Zero Down Kentucky Mortgages

ZERO DOWN HOME LOANS IN KENTUCKY





There are a few programs that feature zero down payment in Kentucky for Home buyers: USDA and VA. USDA are typically for rural areas, and VA is for military veterans. Lastly Kentucky Housing with the Down Payment Assistance Program of $7,500 and the $5000 Welcome Home Grant.  


I’ve included some info on each for you on your home journey to buy a home in Kentucky!


Kentucky USDA Loans 


USDA loans are backed through the Rural Housing Division of the U.S. Dept. of Agriculture. They are available to millions of eligible primary home buyers with low to moderate incomes or scarce funds for down payments.

Features, benefits and things you need to know:

Zero Down - No down payment is required for Kentucky USDA loans. Thirty-year, fixed-rate loans with no pre-payment penalty are the norm. Rates are very competitive with conventional loans.

Eligible Property - These loans are limited to "rural" areas, though you might be surprised by some of the suburbs of major metropolitan areas that qualify as rural. 

Homes should be modest in size and cost and constructed per local codes and regulations.

Eligible Borrowers - Funds are available for qualified borrowers who earn up to 115% of the area median income.

 Even candidates who have had past credit issues with late pays, bankruptcies or foreclosure may be eligible. Borrower's income must support the proposed payments and meet the program requirements for approval. Primary occupancy is required. This program is not for investment properties.

Benefits - Minimum cash is needed to close. The USDA Guarantee Fee and some eligible closing costs may be financed. Gift money, grant money and seller contributions are allowed.

Kentucky VA Loans

Veteran's Administration or "VA" loans are available for active, non-active and retired Army, Air Force, Marine, Navy, National Guard and Coast Guard vets who meet the established service requirements. 
  • 100% financing/No down payment
  • No monthly mortgage insurance (PMI)
  • Gift funds acceptable for closing costs
  • No cash reserve requirements
  • A variety of terms or loan types available
  • Available for purchase and refinance
  • Reduced costs for disabled veterans
  • Seller can pay for closing costs
  • Seller pays for any required repairs
  • No pre-payment penalty
  • No minimum credit score 2 years removed from bankruptcy or foreclosures 
To determine your ability to participate in this program, just provide your Certificate of Eligibility (COE) or your Discharge/Separation form (DD214). If you do not have your COE, you can request one using form 26-1880.

Kentucky Down Payment Assistance Programs


From first-time buyers to current homeowners, many state, county and local housing agencies offer affordable loan programs with Down Payment Assistance (DPA), subject to availability of funds and credit qualifying. 

Down payment assistance can vary with single products or sometimes can be a combination of products such as Mortgage Credit Certificates (MCC), Grants, DPA’s along with closing cost assistance and low interest rates and fees that can help individuals and families become successful homeowners.

All borrowers must qualify for an underlying mortgage product according to the Housing Finance Agency authority (FHA, VA, USDA or Conventional). Housing loan programs are then layered on top to provide additional benefits. If eligible, the borrower can also add a down payment and closing cost assistance to their loan according to individual program guidelines.

What state are you in? I assume Kentucky. I will help you gather more information if this is something you want to look into. The general terms are below:

KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your need.







ATTENTION: KHC has announced changes to the Down Payment Assistance Programs! This is great news for buyers in Kentucky!

1. KHC is increasing the down payment assistance program amount from $6,000 to $7,500. This is for both Regular Down Payment and for Affordable Down Payment assistance programs
2. The interest rate on the repayment of the down payment assistance will go from 5.5% to 3.75%. (Affordable Down Payment assistance will remain at 1%)
Realtors: We are here to help you and your clients take advantage of these great opportunities.
Buyers: We are here to answer questions you have regarding this program and qualification requirements.

KHC is used for mostly applicants in Kentucky that don’t have access to money for a down payment on their home.

Regular DAP

  • Purchase price up to $346,644 with Secondary Market.
  • Assistance in the form of a loan up to $7,500 in $100 increments.
  • Repayable over a 10-year term at 3.75 percent.
  • Available to all KHC first-mortgage loan recipients.

