KENTUCKY USDA RURAL HOUSING LOAN PROGRAM GUIDELINES

Kentucky USDA Rural Housing Loan Program 2026

No down payment mortgage options for eligible rural Kentucky homebuyers

What Is a Kentucky USDA Loan?

The USDA Rural Housing Loan program allows eligible buyers to purchase a primary residence in approved rural areas of Kentucky with no down payment. These loans are backed by the United States Department of Agriculture and are designed for low-to-moderate income households.

  • 100 percent financing available
  • 30-year fixed interest rates
  • Lower monthly mortgage insurance than FHA
  • No first-time buyer requirement
  • Primary residence only

Step 1: Property Must Be USDA Eligible

USDA eligibility is based on the exact property address. Entire counties are not automatically approved or denied. Even within eligible counties, some city zones are excluded.

Large metro areas that are generally not USDA eligible include Louisville (Jefferson County), Lexington (Fayette County), and dense urban portions of Boone, Kenton, Campbell, Warren, Hardin, and Bullitt counties.

Check USDA Property Eligibility Map

Always verify the address before making an offer. Eligibility can change block by block.

Step 2: USDA Income Limits in Kentucky

USDA loans are income-restricted. Limits vary by county and household size and include income from all adults age 18 and over living in the home, even if they are not on the loan.

Publishing fixed income numbers is unreliable because USDA updates limits annually. Always verify by county.
Northern Kentucky Counties +
  • Boone
  • Kenton
  • Campbell
  • Grant
  • Owen
  • Pendleton
Check Income Limits
Central Kentucky Counties +
  • Anderson
  • Franklin
  • Woodford
  • Jessamine
  • Mercer
Check Income Limits
Western Kentucky Counties +
  • Warren
  • Logan
  • Simpson
  • Christian
Check Income Limits
Eastern Kentucky Counties +
  • Laurel
  • Whitley
  • Knox
  • Pulaski
Check Income Limits

Step 3: Employment and Income Requirements

  • Two-year employment history is standard
  • Short gaps may be acceptable with documentation
  • Self-employed borrowers need two years of tax returns
  • Overtime and bonus income must be consistent

Step 4: Debt-to-Income Guidelines

  • Housing ratio typically capped near 29 percent
  • Total debt ratio typically capped near 41 percent

Higher ratios may be approved with strong compensating factors but are not guaranteed.

Step 5: Credit Requirements

  • Most lenders prefer scores of 620 or higher
  • 640–679 may require additional review
  • Lower scores possible with compensating factors

Borrowers without a traditional credit score may qualify using verified rent and utility payment histories.

Manufactured and Mobile Homes with USDA

USDA allows financing for both new and existing manufactured homes when all requirements are met.

  • HUD-code construction
  • Permanently affixed foundation
  • Titled as real estate
  • Land owned, not leased
Some lenders restrict USDA manufactured home loans to new homes only. This is a lender overlay, not a USDA rule.

USDA Mortgage Insurance

  • Upfront guarantee fee of 1.00 percent (financed)
  • Annual guarantee fee of 0.35 percent paid monthly

USDA Two-Step Approval Process

  • Lender underwriting and conditional approval
  • USDA Rural Development final approval

Most USDA loans close in 30 to 45 days.

Check Your USDA Eligibility in Kentucky

Confirm income limits, property eligibility, and credit readiness before making an offer.

Start USDA Pre-Qualification

Call or text 502-905-3708

NMLS #57916 | Company NMLS #1738461
Equal Housing Lender. Not affiliated with USDA or HUD.
Subject to credit and underwriting approval.
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