There are indeed several programs available that can help potential homebuyers achieve this goal. Let’s go through some of the main options:
Kentucky Housing Corporation (KHC) Programs: KHC offers several down payment assistance programs, including:
Regular Down Payment Assistance Program
These programs can provide up to $12,500 in down payment assistance, which can effectively result in a zero down payment for some buyers.
FHA Loans: While FHA loans typically require a 3.5% down payment, this can be covered by down payment assistance programs, effectively resulting in zero down payment for the buyer.
VA Loans: For eligible veterans, active-duty service members, and certain military spouses, VA loans offer 100% financing with no down payment required.
USDA Rural Development Loans: These loans are available for homes in eligible rural areas and offer 100% financing with no down payment.
$20,000 Kentucky Welcome Home Grant: This grant can provide up to $20,000 in down payment assistance for eligible homebuyers.
5% Grant: Some lenders offer a 5% grant that can be used towards down payment and closing costs.
Qualifying criteria for these programs generally include:
Credit Score: Typically, a minimum score of 620 is required, but some programs may accept lower scores.
Income: Many programs have income limits based on the area’s median income.
Work History: Most lenders prefer a stable work history of at least two years.
Assets: While these programs aim to help with down payments, having some savings for closing costs and reserves is often beneficial.
It’s important to note that qualifying criteria can vary significantly between programs and lenders. Additionally, while these programs can help achieve a zero down payment, buyers should be aware that this often results in higher monthly payments and potentially higher interest rates.
Home Buying Grants in Kentucky: A Guide for Prospective Homeowners
Kentucky offers several grant programs to help residents achieve their dream of homeownership. These programs provide financial assistance to eligible buyers, making the purchase of a home more affordable. Here’s an overview of the current grant options available to Kentucky homebuyers:
1. Kentucky Housing Corporation (KHC) Down Payment Assistance Program
The KHC offers up to $12,500 in down payment assistance to eligible first-time homebuyers. This program can be used in conjunction with KHC’s first mortgage loans.
Eligibility:
Must be a first-time homebuyer or not have owned a home in the past three years
Meet income and purchase price limits, which vary by county
Complete a homebuyer education course
2. Kentucky Affordable Housing Trust Fund
This program provides funds to create or preserve affordable housing for low-income households. While not a direct grant to homebuyers, it can help create affordable housing opportunities.
3. USDA Rural Development Grant
Although not specific to Kentucky, this federal program is available in many rural areas of the state.
Key features:
Provides loans and grants for low-income individuals in rural areas
Can be used for home purchases or repairs
Income limits and location restrictions apply
4. Louisville Metro Down Payment Assistance Program
Specific to Louisville, this program offers forgivable loans of up to $25,000 to help with down payment and closing costs.
Eligibility:
Must be a first-time homebuyer
Income must be at or below 80% of the area median income
Property must be located within Louisville Metro
5. Lexington Homeownership Assistance Program
This program, specific to Lexington, provides up to $15,000 in down payment and closing cost assistance.
Eligibility:
Must be a first-time homebuyer
Income must be at or below 80% of the area median income
Property must be located within Lexington-Fayette Urban County
6. Individual Development Account (IDA) Program
While not exclusive to homebuying, this program can help prospective homeowners save for a down payment.
Key features:
Provides matching funds for savings (typically $2 for every $1 saved)
Can be used for homeownership, education, or starting a small business
Income and asset limits apply
How to Apply
To apply for these grants, contact the respective program administrators:
For city-specific programs: Contact your local housing authority or visit the city’s official website
Remember that grant availability and terms may change, so it’s essential to check with the program administrators for the most up-to-date information. Additionally, many of these programs require participants to complete homebuyer education courses, which can provide valuable information about the homebuying process.
By taking advantage of these grant programs, Kentucky residents can make their dream of homeownership more attainable. Be sure to explore all options and consult with housing counselors or financial advisors to determine the best path to homeownership for your specific situation.
Joel Lobb Mortgage Loan Officer NMLS 57916
EVO Mortgage 911 Barret Ave, Louisville, KY 40204 Company NMLS ID # 173846
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org).