Affordable DAP

  • Purchase price up to $346,644​ with Secondary Market.
  • Assistance up to $7,500.
  • Repayable over a 10-year term at 1.00 percent.
  • Borrowers must meet Affordable D​AP income limits.

SeCONDARY MARKET FUNDING SOURCE

  • First-time and repeat homebuyers statewide
  • 30-year fixed interest rate
  • Principal residence ONLY
  • Purchase Price Limit:  $346,644
  • Borrower must meet KHC’s Secondary Market Income Limits
Conventional Preferred Program
Conventional Preferred Plus 80
FHA
VA
RH​​S

KENTUCKY HOUSING CORPORATION
2021 SECONDARY MARKET
GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS
Effective May 1, 2021

Secondary Market Purchase Price Limit — $346,644

KENTUCKY HOUSING CORPORATION 2022 SECONDARY MARKET GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS
KENTUCKY HOUSING CORPORATION 2022 SECONDARY MARKET GROSS ANNUAL APPLICANT’S INCOME LIMITATIONS


Kentucky Welcome Home Grant $5,000

Eligibility Requirements

Homebuyer Eligibility

• Total household income must be at or below 80% of MRB income limits
• Homebuyers must contribute at least $500 of their own funds toward down payment and closing costs (60% of these
  funds may be received as a gift).
• Applicants do not have to be first-time homebuyers. However, all first-time homebuyers must complete a homebuyer
  counseling program.

Eligible Property

• Any one to four-unit property to be used as the homebuyer's residence is eligible
• Funds must be subject to a legally enforceable restriction in the warranty deed
• Only in transactions which convey full title
• May be used for new home construction

Eligible Uses of Funds

• Funds may be used to fund reasonable down payment and closing costs
• May not exceed $5,000 per homebuyer
• May be used in conjunction with other local, state, and federal funding sources
• May be used to pay for the reasonable costs of counseling
• Is not intended for any purchases requiring any significant repair or rehabilitation

Ineligible Uses of Funds

• May not be used for any loan with co-borrowers or co-signors unless they will occupy the home as their primary
  residence and their incomes are included in determining eligibility
• May not be used for any loan with collateral other than the subject property
• May not be used in transactions involving a second mortgage provided by an individual seller

Retention Requirements

All properties purchased using Welcome Home grants shall be subject to a retention period of five years

Items Included in Household Income

• Full number of wages and salaries
• Net income from operation of a business or profession
• Interest, dividends, and other net income
• Periodic amounts
• Payments in lieu of earnings
• Welfare Assistance
• Periodic and determinable allowances
• All regular pay, special pay, and allowances of a member of the Armed Forces

For More information, please visit the Federal Home Loan Bank of Cincinnati website at www.fhlbcin.com.

Kentucky First time home buyers can do a conventional loan with just 3% down.  If you are not a first-time home buyer, you still may be able to qualify for the 3% down if you are within income limits for the area you are purchasing. 620 minimum credit score required.

The Kentucky USDA loan is a program designed to finance properties located in rural areas. One of the goals with this United States Department of Agriculture program is to secure a home loan in areas where conventional loans might not approve the area simply due to a lack of comparable sales in the area. Every 10 years the United States performs its census, these areas are identified by the USDA. This is a zero-down program. The last census was taken in 2010, more than eight years ago so many areas that were deemed rural in 2010 still qualify even though the area where the property is located looks anything but a rural setting. Household income is limited to 115% of the median income for the area. 581 Minimum Credit Score Required.

Kentucky VA loans are the most common of zero down programs and are not restricted by location. They are however restricted to veterans, active-duty personnel with at least 181 days of service, National Guard and Armed Forces Reserve members with at least six years of service and unmarried surviving spouses of those who died while serving or as a result of a service-related injury. In addition, this program requires no monthly mortgage insurance payment like other government-backed loans do. No minimum credit score required.


I hope this gives you some useful input to help guide your decision making. Give me a call if you have more specific questions! Thanks so much 😊

Joel Lobb (NMLS#57916)
Senior  Loan Officer
 
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#57916http://www.nmlsconsumeraccess.org/

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.


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