Wednesday, July 27, 2011

Kentucky First Time Home Buyer Programs (KY)

Kentucky First Time Home Buyer Programs (KY)

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Kentucky First Time Home Buyer Programs

First time home buyers all across the country are enjoying a buyer’s market right now, with more than enough stock and sellers willing to deal. In Kentucky, just as in many other states, these first time home buyers are often challenged to come up with the cash for down payment and closing costs. Thankfully, there are a number of first time home buyer programs designed to help Kentucky home buyers who find themselves in such a dilemma. Some of these programs are financed by federal funds and others by state funds. Below is a partial list along with some details.

Kentucky Housing Corporation

The Kentucky Housing Corp. is a public corporation operating under the state's Finance and Administration Cabinet. It was established in 1972 to help ensure affordable housing among all of Kentucky's residents. To date the corporation has aided more than 27,000 low income Kentuckians as well as 82,000 others in their search for affordable housing. Aid comes in the form of closing costs and down payment assistance programs, low-cost mortgages, and other grants from time to time. For first time home buyers the state currently has two programs to help with down payment assistance.

Regular Down Payment Assistance Program (DAP)

Kentucky's Regular Down Payment Assistance Program is the standard program used in most circumstances. It provides a low-cost loan of up to $6000 which can be used to pay down payment or closing costs. The loan is paid in $100 increments and is charged interest at 6% over the first ten years of your mortgage. At the conclusion of the seventh year the loan will be paid off and that amount deducted from your monthly mortgage payment. This DAP program is open only to first time home buyers in Kentucky, purchasing houses valued at up to $243,000. In some targeted counties the program is open to second time home buyers as well.


The HOME DAP program is a down payment assistance program geared directly at low income individuals. Where the Regular state program requires repayment of the funds over the first seven years of a mortgage, the HOME program requires no monthly repayment and is forgiven within five years. This program provides financial assistance of up to $6000 on homes valued at $197,000 or less. It can only be used on existing homes and there are strict income requirements depending on the size of the family.

The HOME DAP program is subdivided into three categories, each with its own requirements. The first is the general program just discussed which is open to all low income, first time Kentucky home buyers. The second is the Special HOME DAP which provides the same amount of funding and terms, but is geared to households where at least one resident is 62 years or older, or where one resident is on permanent disability. Meanwhile, the HOME Family program also has the same funding amounts and terms but is geared toward single or two-parent homes with at least one dependent 18 years or younger, and who have not had an ownership interest in an other home within the previous three years.

Low Interest Loans

The Kentucky Housing Corp. offers nearly half a dozen loan programs which first-time home buyers are eligible for. They provide conventional, FHA, VA, and RHS loans as well as federal Mortgage Credit Certificates (MCC). But their Special First Mortgage Loan program is a somewhat unique one when compared to what other states offer. This program offers assistance to single-parent, disabled, or elderly households whose first time home buying experience involves building a brand-new home. There are certain income and eligibility requirements, and funds are limited, so interested consumers are urged to apply as soon as funds are available in July.

Other Home Buyer Programs in Kentucky

From time to time Kentucky residents may find other programs available in the state through federal HUD grants, state grants, county or municipal programs, or nonprofit organization programs. Below is a partial list of programs currently registered as active in the state. This list was taken directly from the HUD website and may or may not be accurate at any time in the future:

•Covington Homebuyer Assistance Program (HAP)

•Fayette County Local Development Corporation First Time Homeowners Assistance Program (FTHAP)

•Jefferson County Home Ownership Assistance Program (HOAP)

•Louisville New Construction Home Ownership Program

•Multi Counties REACH Inc First Key Down Payment Assistance Program (DAP)

•Multi Counties- The Center For Women and Families, Inc. Common Wealth Individual Development Account Program (CWIDA)

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