USDA rural development
USDA loans in Kentucky. Zero down, and eligible in more of the Louisville area than most buyers realise.
USDA is the most underused loan in this part of the state. No down payment, a smaller monthly fee than FHA, and an eligibility map that covers a great deal of the ring beyond Jefferson County.
A conversation first. No application and no credit check to get an answer.
The map is the whole game
USDA loans are guaranteed by the Department of Agriculture, and eligibility hinges on where the house sits. That word — rural — sends most Louisville buyers straight past the program, which is a shame, because the boundary is drawn far closer to the city than the name suggests.
The built-up core of Jefferson County is excluded. A large amount of what lies beyond it is not. 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 as well.
Eligibility is decided property by property, not town by town — two houses a few streets apart can fall on opposite sides of the line. It takes a moment to check, and it is worth checking before you decide a house is out of reach.
What makes it the cheapest option when it fits
- No down payment. USDA finances up to the appraised value.
- A 1% guarantee fee, paid once and financed into the loan rather than out of pocket.
- A 0.35% annual fee collected monthly — substantially below FHA's equivalent premium.
- Competitive fixed rates, because the government guarantee reduces the lender's risk.
- Closing costs can be covered by seller credits, lender credits, or in some cases Kentucky down payment assistance redirected 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 is an unusual combination, and it is why the program is worth ruling out deliberately rather than by assumption.
The two limits that actually 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 will not be on the loan — which occasionally catches applicants off guard. The caps are revised periodically, 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 is not 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, both of which qualify on entirely different criteria.
Worth asking before you narrow your search
The common sequence is that a buyer settles on a neighbourhood, gets pre-approved for FHA, and never learns that half the houses they were considering could have been bought with nothing down. Send Ryan the addresses you are looking at, or just the areas. Checking eligibility costs nothing and occasionally changes the entire plan.
Run the numbers
What does zero down actually cost monthly?
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 — they are collected here.
Estimated monthly payment
—
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, and while Jefferson County's built-up core is excluded, much of the ring beyond it is not. Parts of Shelby, Bullitt, Oldham, Spencer, Nelson and Henry County frequently qualify, and eligibility is decided address by address rather than by town. It is a quick thing to check, and worth checking 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 will still have closing costs, though seller credits, lender credits and in some cases state assistance can be used against those. It is one of only two genuinely zero-down programs available, 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 are buying in, adjusted for household size, and the limits are revised periodically. Importantly the calculation counts the whole household's income, not only the people on the loan, which occasionally surprises applicants. Because the numbers move, Ryan checks the current figure for your county rather than 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 equivalent monthly premium is meaningfully higher. For a buyer who qualifies for both, USDA is usually the cheaper monthly payment as well as 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 are buying a rental, the route is a DSCR or conventional investment loan instead, which qualifies on different criteria entirely.
No credit pull · No obligation
Put your USDA loan scenario in front of Ryan.
Send the shape of your situation and Ryan will tell you where you actually stand — including when the answer is that a different program, or a different month, serves you better. He reads these himself.
🔒 Nothing on this form touches your credit. No Social Security number, no pay stubs, no application — just enough for Ryan to give you a straight answer. Equal Housing Opportunity. Ryan Miles, NMLS #112627 · Coast 2 Coast Mortgage, LLC, NMLS #376205.