLE $498,257 $637,950 $771,125 $958,350
ROWAN $498,257 $637,950 $771,125 $958,350
RUSSELL $498,257 $637,950 $771,125 $958,350
SCOTT $498,257 $637,950 $771,125 $958,350
SHELBY $498,257 $637,950 $771,125 $958,350
SIMPSON $498,257 $637,950 $771,125 $958,350
SPENCER $498,257 $637,950 $771,125 $958,350
TAYLOR $498,257 $637,950 $771,125 $958,350
TODD $498,257 $637,950 $771,125 $958,350
TRIGG $498,257 $637,950 $771,125 $958,350
TRIMBLE $498,257 $637,950 $771,125 $958,350
UNION $498,257 $637,950 $771,125 $958,350
WARREN $498,257 $637,950 $771,125 $958,350
WASHINGTON $498,257 $637,950 $771,125 $958,350
WAYNE $498,257 $637,950 $771,125 $958,350
WEBSTER $498,257 $637,950 $771,125 $958,350
WHITLEY $498,257 $637,950 $771,125 $958,350
WOLFE $498,257 $637,950 $771,125 $958,350
WOODFORD $498,257 $637,950 $771,125 $958,350


FHA 203k Loans in Kentucky

FHA 203k loans are a great program which will allow you to borrow the money needed to purchase the home plus additional funds needed to rehabilitate or remodel the home. This program is also available in your state and we work with lenders that help with your FHA 203k loan.

If you would like to fully understand how this program works, we suggest reading our article on FHA 203k loans.

FHA Streamline Refinance Eligibility Requirements

The FHA streamline refinance program is available to existing homeowners who would like to refinance for a lower rate while eliminating some of the refinance costs such as an appraisal. You may also get a discount on the mortgage insurance premium which is another advantage.

If you are interested in refinancing, then this program is something you should consider. For more information, please read our article on the FHA streamline refinance.

Kentucky Cash Out Refinance

With an FHA loan, you can cash out up to 80% of the appraised value of the home. The cash out version of the FHA loan requires borrowers to fully document their income and have the home appraised.

The qualification process is similar to that of a purchase. If you would like to discuss this option or learn more, read out article on the FHA cash out refinance.

What to Look for in a local FHA Lender in Kentucky

We take a few things into consideration when looking at which Kentucky FHA lenders we work with. Some of these also may be, or should be very important to you as you continue shopping for an FHA loan.

A good FHA lender will:

  • Allow for credit scores as low as 500
  • Provide FHA 203k loans
  • Offer competitive rates and fees
  • Have a great processing and underwriting team
  • Work closely with you throughout the loan process
  • Communicate well and will provide you with updates along the way

Poor Credit Options with FHA Home Loans

Many homebuyers struggle to get approved from a local lender because they do not meet that lender’s minimum credit score requirements or standards. One of the benefits of an FHA loan is the ability to qualify with credit scores as low as 500. However, HUD requires the down payment to increase up to 10% or more when credit scores are below 580.

We have helped thousands of Kentucky borrowers with low credit to get approved for FHA government home financing. If you are having difficulty with your credit scores and would like to purchase or refinance a home, you may be able to get approved today.

Kentucky Loan Calculator

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Frequently Asked FHA Questions

How much are the FHA closing costs?
You should expect the closing costs to be anywhere from 2%-5% depending upon the amount of the home purchase. You should budget for closing costs but you can get a seller concession to help cover those costs.

What are the FHA interest rates?
The interest rate for an FHA loan is extremely competitive and is actually slightly lower than conventional interest rates at the moment.

How much is FHA mortgage insurance?
FHA loans have an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount. Then, you will also have a monthly mortgage insurance component that is included as part of your mortgage payment.

Can I get an FHA loan with a bankruptcy?
In general, you will need to wait two years before applying for an FHA loan after a bankruptcy. However, there are some exceptions which may allow you to apply sooner. You can get an exception if you have a chapter 7 bankruptcy. For Chapter 13 bankruptcies you can get an FHA loan before you are discharged. Read our article on the bankruptcy waiting period.

