Kentucky Down Payment Assistance for Kentucky Home-buyers

A Beginner’s Guide to Kentucky Home Buyer Down Payment Assistance:

What are the  restrictions on Down Payment Assistance Loans in Kentucky 

Here are some common restrictions that might apply:
  • Kentucky First-time buyers only, although this is hardly universal, and the term “first-time” buyer refers to those who haven’t owned a home in the last three years (kind of a misnomer, and in this case it works to your advantage if you have owned a home before)
  • Income restrictions, but the cut-offs are rising---KHC has limits and so does USDA. VA and FHA do not have income limits on how much you can make. 
  • A minimum contribution from you on some programs. Usally the only costs out of pocket for the loan would be appraisal fee. $500 typical costs 
  • Limits on the purchase price, almost always apply with KHC having purchase price limits along with FHA and VA and Fannie Mae. 
  • You will have to live in the home for a certain number of years, or you might have to pay back the loan. 
  • Must be paired with a certain loan product
  • A higher mortgage insurance expense

Low down payment mortgages available in Kentucky

Kentucky FHA loansYou don’t have to be a first-time home buyer in Kentucky , but about half of first-timers rely on Federal Housing Administration mortgages. Because the FHA insures them, lenders can offer better interest rates and more flexible requirements. As long as your credit score is at least 500, with 10% down payment your down payment can be as low as 3.5 percent with a 580 credit score or higher. And there aren’t any income restrictions. For details, check out this article at The Balance. You can find an FHA lender with this search tool.

Fannie Mae’s HomeReady® Mortgage. The HomeReady Mortgage lets first-time and repeat buyers put down as little as 3 percent. When you're ready to start shopping for a mortgage, ask your lender about Home Ready and other affordable financing options for you to consider. 620 minimum credit score required.

Home Buyer Eligibility
• KHC can help both first time and repeat home buyers statewide.
• Must be a U.S. citizen or legal status to be in U.S.
• Applicant’s income ONLY through Secondary Market.
• Property must be the borrower’s principal residence.
• Any Borrower that meets both the income and purchase price limit can have access to Down Payment Assistance.
Kentucky Housing Credit Standards
• 620 minimum credit score required for FHA, VA, & RHS.
• 660 minimum credit score required for Conventional.
• Debt ratios: 40/50%
• Collections in most cases do not need to be paid-off in full.
• Bankruptcies and foreclosures must be discharged two to seven years.
• Non-taxable income can be grossed-up.
Property Eligibility
• Both new and existing property.
• Both new & existing Manufactured Housing.
• With RHS only new construction Manufactured housing is allowed.
• Purchase price limit of $314,827for Secondary Market or $283,344 for Tax Credit.
• Full appraisal required on all KHC loans.
• With Existing Property, VA is the only loan product that requires a termite inspection.
• A termite soil treatment certificate is required on ALL new construction properties except on conventional loans.

Good Neighbor Next Door. This HUD program gives a range of community service professionals a 50 percent discount on certain properties in revitalization areas. The down payment is only $100 if you qualify for any FHA-insured mortgage program. Learn more at the HUD website.

Military and Veterans in Kentucky 

If you’re a veteran, active-duty service member, member of the National Guard and Reserves, or surviving spouse, special Kentucky Home Buying Programs.
Kentucky Veterans Administration loans. By guaranteeing the loan, the US Department of Veterans Affairs might help you buy a home at a competitive interest rate with no down payment and no private mortgage insurance. Learn more at the VA website. No minimum credit score required, but VA lenders will create overlays to usually require a 580 credit score or higher, with most VA mortgage lenders wanting a 620 credit score or higher.

Kentucky USDA Rural Development Loans. Zero down payment? Yes, as in 100 percent financing. The US Department of Agriculture's rural development mortgage guarantee program is so popular that it has been known to run out of money before the end of the fiscal year. It’s intended for first-time buyers, but there are exceptions. Check out the USDA website to see if your blessedly underpopulated area is eligible. Usually like to see a minimum credit score of 620 to 640 with income limits being based on how many people live in the household. 

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916
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