Published October 1, 2026

How to Qualify for a Mortgage in Kentucky and Tennessee

Written by Megan Uvanni

Megan and Joseph Uvanni at their first closing together

By Megan Uvanni, REALTOR® | Keller Williams First Choice

Start here before you start looking at homes

“I don’t even know if I can qualify for a mortgage.” If that thought has kept you from looking for a home, a conversation with a lender is a good place to start. You don’t need to have every detail figured out before asking about your options.

Whether you’re buying in Bowling Green, elsewhere in Warren County, or in Middle Tennessee communities like Gallatin, Lebanon, or White House, understanding your financing before touring homes helps you focus on a realistic budget. Here’s what lenders look at and how to get started.

The four things lenders look at

1. Your credit. Your score affects whether you qualify, which loan types are open to you, and the rate you’ll get. A higher score usually means a lower payment. Lenders also look at your history: on-time payments, how much of your available credit you’re using, and any recent late payments or collections.

2. Your income and job history. Lenders review your employment history, typically covering the past two years, and whether your income is stable and likely to continue. You don’t necessarily need two years with the same employer. Salary, hourly pay, commission, and self-employment income have different documentation and history requirements.

3. Your debt-to-income ratio (DTI). This compares qualifying monthly debt payments, including your proposed mortgage payment, taxes, insurance, and any HOA dues, with your gross qualifying monthly income. Car loans, student loans, and credit card minimum payments can reduce your buying power. Ask your lender which debt payoff would help most before using savings you may need for closing.

4. Your down payment and savings. Many buyers think they need 20% down. Most don’t. Several loan programs allow a small down payment or none at all. You’ll also want money set aside for closing costs and a cushion after you move in.

No down payment doesn’t mean no closing costs. Depending on your loan, eligible gift funds, seller credits, or lender credits may help with upfront expenses. Lender credits typically involve a higher interest rate, so compare the upfront savings with the ongoing cost. Ask for an estimate of the total cash you will need before making an offer.

The main loan types

The right loan depends on your credit, savings, eligibility, and where you’re buying. These are general program guidelines; individual lenders may have additional requirements.

Loan type	Often a good fit for	Down payment	Worth knowing
Conventional	Buyers with qualifying credit and income	As little as 3% on eligible programs	PMI is generally required with less than 20% down and can be removed when applicable conditions are met. Credit requirements vary by program and lender.
FHA	Buyers who may benefit from flexible credit guidelines	As little as 3.5% with qualifying credit	Credit requirements vary by lender. Upfront and annual mortgage insurance apply; duration depends on loan terms.
VA	Eligible veterans, service members, and surviving spouses	Often 0%, subject to entitlement and loan conditions	No monthly mortgage insurance. A funding fee may apply unless exempt. Lenders set their own credit requirements.
USDA	Eligible buyers purchasing a primary home in a qualifying area	0% for eligible borrowers and properties	Household income limits, address eligibility, and credit requirements apply. Upfront and annual guarantee fees generally apply.

Down payment assistance is available in both states. The Kentucky Housing Corporation and the Tennessee Housing Development Agency offer down payment and closing cost assistance through participating lenders. Eligibility, assistance amounts, and repayment terms depend on the program, so ask a participating lender which options fit your situation. I’m happy to point you in the right direction.

USDA isn’t limited to farms. Property eligibility is address-specific, and household income limits apply. Send the address to your lender for a map check instead of assuming an entire town or county qualifies.

When your situation is complicated

My credit isn’t great. That doesn’t automatically rule out buying a home. A lender can review your mortgage credit report and help identify useful next steps. Paying down high credit card balances may help, but results and timing vary. Keep payments current and ask your lender before closing accounts, disputing items, or paying collections during the mortgage process.

I’m self-employed. Self-employment doesn’t prevent you from qualifying. Lenders generally review documented business income rather than gross revenue. Tax returns and current business financials may be required. Six to twelve months before buying, review your documentation with a lender and your tax professional. Deductions can affect qualifying income, although some expenses may be added back under program rules.

I have a lot of debt. Monthly payments matter, not just your total balance. Paying off the right debt can improve your DTI, but spending all your savings on debt may create another problem. Have your lender compare options before financing a car, opening credit, or making a large payoff.

How pre-approval works

A pre-approval estimates what you may qualify to borrow and shows sellers you’ve taken the financing process seriously. Your comfortable budget may be lower than the maximum approval amount. Final approval still depends on underwriting, the property, and any remaining conditions. Here’s the usual order:

Have a quick conversation with a lender about your goals.
Gather your documents: recent pay stubs, W-2s or tax returns, bank statements, and a photo ID.
The lender reviews your credit, income, debts, and savings.
You get a pre-approval letter with your price range and loan options.
Then we start looking at homes that fit.

After pre-approval, talk to your lender before opening new credit, financing a car, changing jobs, or moving large amounts of money. Changes to your income, debt, or funds for closing can affect your approval.

Common questions

Can I buy a home with no money down in Kentucky or Tennessee? Possibly. VA and USDA loans allow 0% down for eligible buyers and properties. You’ll still need money for closing costs unless gift funds, seller credits, or lender credits cover them.

What credit score do I need to buy a house? It depends on the loan type and the lender. FHA guidelines are generally more flexible than conventional loans. A lender can review your credit and tell you which programs fit.

How long does pre-approval take? Often a day or two once your documents are in. The quicker you send pay stubs, W-2s or tax returns, and bank statements, the quicker you’ll have an answer.

Does USDA cover Bowling Green or Middle Tennessee? Some areas qualify and some don’t, and eligibility is checked by address. Send the address to your lender for a map check before you fall in love with a home.

Let’s figure out where you stand

You don’t have to have everything perfect to start. The first step is just a conversation.

If you’d like a lender recommendation, my husband, Joseph Uvanni, is a mortgage loan officer with Thoroughbred Home Loans, LLC, licensed in Kentucky and Tennessee. His background includes more than a decade in mortgage underwriting, so he understands how a loan is evaluated behind the scenes. You’re always welcome to use any lender you choose.

Ready to find out where you stand? Contact Joseph at (270) 994-8879 or joseph@thoroughbredhomeloans.com to talk through your financing options. When you’re ready to start your home search, call or text me at (270) 792-8982 or search homes for sale.

Educational information only. This is not a commitment to lend. All loans are subject to credit and property approval, program eligibility, and lender requirements. Interest rates and products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at closing for all benefits. Thoroughbred Home Loans, LLC supports Equal Housing Opportunity | NMLS #2595759 | AL #2595759, FL #MBR7661, IN #2595759, KY #MB66290, TN #2595759 | MLO NMLS #1109109, TN #1109109, KY #MC923840 | www.nmlsconsumeraccess.org | (270) 569-1429 | 1550 Westen Street, Bowling Green, KY 42104

Equal Housing Opportunity