Kentucky Housing Corporation (KHC) Income & Purchase Price Limits for 2026
Last updated: February 2026 | By Joel Lobb, Mortgage Loan Officer (NMLS #57916)
- KHC Maximum Purchase Price: $544,232 (effective June 23, 2025)
- KHC Down Payment Assistance (DAP): Up to $12,500
- Minimum Credit Score: 620 for all KHC-backed programs
- Maximum Debt-to-Income Ratio: 50% (with AUS approval)
- Front-End Ratio Cap: Eliminated as of June 24, 2024
- 2026 FHA Loan Limit (Kentucky): $541,288
If you are a first-time homebuyer in Kentucky — or even a repeat buyer — one of the most important steps before shopping for a home is understanding the Kentucky Housing Corporation (KHC) income limits and purchase price limits that apply to your county and loan program. These limits determine whether you qualify for KHC's lower interest rates, down payment assistance, and other homebuyer benefits.
This guide has been fully updated for 2026 to reflect the latest KHC guidelines, FHA loan limits, and down payment assistance amounts. Whether you're exploring an FHA, VA, USDA, or conventional loan through KHC's Secondary Market program, read on for everything you need to know.
What Is the Kentucky Housing Corporation (KHC)?
The Kentucky Housing Corporation (KHC) is a self-supporting public agency created by the Kentucky General Assembly in 1972. Its mission is to create affordable housing opportunities for low- and moderate-income Kentuckians. KHC does this by offering below-market interest rate mortgages, down payment assistance, and homebuyer education programs statewide.
KHC loans are available through a network of KHC-approved lenders — including local mortgage brokers like myself — and they can be combined with FHA, VA, USDA, and Fannie Mae (conventional) loan products. This flexibility makes KHC one of the most powerful tools available for Kentucky first-time homebuyers.
2026 KHC Purchase Price & Income Limits
KHC operates two primary loan tracks: the Secondary Market Program (open to first-time and repeat buyers) and the Mortgage Revenue Bond (MRB) Program (generally limited to first-time buyers with stricter income caps). Both have county-specific income limits you must meet.
KHC Secondary Market Program — 2026 Key Numbers
| Requirement | 2026 Limit / Guideline |
|---|---|
| Maximum Purchase Price | $544,232 |
| Minimum Credit Score | 620 |
| Maximum Debt-to-Income (DTI) | 50% (with AUS approval) |
| Front-End Ratio Cap | Eliminated (as of June 24, 2024) |
| Eligible Buyers | First-time and repeat buyers |
| Property Types | Single-family, primary residence |
General Income Limit Ranges (by Program)
While KHC publishes county-by-county tables on their website, the general income limit ranges for Kentucky in 2026 are approximately:
| Program | Approximate Income Limit Range | Who Qualifies |
|---|---|---|
| KHC Secondary Market | $82,000 – $140,000 (varies by county & household size) | First-time & repeat buyers |
| KHC MRB (Mortgage Revenue Bond) | Lower limits — county-specific | First-time buyers only (some exceptions) |
| KHC Down Payment Assistance (DAP) | Must meet KHC first mortgage income limits | All KHC first-mortgage borrowers |
For exact income limits by county, visit KyHousing.org or call/text me at 502-905-3708 for a quick eligibility check.
KHC-Eligible Loan Programs for 2026
KHC works with multiple loan types. Here is a breakdown of each program's key requirements for 2026:
🏠 FHA Loans (Federal Housing Administration)
| FHA Guideline | 2026 Requirement |
|---|---|
| Minimum Credit Score | 620 (KHC overlay; FHA allows lower) |
| Down Payment | 3.5% of purchase price (can be covered by KHC DAP) |
| Maximum Financing | 96.5% of lesser of sales price or appraised value |
| Maximum DTI | 50% (with AUS approval) |
| 2026 FHA Loan Limit (KY) | $541,288 (all 120 Kentucky counties) |
| Upfront MIP (UFMIP) | 1.75% of base loan amount |
| Annual MIP — LTV ≤ 95% | 0.50% annually |
| Annual MIP — LTV > 95% | 0.55% annually |
🌿 USDA / Rural Housing Service (RHS) Loans
| USDA Guideline | 2026 Requirement |
|---|---|
| Minimum Credit Score | 620 (640+ preferred for automated approval) |
| Down Payment | None (100% financing) |
| Maximum Financing | 100% of appraised value + 1.00% guarantee fee |
| Annual Fee | 0.35% of outstanding loan balance |
| Maximum DTI | 50% (with AUS approval) |
| Loan Limit | No fixed limit — based on income & county eligibility |
| Property Location | Must be in a USDA-designated rural or suburban area |
Many areas outside Louisville, Lexington, and Bowling Green still qualify for USDA. "Rural" does not mean farmland — many suburban communities are eligible.
