Pros and cons
Other Kentucky first-time homebuyer loans
Kentuckians can also take advantage of national loan programs geared toward first-time homebuyers. These include:
- FHA loans: Loans insured by the Federal Housing Administration (FHA) have more lenient financial requirements than other loans. You can get an FHA loan with 3.5 percent down if you have a credit score of at least 580.
- VA loans: For qualifying active-duty military, veterans and surviving spouses, a loan guaranteed by the U.S. Department of Veterans Affairs (VA) is a great option. These loans typically come with lower interest rates and don’t require a down payment.
- USDA loans: Loans guaranteed by the U.S. Department of Agriculture (USDA) also require no down payment, but you’ll need to buy in a designated rural area.
- HomeReady and Home Possible loans: HomeReady and Home Possible are loan programs created by government-sponsored enterprises Fannie Mae and Freddie Mac. They’re specifically for first-time homebuyers, with only a 3 percent down payment requirement and more flexible income requirements.
Homebuyers can obtain an FHA, VA or USDA loan with the help of KHC and use program assistance for the down payment — if one is required.
Get started
Ready to join the first-time homebuyer club in Kentucky? Follow these steps to make the process smoother and cheaper.
- Compare Kentucky mortgage rates: Rates, discount points, fees – every lender is going to offer you a slightly different cost for buying a home in Kentucky. Review multiple offers to see where you’ll score the biggest savings.
- Read Kentucky mortgage lender reviews: Will your lender be able to help you navigate homebuyer assistance programs? Will your loan officer respond promptly to your questions? Reading other borrowers’ perspectives can help you assess these, and other, factors.
- Estimate your homeowners insurance costs: You won’t just be paying the principal and interest on a loan; you’ll also need to budget to protect the property. Make sure you know whether you’ll need to add flood insurance to the policy, which is an additional cost.
- Study the Kentucky housing market: How quickly are homes selling? Are sellers regularly getting above-list offers? Research the local market, and keep in mind that buying a home in Bowling Green may look quite different from buying a home in Lexington.
- Get your credit in the best shape possible: Don’t just meet the Kentucky Housing Corporation’s bare minimum for credit score. If you can boost your score, you’ll be able to qualify for a lower rate from a lender, which can save you a big chunk of money in interest over the life of a loan.