• No down payment required, 100% Financing
  • 30 year fixed term rate only. Doesn’t offer shorter terms.
  • Can refinance existing USDA loan to another USDA loan, but cannot refinance any other type of loan i.e. FHA, VA, KHC, Fannie Mae etc to a USDA loan.
  • Uses an online AUS to pre-approve and underwriter loans called GUS
  • Mortgage insurance for 2017 set at 1% upfront and .35% monthly. Very cheap compared to FHA.
  • Sellers can pay closing cost and prepaids up to appraised value or if written in sales contract
  • Must be approved through both the lender and USDA, so it takes a little longer to close these loans, typically 30-45 days based on current USDA turn times in Kentucky
  • There are two types offered: Direct and Guaranteed. The Guaranteed loan is the one option offered by lenders and the income is not checked annually like the Direct Program. The Direct Program is subsidized and your income and rate may change annually based on your income.
  • No mobile homes or homes that are old, (over 100 years old)
  • No major “fixer-upper” type homes.
  • Must meet FHA appraisal requirements, typical costs for an appraisal is now $400
  • Home inspection not required.
  • 640 is the magical score needed for a Automated Underwriting Approval. If lower, can be difficult to get approved, but not impossible.Some lenders will go down to 600 with compensating factors such as verifiable rent history, 4 months reserves or large funds saved for a rainy day fund and going down in house payment.
  • 2 at least two trade lines on the credit report that have been rated for 12 months to validate the credit score and GUS Approval. Does not have to be open and active
  • 3 years removed from bankruptcy
  • ** If the mortgage debt that was foreclosed, was included in a Bankruptcy – then the USDA Home Loan waiting periods after foreclosure “waiting period” of 3 years, starts from the date of the discharge of the Bankruptcy.  Because it can take 6 months or more for Banks to process the Foreclosure, and transfer title, this is a tremendous plus.



Kentucky USDA Home Loan Income Limits

Rather than loan limits, USDA has implemented income limits. These limits are generous as they are 115% of the moderate income level for the household size of the County your buying in.

Like all home loans, your income will determine what size loan amount you can qualify for.

Click Here to use USDA’s income chart. Click in income Eligibility Single Family Housing. Click on your the Kentucky USDA State link, then look at the County you’re buying in underneath the column that reflects your household size. Use the largest income number on the chart.

Note: Regardless of who will be on the loan, ALL household income for ALL adults must be considered for income compliance for Kentucky USDA Rural Housing Loans

Text or call 502-905-3708


Kentucky USDA Property Eligibility

Basically, the USDA home loan program has 2 things it looks at when determining property eligibility:
(1) Location
(2) Physical Properties of the house.

Kentucky Location Eligibility:
Determining the location eligibility is simple. Just Click Here and use this tool to determine if your area is eligible. Simply click on your State, the whatever County your looking in. This will bring up a color coded map. The areas shaded in “orange” are ineligible, all other areas are O.K. It’s that simple!

Physical Properties:

  • Single family homes only (no multi-units homes)
  • Condos/Townhomes Ok
  • No mobile homes
  • No income producing farms i.e. cattle, tobacco, corn, agriculture income allowed.
  • Swimming pools (Above Ground Only) can not be used to determine the value of the home
  • An FHA appraisal will be used
  • Basically, a standard home in working order is what’s expected…this is NOT a “fixer upper” program
  • No set acreage limit but usually 10 acres is a good stopping point in my experience

Joel Lobb
Senior  Loan Officer


American Mortgage Solutions, Inc.

10602 Timberwood Circle, Suite 3

Louisville, KY 40223

text or call my phone: (502) 905-3708
email me at

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, ( Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.