🏆 VA Loans (Veterans Administration)
| VA Guideline | 2026 Requirement |
|---|---|
| Minimum Credit Score | 620 (KHC overlay) |
| Down Payment | None (100% financing for eligible veterans) |
| Maximum Financing | 100% of lesser of appraised value or sale price + VA funding fee |
| Monthly Mortgage Insurance | None |
| Maximum DTI | 50% (with AUS approval) |
| VA Loan Limit | No limit for veterans with full entitlement |
| Who Qualifies | Active-duty, veterans, & eligible surviving spouses |
KHC Down Payment Assistance (DAP) — 2026 Update Up to $12,500
One of the most valuable tools KHC offers is its Down Payment Assistance Program (DAP). This is a second mortgage loan designed to run alongside your KHC first mortgage to help cover your down payment and/or closing costs.
| DAP Feature | 2026 Details |
|---|---|
| Maximum Assistance Amount | Up to $12,500 |
| Minimum Amount | $1,000 |
| Interest Rate | 3.75% fixed |
| Loan Term | 10 years (amortized) |
| Maximum Purchase Price | $544,232 |
| Who Is Eligible | Any KHC first-mortgage borrower who meets income/price limits |
| Can Be Combined With | FHA, VA, USDA, or Conventional KHC loans |
| Required Repairs | Buyer or seller must pay for repairs from own funds (not DAP) |
🎁 Also in 2026: Welcome Home Grant (Up to $20,000)
The Federal Home Loan Bank of Cincinnati Welcome Home Grant program is expected to open in April 2026. This program offers up to $20,000 in forgivable grant money — but it counts all household income (including non-borrowers) and funds are distributed on a first-come, first-served basis until exhausted. It is not available year-round. If you want to be ready when grants open, getting pre-approved now is essential.
Frequently Asked Questions About KHC Income Limits in 2026
Q: Do I have to be a first-time homebuyer to use KHC in 2026?
No — the KHC Secondary Market Program is available to both first-time and repeat buyers, as long as you meet income and purchase price limits. The MRB (Mortgage Revenue Bond) program is generally limited to first-time buyers, though exceptions exist in federally designated "targeted areas" of Kentucky.
Q: What is the KHC income limit for my county in 2026?
KHC income limits vary by county and household size. For example, Jefferson County (Louisville) typically allows borrower income in the $82,000–$140,000 range depending on the program and household size. The fastest way to confirm your county's exact limit is to call or text me at 502-905-3708 — I can check your eligibility in minutes at no cost.
Q: What is the maximum home purchase price for a KHC loan in 2026?
The KHC maximum purchase price is $544,232 (effective June 23, 2025). This applies to both the KHC Secondary Market and the Down Payment Assistance programs.
Q: Can I combine KHC down payment assistance with an FHA loan?
Yes — in fact, combining a KHC first mortgage with an FHA loan and the KHC DAP is one of the most popular strategies for Kentucky first-time buyers. The DAP can cover your 3.5% FHA down payment and even a portion of closing costs, depending on the home's purchase price and your eligibility.
Q: What credit score do I need for a KHC loan?
KHC requires a minimum credit score of 620 for all programs, including FHA, VA, USDA, and conventional loans. Some programs may have slightly different score requirements, and compensating factors can sometimes help borderline files get approved.
Q: Does KHC have a front-end debt ratio limit in 2026?
No — KHC eliminated its 40% front-end ratio requirement effective June 24, 2024. The current maximum DTI is 50% with an Automated Underwriting System (AUS) approval. This change made it easier for many buyers with higher housing costs to qualify.
Q: What is the 2026 FHA loan limit in Kentucky?
The 2026 FHA loan limit for all 120 Kentucky counties is $541,288 for a single-family home — up from $524,225 in 2025. This increase allows buyers to finance higher-priced homes with only 3.5% down through FHA.
Why Work With Joel Lobb for Your KHC Mortgage Loan?
With over 20 years of experience and more than 1,300 Kentucky families helped, I specialize exclusively in Kentucky mortgage loans — including FHA, VA, USDA, KHC, and Fannie Mae programs. I know how to structure your loan to maximize your KHC benefits and minimize your out-of-pocket costs.
- Local KHC Expertise: I know Kentucky's housing market and KHC guidelines inside and out.
- Free Applications & Same-Day Approvals: No cost, no obligation — fast pre-approvals so you can make competitive offers.
- All 120 Kentucky Counties: Whether you're in Louisville, Lexington, Bowling Green, or a rural county — I can help.
- DAP Specialists: I'll help you layer KHC down payment assistance for maximum savings at closing.
- Personalized Service: You'll work directly with me — not a call center.
🏠 Ready to see if you qualify for a KHC loan in 2026?
Get a free, same-day mortgage pre-approval and find out exactly how much KHC down payment assistance you may qualify for.
📧 Email: kentuckyloan@gmail.com
📞 Call/Text: 502-905-3708
Joel Lobb | Mortgage Loan Officer | NMLS #57916 | Company NMLS #1738461
Equal Housing Lender | www.nmlsconsumeraccess.org
Disclaimer: The views and opinions stated on this website belong solely to the author and are intended for informational purposes only. Posted information does not guarantee approval, nor does it constitute full underwriting guidelines. This website is not endorsed by or affiliated with FHA, VA, USDA, KHC, or any government agency. All loan approvals are subject to underwriting guidelines, income and property requirements, and final credit approval. KHC income and purchase price limits are subject to change. Contact a KHC-approved lender to verify current program details. NMLS #57916 | Company NMLS #1738461 | www.nmlsconsumeraccess.org
