FHA Loans

A family walking out of their new home.

The FHA loan has opened doors for millions of families.

Get an affordable loan with a smaller down payment and other financial advantages. 

Sometimes, it feels like it could take a million years to save up the tens of thousands of dollars needed to qualify for many mortgages. But there is another way. For decades, the Federal Housing Administration has helped clear away financial hurdles and help everyday people obtain the affordable mortgages they need to live their best lives. Paducah Bank lenders are happy to work with you to see if you might qualify.

What is a Kentucky FHA Loan? 

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD). It’s designed to help people who might not qualify for a conventional mortgage, especially first-time homebuyers or those with less-than-perfect credit buy a home.

  • Designed for borrowers with low and modest incomes
  • A popular choice for first-time homebuyers
  • Only 3.5% down payment
  • Flexible credit score requirements
  • Low rates on fixed-rate and adjustable-rate loans 
  • No pre-payment penalties
  • Manufactured and mobile homes ineligible
  • Maximum loan amounts vary by county
 

Get started on your FHA Loan application process with our online mortgage application or find a lender. You can also visit one of our Paducah or Louisville, Kentucky branches.

Kentucky FHA loan benefits

Low down payment

Get an affordable mortgage by putting down as little as 3.5%.

Hard work pays off

Flexible credit guidelines as long as you have a solid employment history.

Local assistance

You'll work directly with friendly Paducah Bank lenders and not government agencies.

Kentucky FHA Loan Requirements

  • Minimum Credit Score: Typically 580+ for a 3.5% down payment. Scores between 500-579 may still qualify with 10% down.
  • Down Payment: As low as 3.5%. Gift funds from family members are generally allowed with documentation.
  • Debt-to-Income Ratio (DTI): FHA generally prefers a DTI below 43%. 
  • Employment and Income: Steady employment and verifiable income are required. 
  • Primary Residence: The home must be your primary residence. FHA loans are not intended for vacation homes or investment properties.
  • Mortgage Insurance: FHA loans require an upfront mortgage insurance premium (UFMIP) and monthly mortgage insurance premiums (MIP).
  • Property Requirements: The home must meet FHA appraisal and safety standards. FHA appraisals are more strict than some conventional loans.
  • Kentucky-Specific Notes: Kentucky Housing Corporation (KHC) programs can often be paired with FHA loans for down payment assistance.
  • 2026 FHA Loan Limits in Kentucky: For most Kentucky counties, the single-family home limit is approximately $541,287.
  • Quick Example: For a $250,000 home, a 3.5% down payment equals $8,750. FHA allows lower credit scores than many conventional loans, which is why it is popular with first-time buyers.
  • Why Paducah Bank: Paducah Bank is proud to be recognized as a 5-Star rated bank, reflecting our strong financial performance, stability, and commitment to responsible banking.
How to Apply for FHA Loan
Find a Lender Start Application
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