Those looking to buy real estate might consider Kentucky, one of the best states for low mortgage debt and low housing costs! Potential home buyers might also find further help from local and national programs that exist to offer down payment assistance and grants to qualified applicants. The Department of Development, the Kentucky Housing Corporation, and the Kentucky Association of Counties are some organizations that offer such programs.
If you're thinking about purchasing a home in Kentucky, you may have options to help with the down payment or closing costs. Read below to learn more about any program and see if it can help with your home purchase!
Those in Covington, Kentucky who are eligible can access as much as $5,000 in down payment assistance funds. This is a 0% interest loan with deferred payment that can be forgiven.
In order for the amount to be forgiven, the applicant must use the property as their primary residence for a minimum of 5 years. In the event that the house is no longer the primary residence within 5 years, the loan must be paid off.
The Covington Homebuyer Assistance Program is funded by the Department of Development’s HOME program.
All borrowers have to undergo homebuyer education and submit a certificate of completion. Borrowers also have to fall within the below annual household income limits as of 2022:
- 1 person household: $47,850
- 2 person household: $54,650
- 3 person household: $61,500
- 4 person household: $68,300
- 5 person household: $73,800
- 6 person household: $79,250
- 7 person household: $84,700
- 8 person household: $90,200
In order to be eligible, a property must owner-occupied or vacant when being purchased, must have one or two units, must meet the minimum required housing standards, and fall within certain purchase price limits.
The Hardest Hit Fund Down Payment Assistance program, or HHF-DPA, is offered by the Kentucky Housing Corporation. As much as $10,000 is offered to borrowers to help cover the costs associated with the down payment. This is a second mortgage with 0% interest and a five-year term that can be forgiven.
To receive this assistance, applicants must not have owned a home in the previous three years, provide their last three years of tax returns or tax transcripts, complete homebuyer education, and meet specified purchase price and income limits.
In order for the property to be eligible, it cannot be a new construction, and it must be located within Christian, Hardin, Jefferson, or Kenton County.
This Down Payment Assistance Program is offered to those in Louisville by the Department of Housing and Community Development.
Assistance is offered in the form of a loan.
In order to be considered for this program, and applicant must fall within the below total household annual income limits as of 2022:
- 1 person household: $43,050
- 2 person household: $49,200
- 3 person household: $55,350
- 4 person household: $61,500
- 5 person household: $66,450
- 6 person household: $71,350
Applicants also must be approved for a mortgage and be creditworthy.
Applicants cannot have more than $15,000 in liquid assets.
Finally, applicants must complete homebuyer education.
Depending on the amount of the loan, the property must be the borrower’s primary residence for between 5 and 15 years. Only vacant or abandoned homes can be purchased with this program.
This initiative, offered by the Kentucky Association of Counties, allows eligible applicants to receive a grant to help pay for a reduction of the principal mortgage amount, the down payment, or closing costs.
As much as 5% of the loan amount is offered. This grant works in combination with a mortgage.
In order to be applicable, individuals must have a credit score no lower than 640, fall within an income limit of 115% of the area median income, and meet credit and federal standards.
This program is available anywhere in Kentucky state. However, the lender must be a participating partner of the program.