First-Time Home Buyer Programs in Kentucky

Kentucky Housing Corporation (KHC) Programs:

Conventional Preferred Program:

Eligibility: Open to first-time (no homeownership in past 3 years) and repeat buyers statewide.
Offerings: 30‑year fixed conventional mortgage with 3% down, reduced-rate mortgage insurance; enroll in KHC DAP.
Requirements:

• Income ≤ county-specific limits (purchase price cap $510,939). View program details.
• Credit score ≥ 660.
• Debt-to-income ratio capped at 50% (some cases up to 50%).
• Homebuyer education required for first-time buyers.
• Purchase price limit is $510,939.

Regular Down Payment Assistance Program (DAP):

Benefits: Up to $10,000 as a repayable second loan (3.75% interest, 10-year term). More about DAP.

Affordable DAP:

Description: Up to $7,500 as a lower-rate (1%) repayable second loan over 10 years for buyers ≤ 80% AMI; need KHC first mortgage.

Closing Cost Grant (2025 Limited Availability):

Benefits: One-time, non-repayable $2,000 grant for the first 500 KHC homebuyers in 2025. Grant details.

Local & Developer Assistance:

Development Subsidy Programs

HOME/AHTF Subsidies: Up to $40,000 (or more with waiver requests) in forgivable homebuyer assistance through developer-funded programs. Developer policy manual.

Additional Information:

• Mortgage Credit Certificate (MCC): 20% federal tax credit on mortgage interest (max $2,000/year); available to KHC borrowers.
• USDA Loans: Zero-down mortgages in rural areas.
• VA Loans: Zero-down for eligible veterans/active-duty military.
• FHA Loans: 3.5% down with credit ≥ 580.