What Is the Louisville Metro Down Payment Assistance Program?

Louisville, KY Homebuyer Guide
Louisville $25,000 Down Payment Assistance Program (2025–2026)
Updated from Louisville Metro Office of Housing & Community Development Homebuyer Handbook (January 2026)
If you’re searching for the Louisville $25,000 down payment assistance program, this guide breaks down how it works, who qualifies, and how to apply in Jefferson County, KY.
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Call/Text: 502-905-3708
Email: kentuckyloan@gmail.com
Joel Lobb — Mortgage Broker FHA, VA, KHC, USDA

What this program is (and what it isn’t)

Louisville Metro’s Down Payment Assistance Program can provide up to $25,000 for eligible Jefferson County homebuyers. Many people call it a “grant,” but the program is structured as a 0% interest second mortgage with no monthly payment. A portion may be forgiven after the affordability period, and any remaining balance is typically repaid from net proceeds if you sell.

How much you can get

  • Maximum assistance: $25,000
  • Also limited to 15% of the purchase price
  • Used toward down payment and/or eligible closing costs
  • No cash back allowed at closing

0% second mortgage + forgiveness explained

  • No interest accrues
  • No monthly payment on the DPA second mortgage
  • Forgiveness depends on the affordability period (5–10 years depending on assistance amount)
  • If you sell before the required period ends, repayment is generally due from net proceeds

Income limits (80% AMI – 2025)

Household gross income must be at or below 80% AMI based on household size.

Household size Max income
1$54,150
2$61,850
3$69,600
4$77,300
5$83,500
6$89,700
7$95,900
8$102,050

Credit requirements (common deal-killers)

  • No unpaid collections or charge-offs
  • No open/undischarged bankruptcy
  • Bankruptcy must be discharged at least 1 year before applying
  • Medical collections may be allowed up to stated limits (program specific)

Eligible homes and purchase price limits

  • Eligible homes generally include single-family, condos, co-ops, and certain modular homes on permanent foundations
  • Property must pass required inspections and environmental review
Purchase price caps
  • Existing 1-unit: $235,000
  • Existing 2-unit: $301,000
  • New construction 1-unit: $331,000
  • New construction 2-unit: $423,000

How to apply (step-by-step)

  1. Complete HUD-approved homebuyer counseling (minimum 6 hours)
  2. Get mortgage pre-approval
  3. Submit a complete Metro DPA application (incomplete files do not move)
  4. Receive eligibility determination
  5. Go under contract with enough time for Metro processing
  6. Submit contract + lender packet + inspection docs as required
  7. Metro review + approval process
  8. Pass inspection/environmental review
  9. Close and fund

Can you combine this with FHA, VA, USDA, or KHC?

In many cases, yes — but it must be structured correctly from the start so the first mortgage guidelines and Metro DPA rules do not conflict. This is where most buyers lose time, extensions, or the deal entirely.

FAQ: Louisville $25,000 down payment assistance

Is this a $25,000 grant?
Many people call it a grant, but the program is typically structured as a 0% interest second mortgage. A portion may be forgiven after the affordability period, and the remaining balance is usually repaid from net proceeds if you sell.
How long does the process take?
Plan for counseling + application + eligibility processing time, then additional Metro processing after you go under contract. Your contract should allow enough time to avoid last-minute extensions.
Can I combine it with FHA, VA, USDA, or KHC?
Often yes, but the loan must be structured so first mortgage rules and Metro DPA rules align. This is a file-structure issue, not a “maybe” issue.
What are the most common reasons people get denied?
Income over the limit, unresolved collections/charge-offs, insufficient bank funds, incomplete documents, and contract timelines that don’t allow Metro processing.
What should I do first?
Start counseling, get pre-approved, and confirm you meet the income/credit/bank-funds requirements before you write an offer.

Contact and official links

Talk to Joel
Licensing Information: Joel Lobb is licensed in Kentucky only. NMLS Personal ID: #57916 | Company NMLS ID: #1738461 | www.nmlsconsumeraccess.org
Disclaimer: Educational content only. Not affiliated with Louisville Metro Government, FHA, VA, USDA, Kentucky Housing Corporation, or any government agency. Not a commitment to lend. All approvals subject to underwriting and program requirements. Program guidelines and funding availability can change.
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