USDA Direct Loans (also known as USDA Section 502 Direct Loans) are a mortgage program that assists low- and very-low income individuals buy decent, safe, and clean housing in rural areas. This is done through payment assistance which increases a borrower’s ability to repay. That payment assistance can be best described a subsidy which lowers the mortgage payment for short periods. The amount of assistance largely depends on the adjusted family income. USDA Direct Home Loans in Kentucky don’t work in the same manner as USDA Guaranteed Loans in Kentucky. The USDA Guaranteed Loan Program is a more popular option and can be used for a wider range of applicant incomes.Kentucky USDA Direct Loans are 100% financing mortgages. Unlike Guaranteed USDA Loans, applicants must have low or very low income to qualify for Direct Loans.

Kentucky USDA Direct Loan Requirements

USDA Direct Loans are a mortgage program available for low-income individuals to buy homes in rural areas. USDA defines low- or very low income as anything between 50% and 80% of the Area Median (AMI). The statewide median income was recently reported as $50,589 in Kentucky, but this number may differ from one county to the next. For home buyers that meet those requirements, USDA Loans are a zero-down mortgage, meaning there’s no down payment. To be eligible, applicants must also meet the following requirements:

  • You don’t presently have decent, clean, sanitary and safe housing.
  • You can’t get another mortgage from a different source with terms and conditions reasonably expected to be met.
  • The subject property must be your primary residence.
  • You must be legally eligible for a mortgage.
  • You must meet citizenship requirements or non-citizen requirements.
  • You must be eligible for participation in federal programs.

In addition, the subject property must meet the following requirements.

  • It must be moderately-sized for that area.
  • The home cause can’t exceed the area’s applicable loan limit.
  • The home can’t be designed for the production of income.

How much can I borrow with a USDA Direct Mortgage?

Up to the maximum loan limit, the amount of money that an applicant’s eligible for depends on their ability to pay it back. When evaluating home loan applicants for Direct home loans, Rural Development considers income, assets, debt, and payment assistance. And remember, you can’t borrow more than the local USDA loan limit for the county where the home is located, no matter what your repayment ability may be.

What areas in KY are eligible for USDA Direct Loans?

The subject property must be in an approved rural area. You can search specific addresses in Kentucky for USDA eligibility here.

Are there other zero down mortgage options or low down payment mortgages in Kentucky?

Yes, other low down payment mortgage options, and no down payment mortgage options are available in Kentucky besides USDA Direct Loans. You can start by looking into USDA Guaranteed Loans in Kentucky, FHA Loan in Kentucky, or if you’re a veteran or qualified family member, VA Loans in Kentucky. You may also want to research if any helpful Kentucky down payment assistance programs may be available.

Search all USDA Guaranteed Loan Limits (Direct and Guaranteed Loans)
Learn about today’s USDA Loan Requirements

Direct Loans aren’t as popular as USDA Guaranteed Loans, which accommodate a wider range of borrower qualifications. The USDA sets specific maximum mortgage limits for Direct Loans in Kentucky. Search home loan limits for your area below.

Kentucky USDA Direct Loan Limits

Direct Loan Limit
Adair $251,862
Allen $251,862
Anderson $251,862
Ballard $251,862
Barren $251,862
Bath $251,862
Bell $251,862
Boone $251,862
Bourbon $251,862
Boyd $251,862
Boyle $251,862
Bracken $251,862
Breathitt $251,862
Breckinridge $251,862
Bullitt $251,862
Butler $251,862
Caldwell $251,862
Calloway $251,862
Campbell $251,862
Carlisle $251,862
Carroll $251,862
Carter $251,862
Casey $251,862
Christian $251,862
Clark $251,862
Clay $251,862
Clinton $251,862
Crittenden $251,862
Cumberland $251,862
Daviess $251,862
Edmonson $251,862
Elliott $251,862
Estill $251,862
Fleming $251,862
Floyd $251,862
Franklin $251,862
Fulton $251,862
Gallatin $251,862
Garrard $251,862
Grant $251,862
Graves $251,862
Grayson $251,862
Green $251,862
Greenup $251,862
Hancock $251,862
Hardin $251,862
Harlan $251,862
Harrison $251,862
Hart $251,862
Henderson $251,862
Henry $253,000
Hickman $251,862
Hopkins $251,862
Jackson $251,862
Jessamine $251,862
Johnson $251,862
Kenton $251,862
Knott $251,862
Knox $251,862
Larue $251,862
Laurel $251,862
Lawrence $251,862
Lee $251,862
Leslie $251,862
Letcher $251,862
Lewis $251,862
Lincoln $251,862
Livingston $251,862
Logan $251,862
Lyon $251,862
Madison $251,862
Magoffin $251,862
Marion $251,862
Marshall $251,862
Martin $251,862
Mason $251,862
McCracken $251,862
McCreary $251,862
McLean $251,862
Meade $251,862
Menifee $251,862
Mercer $251,862
Metcalfe $251,862
Monroe $251,862
Montgomery $251,862
Morgan $251,862
Muhlenberg $251,862
Nelson $251,862
Nicholas $251,862
Ohio $251,862
Oldham $253,000
Owen $251,862
Owsley $251,862
Pendleton $251,862
Perry $251,862
Pike $251,862
Powell $251,862
Pulaski $251,862
Robertson $251,862
Rockcastle $251,862
Rowan $251,862
Russell $251,862
Scott $251,862
Shelby $253,000
Simpson $251,862
Spencer $253,000
Taylor $251,862
Todd $251,862
Trigg $251,862
Trimble $253,000
Union $251,862
Warren $251,862
Washington $251,862
Wayne $251,862
Webster $251,862
Whitley $251,862
Wolfe $251,862
Woodford $251,862

More USDA Loan Resources

USDA Direct Loan Income Limits (Low Income)
USDA Direct Loan Limits (Low Income)

All USDA Loan Limits
All USDA Loan Income Limits
USDA Loan Requirements
USDA Loan Programs
USDA Loan Calculator

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