First Time Home Buyer Programs in Kentucky – KHC & DAP Loan Information

The Kentucky Housing Corporation (KHC) recognizes that the down payment, closing costs and pre-paids are stumbling blocks for many potential home buyers. Here are a couple of Down Payment Assistance programs to help.

KHC Conventional Preferred

The Kentucky Housing Corporation’s Conventional Preferred program offers a mortgage with a fixed interest rate. You can be a first-time homebuyer, but that isn’t required to take advantage of this mortgage program. There’s no minimum borrower contribution or reserves required to be eligible, but you’ll have to pay for a (reduced rate) mortgage insurance. There are property requirement that must be met and the KHC purchase maximum price limit of $327,334 must me met.

Borrower requirements:

  • Minimum credit score of 660
  • 3 percent down payment
  • Monthly mortgage insurance (charter coverage)
  • All KHC DAPs applicable
  • No minimum borrower contribution
  • No reserves required
  • 80 percent AMI income

KHC Conventional Preferred Plus 80

The Conventional Preferred Plus 80 program through KHC also offers a mortgage with a fixed interest rate, however standard mortgage insurance coverage is necessary.

  • Minimum credit score of 660
  • 3 percent down payment
  • Monthly mortgage insurance (standard coverage)
  • All KHC DAPs applicable
  • No minimum borrower contribution
  • No reserves required
  • Secondary Market Income limits apply

The down payment, credit score and DTI ratio requirements for the Conventional Preferred Plus 80 program are the same as the Conventional Preferred program, and the maximum purchase price is also $327,334. However, the income limits are different, vary according to county.

Federal Housing Administration Loans (FHA)

Homebuyers can also obtain an FHA with the help of KHC. These loans are insured by the Federal Housing Administration. These types of loans either require a low down payment (or potentially none at all), which can be great for a first-time homebuyer. Requirements:

    • 3.5 percent down payment
    • All KHC DAPs applicable
    • Upfront and monthly mortgage insurance
    • Minimum credit score of 620

VA Loans

VA loans are only available to military members and veterans.

  • Guaranteed by the Veterans Administration for qualified military veterans
  • No down payment if the property appraises for the sales price or greater
  • All KHC DAPs applicable
  • Minimum credit score of 620
  • No monthly mortgage insurance payments

Kentucky Down Payment Assistance

Regular Down Payment Assistance Programs (DAP)*

KHC offers down payment help to borrowers through the Regular Down Payment Assistance Program (DAP), a loan of up to $6,000. The loan is repayable over 10 years at an interest rate of 5.5 percent.

o Purchase price up to $327,334
o Assistance in the form of a loan up to $6,000 in $100 increments
o Repayable over a 10-year term at 5.5 percent.
o Available to all KHC first-mortgage loan recipients

The program is open to all KHC first mortgage borrowers using the same application. You can be a first-time home buyer, but that’s not a requirement. The purchase price of your home can’t exceed $327,334, but there’s no limit on the cash reserves you can have, and your liquid assets won’t be considered when determining your eligibility.

Affordable Down Payment Assistance Programs (DAP)*

For lower income borrowers, the KHC also offers money in a 10-year down payment assistance loan, but at an interest rate of just 1 percent. This Affordable DAP is potentially available to all home buyer buyers, but to qualify you must meet certain income limits.

o Purchase price up to $327,334
o Assistance up to $6,000
o Repayable over a 10-year term at 1.00%
o Borrowers must meet Affordable DAP household income limits

These vary by county and range from $42,720 to $68,160.

Let an Experienced Lexington Mortgage Lender Guide You

As you can see from the above information, there are many different loan assistance programs that you can qualify for in Kentucky. Give me a call and let me help make sure you take advantage of the any of these assistance programs: 859-433-4558 or click here to find out about Grant Funds for Down Payment Assistance.
Kentucky Housing Corporation website http://www.kyhousing.org

* Certain restrictions apply. Not available in all areas. Please contact your PrimeLending loan officer for more details.