Are all FHA lenders the same?
Not all lenders who offer FHA loans are the same. They all do not offer all of the FHA programs and their rates and fees may also vary. Most importantly, the individuals who help to process and underwrite your loan will have a huge impact on your FHA loan experience.

Can I use gift funds for an FHA loan?
FHA loans do allow for gift funds to cover your down payment as well as your closing costs. The gift funds must come from a relative or a close friend as approved by the lender. You will need to provide the lender with a gift letter that is signed by the donor.

Do I need an appraisal for an FHA loan?
The FHA does require an appraisal and inspection before your loan can be approved. The FHA inspection has clear guidelines on what needs to be repaired before your loan can close. They want to make sure home buyers are moving into a home that is safe and operational.

Can I get an FHA loan for an investment property?
FHA loans are for primary residences only and if your goal is to purchase an investment property, you cannot use FHA insured financing for that purchase. However, if you are currently living in a home that is financed with an FHA loan, you can move to a new home and keep the current home as an investment.

What is the minimum credit score requirement for FHA in Kentucky?
The minimum credit score requirement in Kentucky is 500 for every borrower on the mortgage application.

Are there any income limits or restrictions for FHA in the state of Kentucky?
There are no income limits when applying for an FHA loan. Millionaires can apply for an FHA loan if they can meet all of the qualifications and requirements set by HUD.

Are there any specific FHA property requirements for a home eligible for a Kentucky home purchase?
The FHA guidelines require the property to be a 1-4 unit dwelling and to be occupied by the borrowers as their primary residence.

FHA Facts and Statistics for Kentucky

1. FHA loans are insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development.
2. FHA provides borrowers with more lenient eligibility requirements compared to conventional loans.
3. These loans allow borrowers to make a smaller down payment, typically as low as 3.5% of the purchase price.
4. Borrowers can have a lower credit score and still qualify for financing.
5. FHA loans also have more flexible debt-to-income ratio requirements, allowing borrowers with higher levels of debt to still be eligible.
6. FHA mortgage loans offer competitive interest rates and terms for homebuyers.
7. Borrowers using FHA loans must pay mortgage insurance premiums (MIP), which protect the lender in case of default.
8. The maximum loan amount for varies by each county in Kentucky and is determined by FHA loan limits set annually.
9. To apply for an FHA loan, borrowers need to meet certain criteria including income verification, credit history, and employment stability.
10. Over 75% of homebuyers in Kentucky choose to finance their homes through FHA loans.
11. The average down payment for an FHA loan is 3.8% of the purchase price.
12. FHA loans have helped over 15,000 Kentucky families achieve homeownership in the past year.
13. In the last decade, the number of Kentucky residents using FHA loans to purchase homes has increased by an impressive 68%.
14. Approximately 42% of first-time homebuyers in Kentucky rely on FHA loans to finance their homes.
15. In Kentucky, FHA loans have a default rate that is 12% lower than the national average for all loan types.
16. On average, it takes just 24 days for an FHA loan application to be approved.
17. The median credit score for borrowers approved for FHA financing in Kentucky is 680.
18. Over $500 million worth of homes were purchased using FHA approved mortgages in Kentucky last year alone.

Kentucky Home Buying Data

If you are thinking about buying a home in Kentucky, this home buying data may be helpful in deciding whether to make Kentucky your home.

  • Kentucky population = $5.7 million
  • Number of homes = 2,023,000
  • Average home value = $185,000
  • Average mortgage payment = $1,641
  • Average annual property taxes = $1,385
  • Average monthly rent = $1,126
  • Average time to commute to work = 23 minutes

Kentucky is an affordable state to purchase a home. The combination of lower home prices and low property taxes makes Kentucky a great place for first time home buyers to consider.

We have FHA lenders who can help with your FHA loan in all 50 states. 

kentucky fha loans