USDA rural development
USDA loans in Kentucky. Zero down, and eligible in more of the Louisville area than most buyers realize.
USDA financing offers a no down payment option for eligible buyers and properties. Around Louisville, check the exact address and household income eligibility before you choose a loan program.
Start with a conversation. No credit check for an initial discussion.
The map decides it
USDA loans are guaranteed by the Department of Agriculture, and eligibility comes down to where the house sits. The word rural sends most Louisville buyers right past the program, and that's a shame, because the boundary is drawn a lot closer to the city than the name suggests.
The built-up core of Jefferson County is excluded. Much of what lies beyond it isn't. Buyers looking around Shelbyville, Taylorsville, Mt. Washington, Bardstown, La Grange, Simpsonville and Pewee Valley routinely find eligible addresses, and stretches of Bullitt, Oldham, Spencer, Nelson and Henry County qualify too.
Eligibility is decided property by property, not town by town. Two houses a few streets apart can land on opposite sides of the line. It takes a minute to check, and I'd check before you decide a house is out of reach.
Schematic. USDA decides eligibility address by address, and the boundary gets redrawn periodically. Send me the addresses and I'll check each one against the current map.
How USDA compares with other loan options
- No down payment. USDA finances up to the appraised value.
- A 1% guarantee fee, paid once and financed into the loan instead of out of pocket.
- A 0.35% annual fee collected monthly, well below FHA's equivalent premium.
- Competitive fixed rates, because the government guarantee lowers the lender's risk.
- Closing costs can be covered by seller credits, lender credits, or in some cases Kentucky down payment assistance put toward costs.
For a buyer who qualifies for both, USDA generally beats an FHA loan in Kentucky on the cash needed at closing and on the monthly payment. That's a rare combination, and it's why I rule the program out by checking, not by assuming.
Current published factors. Upfront figures are a share of the loan amount and are financed; yearly figures are a share of the outstanding balance, collected monthly. VA charges no annual fee at all.
The two limits that decide it
Household income
USDA caps income against the area median for your county, adjusted for household size. The calculation counts income for the entire household, including adults who won't be on the loan, and that catches some applicants off guard. The caps get revised, so the number to work from is the current one for your county, not a figure from an old article.
Owner occupancy
The house has to be your primary residence. USDA isn't available for a rental or a second home. If the property is an investment, the route is a DSCR loan in Kentucky or conventional investment financing, and both qualify on different criteria.
Program factors as published by USDA Rural Development; income limits are set per county and household size and revised periodically.
What USDA won't do
It won't finance a rental, a second home, or a house you don't intend to live in. It won't lend to a household above the income cap, no matter how strong the file is otherwise, and the cap counts every adult's income under the roof. It requires the property to be modest and in sound condition, so a house needing major repair can fail the appraisal the same way it would on FHA. And it won't reach into the built-up parts of Jefferson County at all.
For an eligible purchase, USDA is an important option to compare with FHA, conventional and VA financing where those are available. I'll show you the payment and the cash needed for each choice that fits.
Check before you narrow your search
Send me an address or the areas you're considering. I'll check USDA eligibility while we compare loan programs, so the financing options are part of your home search from the start.
Run the numbers
What zero down costs each month.
The 1% guarantee fee is financed into the loan and the 0.35% annual fee is included in the payment below.
Assumes an eligible address and household income within the county limit. 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 monthly payment
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zero down, guarantee fee financed into the loan
Check these against your fileCommon questions
Which parts of the Louisville area qualify for a USDA loan?
More than people expect. USDA eligibility is drawn on a map of areas classed as rural. Jefferson County's built-up core is excluded, but much of the ring beyond it isn't. Parts of Shelby, Bullitt, Oldham, Spencer, Nelson and Henry County often qualify, and eligibility is decided address by address, not by town. It's a quick check, and I'd do it before you rule a house in or out.
Is there really no down payment on a USDA loan?
Correct. USDA finances up to the appraised value, so no down payment is required. You'll still have closing costs, though seller credits, lender credits and in some cases down payment assistance can be used against those. It's one of only two true zero-down programs, the other being VA.
What are the income limits for a USDA loan in Kentucky?
USDA caps household income against the area median for the county you're buying in, adjusted for household size, and the limits get revised. The calculation counts the whole household's income, not just the people on the loan, which surprises some applicants. Because the numbers move, I check the current figure for your county instead of relying on a published one.
How does the USDA fee compare to FHA mortgage insurance?
USDA charges a one-time guarantee fee of 1% of the loan, financed into the balance, plus an annual fee of 0.35% collected monthly. FHA's monthly premium is noticeably higher. For a buyer who qualifies for both, USDA is usually the cheaper monthly payment and the smaller cash requirement.
Can I use a USDA loan for an investment property?
No. USDA financing is for owner-occupied primary residences only. If you're buying a rental, the route is a DSCR or conventional investment loan instead, and those qualify on different criteria.
No credit pull · No obligation
Let's talk about your USDA 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.