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Kentucky First-Time Home Buyer Programs of 2019

June 28, 2019
Finding the Right Mortgage, Mortgages
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Doing something important for the first time is often scary, especially if you’ve dreamed about it for years. Buying a first home is no exception.

But a variety of help is out there to make the process easier. The Kentucky Housing Corporation, or KHC, offers programs to help repeat and first-time home buyers get a mortgage.

National loan programs with lower down payment or credit score requirements can also open up a path to homeownership. Check out the possibilities below to find an option that fits your needs.

National first-time home buyer programs

Many lenders participate in national programs that can help first-time buyers get a home loan. You may qualify for one of these mortgages even if you have less-than-perfect credit or little cash for a down payment.

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

Best for

Low credit score

Low down payment

What you need to know

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit

Kentucky Housing highlights and eligibility requirements

The Kentucky Housing Corporation offers conventional, FHA, VA and USDA mortgages to home buyers through a network of approved lenders. It also offers FHA refinance loans. The corporation’s financial assistance and tax credit programs can be combined with any of these loans to make buying a home more affordable. You’re considered a first-time buyer in Kentucky if you haven’t owned a home in the past three years.

» MORE: Tips for first-time home buyers

Highlights

  • 30-year fixed-rate mortgages available.
  • Down payment and closing cost assistance available.
  • Federal income tax credit available to reduce annual mortgage interest.

Eligibility

  • Can be a first-time or repeat home buyer for most programs.
  • Must have a minimum credit score of 620.
  • Must meet county income limits and statewide purchase price limits.
  • Must work with a lender approved by the Kentucky Housing Corporation.
  • Property can be a detached, single-family home, condominium, town house or manufactured home; your lender will have more information on specific requirements.

Compare KHC lenders













Min. credit score

Conventional, VA:
620

FHA: 580





Min. down payment

3.5%





Loan Types

Purchase, refinance, jumbo, fixed, ARM, FHA, VA, and USDA



Min. credit score

Conventional:
620

FHA, VA: 580





Min. down payment

3.0%





Loan Types

Purchase, refinance, jumbo, fixed, ARM, FHA, VA, and USDA



Min. credit score

Conventional:
620

FHA, VA: 580





Min. down payment

3.0%





Loan Types

Purchase, refinance, jumbo, fixed, ARM, FHA, VA, and USDA



» MORE: See other top KHC lenders

Kentucky Housing first-time home buyer loan programs

Conventional Preferred Risk Program

State program

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Best for

Low down payment

What you need to know

Like other conventional loans, this program requires a minimum 3% down payment. But it makes the loan more affordable by eliminating the requirement for private mortgage insurance, which is usually mandatory when the down payment is less than 20% of the loan amount. The program has no minimum

 

Conventional Preferred Program

State program

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Best for

Low down payment

What you need to know

This loan program requires a minimum 3% down payment like other conventional mortgages, but it does not require the borrower to contribute a minimum amount toward the purchase or keep a certain amount of money in reserve. Monthly mortgage insurance is required. Other KHC down payment assistance

 

Home Buyer Tax Credit

State program

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Best for

Tax credits

What you need to know

After you buy a home, a portion of every mortgage payment goes toward interest on the loan. The Kentucky Home Buyer Tax Credit reimburses up to 25% of the annual mortgage interest you pay during the calendar year, with a maximum credit of $2,000 per year.

 

Hardest Hit Fund Down Payment Assistance Program

State program

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Best for

Down payment assistance

Closing cost assistance

What you need to know

Available only to first-time buyers of homes in Christian County, this program provides up to $10,000 for down payment and closing cost assistance. The help is in the form of a no-interest loan that is forgiven after five years. Applicants must go through home buyer counseling before buying the home

 

Regular Down Payment Assistance Program

State program

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Best for

Down payment assistance

Closing cost assistance

What you need to know

This program is available to any recipient of a Kentucky Housing Corporation conventional, FHA, USDA or VA first mortgage. The help is in the form up of a loan of up to $6,000 at a 5.5% interest rate. The buyer repays the loan over 10 years.

 

Affordable Down Payment Assistance Program

State program

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Best for

Down payment assistance

Closing cost assistance

What you need to know

Borrowers who meet certain income limits can get up to $6,000 in down payment and closing cost assistance. The help is in the form of a 10-year loan with a 1% interest rate. This program can be used with any Kentucky Housing Corporation conventional, FHA, USDA or VA first mortgage.

Summary: 2019 KHC first-time home buyer programs

  • Conventional Preferred Risk Program for a down payment of just 3% without mandatory mortgage insurance.
  • Conventional Preferred Program for no required borrower contribution or minimum cash reserves.
  • Home Buyer Tax Credit for up to 25% reimbursement of annual mortgage interest payments.
  • Hardest Hit Fund Down Payment Assistance Program for first-time home buyers in Christian County.
  • Regular Down Payment Assistance Program for a down payment loan of up to $6,000.
  • Affordable Down Payment Assistance Program for a down payment loan of up to $6,000 for low-income borrowers.

Knowing about national and Kentucky state loan programs to help buy a home is a good start; now it’s time to dig into the details.

For specifics, visit the Kentucky Housing Corporation website. There you’ll find information about all the loan programs, including eligibility requirements, how to enroll in home buyer counseling and a list of approved lenders in your county.

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