Kentucky FHA Home loan programs for people with bad credit
FHA loans are designed to make housing more affordable with lower down payment requirements than conventional loans on purchases and less home equity requirements on refinances. Less stringent qualification guidelines and the security of a government-insured loan makes FHA a popular choice for consumers.
Kentucky FHA Loans with 580 Credit scores and – Low Down Payment – 3.5% which can be gifted from relatives or borrowed off one's retirement account. If your scores is between 500-579, 10% down needed for home loan and subject to underwriting approval.
- Low down payment
- 500 minimum credit score from 10% down, to 580 above credit score with 3.5% down payment
- Can be used with Grants for Down payment through Eligible Sources
- FHA max loan – $336,750 in the State of Kentucky
- FHA approved condos eligible
- Entire Down payment can be a gift, a down payment assistance program or grant funds
- Seller can pay 6% of purchase price toward closing costs
Quick guide to checking your credit score for Kentucky FHA loans
If you’re just starting to shop for home mortgages, it pays to know if banks think you have bad credit or not. Here’s how FICO, the main credit score provider in the U.S., breaks down credit scores:
- 800-plus: Exceptional
- 740-799: Very good
- 670-739: Good
- 580-699: Fair
- 579 and lower: Poor
Kentucky FHA loans
Kentucky FHA Loan Details | |
|---|---|
Credit score required | 500, but banks have minimum underwriting standards |
Down payment required | Credit score between 500-579: 10 percent Credit score above 580: 3.5 percent |
Upfront financing fee | 1.75 percent, which can be financed |
Mortgage insurance | 0.45 to .85 percent |
Mortgage limits | Generally, $336,766 for single-family units, but it varies by location and you should check the limits in your area |
Fine print | Mortgage insurance premiums are paid for the life of the loan, except when putting 10 percent or more down. If your down payment is less than 20 percent but 10 percent or more, you must have mortgage insurance for 11 years. |
Quick take
If you have bad credit, an Kentucky FHA loan offers a more accessible mortgage. While credit standards vary by lender, you may qualify for the Kentucky FHA loan with a credit score as low as 500. With a credit score above the 580 threshold, you may qualify for the 3.5 percent down payment.
Unfortunately, an Kentucky FHA loan can be expensive because of mortgage insurance fees. In addition to paying ongoing mortgage premiums for the life of the loan, you’ll have to pay a 1.75 per
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