How to Buy Your First Home in Kentucky with Zero Money Down
The Complete 2025 Guide to No Money Down Mortgages in Kentucky
By Joel Lobb |Joel Lobb, Kentucky Mortgage Broker FHA, VA, KHC, USDA Mortgage Loans | Updated August 2025
Get Pre-Approved TodayIntroduction: The Kentucky Dream of Homeownership
For many Kentucky residents, the dream of homeownership feels just out of reach because of down payment requirements. With the state’s median home price at $224,303 in 2025, a traditional 20% down payment would mean saving nearly $45,000 in cash.
Fortunately, Kentucky offers some of the nation’s most generous no money down mortgage programs, including USDA, VA, FHA with assistance, and Kentucky Housing Corporation (KHC) loans. This guide explains how you can purchase your first Kentucky home with little to no upfront cash.
Kentucky's Top Zero Down Payment Programs
| Program | Down Payment | Credit Score | Income Limits | Restrictions |
|---|---|---|---|---|
| USDA Rural Development | 0% | 580+ | Yes | Rural only |
| VA Loans | 0% | No minimum score but 620 preferred | No | Statewide |
| FHA + KHC DAP | 0% with assistance | 580–620+ | Yes | Statewide |
| 5% grant toward Purchase Price | 0% with assistance | 600–640+ | No | Statewide |
Program Snapshots
USDA Loans
- 100% financing
- Available in 95% of Kentucky
- No mortgage insurance
VA Loans
- 0% down payment for veterans & active duty
- No PMI ever
- Lowest interest rates
FHA with Assistance
- Down payment covered by KHC or lender DPA
- Flexible credit scores (580+ for some DPA and 620+ score for KHC $10 Dap loan )
- Great for first-time buyers
Important Note
“No money down” doesn’t always mean zero at closing. You may still need money for closing costs (2–5%). The good news: seller concessions, grants, or KHC programs can often cover those too—meaning true zero out-of-pocket homeownership is possible.
Frequently Asked Questions
Can I really buy a home in Kentucky with no money down?
Yes. USDA and VA loans allow 100% financing. FHA loans can reach zero down when paired with Kentucky Housing’s Down Payment Assistance Program (DAP).
Do I need perfect credit?
No. USDA typically requires 580+, FHA allows 580+ with 3.5% down payment and 500 credit score with 10% down payment, and VA has no minimum score requirement but most lenders want a 620 or above.
What if I don’t have closing cost money?
You can use seller concessions, grants, or lender credits to cover closing costs. Many of my clients purchase with $0 at closing.
Ready to Get Started?
Your Kentucky dream home is closer than you think. I’ll guide you step-by-step, help you choose the right program, and work to get you approved quickly.
Call Joel at (502) 905-3708 Email Me for Pre-Approval