Kentucky Housing Corporation (KHC) Programs:
Updated June 15, 2026KHC offers below-market 30-year mortgage options (MRB or Secondary Market) paired with state down payment assistance issued through KHC-approved lenders. Key official resources: KHC Down Payment Assistance and KHC lender resources for program grids and income/purchase limits. Always apply through a KHC-approved lender.
Kentucky First-Time Homebuyer Mortgage Programs:
Eligibility: First-time buyers (no ownership in last 3 years) or buyers in targeted counties; household income must meet program charts by county.
Offerings: 30-year fixed mortgages (MRB/Secondary Market) that can be paired with FHA, VA, USDA, or conventional first mortgages and KHC second-mortgage DPA.
Requirements:
- Income limits: county- and program-specific (see KHC income charts and MRB/Secondary Market program grids on KHC's site). See KHC MRB program grid for current caps.
- Minimum credit score (typical): ~620 for government loan products (FHA/VA/USDA); ~660 commonly required for conventional KHC loans — see KHC lender FAQs for exact loan-type rules. See KHC MRB guidance for lender rules.
- Debt-to-income: lender- and product-dependent; KHC grids show common back-end DTI targets near 45% with AUS allowances to ~50% with compensating factors.
- Homebuyer education: required for many local DPA programs and some KHC-assisted products (HUD-approved counseling accepted).
Down Payment Assistance (DPA) Options (statewide):
KHC Regular DAP (state program): KHC documents a Regular DAP that provides assistance as a subordinate loan to KHC first mortgages. KHC materials (consumer and lender PDFs) list assistance up to $12,500 (in $100 increments) with example repayment terms shown as a 15-year amortization at about 4.75%. Purchase-price caps vary by program grid (examples published by KHC show purchase-price limits around $544k–$566k depending on the KHC document). Apply through a KHC-approved lender. See KHC DAP page: KHC DPA details and lender materials: KHC DAP programs grid (lender PDF).
Kentucky Heroes & targeted benefits:
KHC and local partners commonly offer enhanced DPA or fee/rate incentives for teachers, first responders, veterans, healthcare workers, and other public servants — amounts and availability change by cycle and lender partner.
Local Programs (examples and where to verify):
City and county programs are funded locally and open/close based on appropriations — verify availability before writing an offer.
Louisville / Jefferson County
Louisville Metro Down Payment Assistance: Louisville’s official program provides DPA for low-to-moderate income buyers. City guidance currently caps assistance at up to 15% LTV with a maximum loan of $25,000 and requires HUD-approved counseling. Check the Metro Office of Housing for current availability and stacking rules: louisvilleky.gov — Down Payment Assistance.
Delta Home (Healthy Start): A targeted forgivable assistance stream (Delta Dental partnership) offers forgivable grants for eligible Healthy Start households — city materials list awards up to $25,000 for qualifying families and purchase-price caps for the stream; see the city page for specifics: Delta Home.
Lexington / Fayette County
REACH (REACH HOME): Lexington-area REACH operates locally administered programs (often HOME-funded). REACH’s published materials list second-mortgage assistance caps by household size (examples on REACH’s site show up to about $20,000 for a 1-person household, $25,000 for 2-person, and $30,000 for 3+; confirm current amounts and application windows): reachky.org — REACH HOME.
Northern Kentucky (Boone / Kenton / Campbell)
Northern Kentucky HOME Consortium: HOME-funded homebuyer assistance administered through consortium cities (managed through Covington for PY 2025–26) typically offers 0% deferred/forgivable second mortgages for qualifying buyers. Official NKY HOME guidelines published by Covington list assistance up to $10,000 with a 10-year forgiveness schedule (forgiveness pro‑rata over 10 years). See: NKY HOME Consortium — Homebuyer Assistance Guidelines (Covington).
Additional federal options:
- USDA Rural Development: 0% down financing is available for eligible rural properties under the SFH Guaranteed program — property-level eligibility and income caps apply. See USDA RD fact sheet: USDA SFH Guaranteed fact sheet.
- VA Loans: Eligible veterans/active-duty buyers can access zero-down VA financing through VA-approved lenders.
- FHA Loans: Minimum down payment is typically 3.5% for applicants with credit scores ≥580 (lender overlays may apply). Confirm county loan limits and FHA policy on HUD’s site: HUD FHA info & loan limits.
For stacking and buyability: KHC DAP normally requires a KHC first mortgage and must be originated by an approved lender. Local trust funds and HOME dollars can sometimes stack with KHC DAP; stacking rules and recapture/forgiveness schedules are program-specific — verify with each administrator before relying on layered funds. Find lenders and full program matrices at kyhousing.org.
Program details, income limits, interest rates, and availability may change. Work with a KHC-approved lender early to confirm eligibility, exact limits, and current funding windows.
Seeking Agents® connects buyers with Kentucky agents familiar with KHC and local DPA stacks — free for buyers and sellers.
Frequently Asked Questions
What home buyer assistance is available in Kentucky?
Kentucky first-time buyers may qualify for statewide programs, local assistance opportunities, and federal mortgage products such as FHA, VA, and USDA loans. Eligibility depends on the program, location, and borrower income.
Do you have to be a first-time buyer to qualify in Kentucky?
Not always. While many Kentucky programs are aimed at first-time buyers, some may include exceptions or allow repeat buyers depending on the property location or borrower circumstances.
How much down payment help is available in Kentucky?
Kentucky assistance can help with some or all of a buyer’s upfront costs depending on the program. Support may come as a grant, a second mortgage, or another form of repayable or forgivable assistance.
Do Kentucky programs require homebuyer education classes?
Many Kentucky buyer assistance programs require homebuyer education before closing. This is a common step that helps borrowers understand financing, affordability, and the ownership process.
Should Kentucky buyers work with an agent familiar with assistance programs?
Yes. An agent who understands Kentucky first-time buyer programs can help you avoid financing problems, identify suitable homes, and better manage offer timing with lender requirements.