Conventional
Conventional loans in Kentucky. Flexible financing for first-time buyers, repeat buyers and homeowners.
From 3% down for eligible buyers, with mortgage insurance that drops off instead of following you for the life of the loan. If your credit is solid, this is usually the loan to beat.
Start with a conversation. No credit check for an initial discussion.
You don't need 20% down
The most expensive piece of advice in this business is that you need 20% down. It isn't a requirement and never has been for conventional financing. It's the point where mortgage insurance stops being charged.
Conventional loans start at 3% down for eligible buyers. I can compare a smaller down payment with putting more down, including what each does to mortgage insurance, the monthly payment, and the cash you keep available.
Agency program rules as published by Fannie Mae and Freddie Mac. Individual lenders add their own overlays, which is why I shop the file.
Why removable mortgage insurance matters
This is the structural reason conventional often wins. Conventional mortgage insurance is temporary. You can request cancellation once your balance reaches 80% of the original value, and it terminates automatically at 78%. If the home has appreciated, a fresh appraisal can get you there well ahead of the amortization schedule.
Compare that with an FHA loan in Kentucky, where on most loans made today the monthly premium stays for the life of the loan and the only way out is a refinance. Over a seven- or ten-year hold, a removable cost and a permanent one produce very different totals even when the rates look identical on day one.
Where your credit score turns into money
On a conventional loan the score does two jobs. It prices the interest rate, and it separately prices the mortgage insurance premium. Both move in tiers, so it pays to fix a file that's sitting a few points below a threshold before closing, not after.
A small change in your credit profile can sometimes improve the terms available, like paying down one card or correcting something that was reported wrong. If an improvement is worth considering, I'll explain the expected benefit and the timing before you decide how to proceed.
Illustrative of how agency pricing grids are structured; the exact adjustments vary by loan-to-value and change over time. The lesson is the shape. A few points at a boundary are worth fixing before closing, not after.
HomeReady and Home Possible: 3% down conventional programs
Fannie Mae's HomeReady and Freddie Mac's Home Possible offer low down payments and reduced mortgage insurance requirements for eligible borrowers. Qualifying income generally can't be more than 80% of the area median income for the property's location.
I'll check the current income limit for the property, whether it's in Louisville or I'm working as your mortgage broker in Lexington, and compare these programs with other conventional options. If the income limit doesn't fit, other low-down-payment programs may still be available, and conventional financing can be paired with Kentucky down payment assistance.
Where conventional runs out
- Above the conforming limit, the loan becomes a jumbo loan in Kentucky with its own guidelines. The limit is revised every year.
- When income is hard to document (self-employment with heavy write-offs is the classic case), a bank statement loan in Kentucky often qualifies a lot more of your real income.
- When the rental is the borrower, not you, a DSCR loan in Kentucky qualifies on the property's rent instead of your tax returns.
- When credit history is the obstacle, FHA is usually the more forgiving route.
Knowing where each program stops is a big part of my job. I run your file against several of them and show you the difference in dollars.
Run the numbers
Price a conventional purchase in this market.
Principal, interest, taxes and insurance. Adjust the down payment to see where you cross the 20% mortgage-insurance threshold.
Mortgage insurance isn't included below. It applies under 20% down and gets quoted from your credit profile. These are illustrative estimates, not a rate quote, an offer, or a commitment to lend. Your real figures depend on your full file. Every other program has its own calculator, and they are collected here.
Estimated payment before mortgage insurance
…
principal + interest + taxes & insurance
Check these against your fileCommon questions
How much do I need down for a conventional loan in Kentucky?
Eligible buyers can go as low as 3% down, and 5% is common. Twenty percent isn't a requirement. It's the point where mortgage insurance stops being charged. Plenty of buyers are better off putting less down, keeping reserves, and paying mortgage insurance for a few years until equity removes it.
When does conventional mortgage insurance come off?
This is conventional's big advantage over FHA. The mortgage insurance is removable. You can request cancellation once the balance reaches 80% of the original value, and it terminates automatically at 78%. If the property has appreciated, a new appraisal can get you there faster than the amortization schedule would. It isn't a permanent cost the way FHA's usually is.
What credit score do I need?
The practical floor is around 620, but the score does more than decide eligibility. It prices the loan, and separately it prices the mortgage insurance. The jump between score tiers can be real money every month, so a file sitting a few points below a threshold is often better fixed with a short delay than closed as-is.
Is a conventional loan better than FHA?
It usually costs less over time when your credit supports it, because the mortgage insurance eventually goes away. FHA is more forgiving when credit history or debt ratios are the problem. The right way to choose is to price both against your real scenario and compare total cost over the years you expect to own the house, not headline rates.
Can I use a conventional loan for a rental property?
Yes. Conventional financing covers investment property, usually with a larger down payment and pricing adjustments for the occupancy. It qualifies on your personal income and debts, and that's the key difference from a DSCR loan, which qualifies on the property's rent and ignores your tax returns.
No credit pull · No obligation
Let's talk about your conventional loan.
Tell me what you're buying or refinancing, your timing, and the questions you want to work through. I'll review the details and contact you about the next step.
🔒 Nothing on this form touches your credit. No Social Security number, no pay stubs, no application. Just enough for me to follow up with you. Equal Housing Opportunity. Ryan Miles, NMLS #112627 · Coast2Coast Mortgage, LLC, NMLS #376205.