Kentucky Housing $12,500 Down Payment Assistance Help for Homebuyers
If you're a first-time homebuyer in Kentucky, the Kentucky Housing Corporation (KHC) offers great options. They help make your dream of homeownership a reality. You can even buy your next home with no money down.
The KHC Down Payment Assistance (DPA) program can provide up to $12,500. This assistance helps with your down payment. It also covers closing costs and prepaid items. Here's everything you need to know to qualify and take advantage of these opportunities:
Kentucky Housing Corporation (KHC) understands that saving for a down payment, covering closing costs, and paying prepaid expenses can be major hurdles for homebuyers. To make the path to homeownership more achievable, KHC is offering $12,500 a special Down Payment Assistance Program (DAP) that helps cover these upfront costs for a limited time see details below:
Regular DAP Program Details
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Purchase price limit: Up to $544,232 (subject to Secondary Market or Mortgage Revenue Bond [MRB] income limits).
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Assistance amount: Up to $12,500 (available in $100 increments).
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Loan terms: Repayable over 15 years at a fixed 4.75% interest rate.
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Eligibility: Available to all KHC first-mortgage loan recipients.
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Temporary increase: The standard $10,000 assistance has been boosted to $12,500 for loans reserved through November 30, 2025.
Additional Notes
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No liquid asset review required and no cap on borrower reserves.
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Specific credit underwriting standards may apply to down payment programs.
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Works in combination with FHA, VA, USDA, and Conventional KHC-approved loans.
Why This Matters
This increase gives homebuyers more flexibility to cover upfront expenses, making it easier to move forward with a purchase in today’s higher-rate, higher-price market.
If you’re considering buying a home, now is the time to take advantage of the extra $2,500 in temporary assistance before it expires.
Who Qualifies for Kentucky's $12,500 Assistance?
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Am I Eligible for the $12,500 Kentucky Down Payment Assistance?
Qualifying for this program is straightforward, but you must work with a KHC-approved lender to confirm your eligibility.
Eligibility Requirements
To qualify for the DAP program, you must:
Use a KHC First Mortgage: You must be approved for your primary home loan through one of KHC's first-mortgage programs (like your standard FHA, VA, or USDA loan through KHC).
Meet Income Limits: Your household income must fall within KHC's Secondary Market or Mortgage Revenue Bond (MRB) limits. These limits vary by county and household size.
Meet Purchase Price Limits: The sales price of the home you wish to buy cannot exceed $544,232.
Major Benefits: Why This Program is So Popular
Effectively $0 Down: By covering your down payment and closing costs, this program can create a true no-money-down scenario for eligible buyers.
No Asset Limits: KHC does NOT review your liquid assets (savings, checking accounts) or place a limit on how much money you can have in reserves after closing. This is a huge advantage over other programs.
Available to All: The DAP program is available to all recipients of a KHC first-mortgage loan who meet the income and price limits.
Effectively $0 Down: By covering your down payment and closing costs, this program can create a true no-money-down scenario for eligible buyers.
No Asset Limits: KHC does NOT review your liquid assets (savings, checking accounts) or place a limit on how much money you can have in reserves after closing. This is a huge advantage over other programs.
Available to All: The DAP program is available to all recipients of a KHC first-mortgage loan who meet the income and price limits.
How Does the KHC DAP Loan Work
It's important to understand that this is a loan, not free money. Here’s how it functions:
You apply for your main mortgage through a KHC-approved lender.
If you qualify, you can also apply for the DAP loan of up to $12,500.
At closing, the DAP loan funds are used to pay your required down payment and other closing costs.
You will then have two loans:
Your primary 30-year mortgage (e.g., FHA loan at 6.5%).
Your secondary 15-year DAP loan for $12,500 at 4.75%.
You will make a separate, monthly payment on the DAP loan for 15 years, after which it will be paid in full.
How to Apply: Your Next Steps to $12,500
You cannot apply for this program directly through KHC. You must work with a participating KHC-approved Kentucky down payment assistance lender.
Ready to stop renting and see if you qualify for $12,500?
The clock is ticking on this increased amount! Connect with a top-rated KHC-approved lender today for a free eligibility check and personalized quote. They can answer all your questions and guide you through the entire process before the November 30, 2025 deadline.
Frequently Asked Questions (FAQ)
Q: Is the $12,500 a grant or a loan?
A: It is a loan that must be repaid over 15 years at a 4.75% fixed interest rate.
Q: What can the DAP funds be used for?
A: The funds are used to cover your down payment, closing costs (like appraisal, title insurance, origination fees), and prepaid expenses (like homeowner's insurance and property taxes).
Q: What are the credit score requirements?
A: Credit requirements are set by the specific KHC first-mortgage program you use (FHA, VA, etc.) and the lender's own underwriting. Your lender will advise you on the specific credit standards for the down payment assistance program.
Q: Can I use this on any home in Kentucky?
A: The home must be located in Kentucky and the purchase price must be at or below $544,232. It must also be your primary residence.
Learn More at the Links below
Disclaimer: This information is for informational purposes only and is subject to change. Program details, rates, and limits are determined by the Kentucky Housing Corporation and individual lenders. All applicants must qualify based on KHC and lender underwriting guidelines.
Home Buyer Eligibility:
- First-Time and Repeat Buyers: KHC helps both first-time and repeat home buyers throughout Kentucky.
- U.S. Citizenship: You must be a U.S. citizen or have legal status to live in the U.S.
- Income: Only income through the Secondary Market is considered for eligibility.
- Principal Residence: The property must be your principal residence. You cannot own any other residential property at the time of closing.
- Closing Assistance: Borrowers can qualify for the KHC Down Payment Assistance Program. They must meet both the income and purchase price limits.
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Kentucky Housing Credit Standards:
To qualify for a KHC loan, there are specific credit and financial criteria:
- Credit Score: A minimum credit score of 620 is required for FHA, VA, and RHS loans, and a 660 minimum score is needed for Conventional loans.
- Debt Ratio: The maximum allowable debt ratio is 50%.
- Collections: In most cases, collections do not need to be paid off in full.
- Bankruptcies and Foreclosures: These must be discharged for at least two to seven years.
- Non-Taxable Income: Non-taxable income can be grossed up to help you meet the income requirements.
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Property Eligibility:
- New and Existing Properties: Both new and existing properties are eligible for KHC loans.
- Manufactured Housing: Both new and existing manufactured homes are eligible, with the caveat that RHS loans only cover new construction manufactured housing.
- Purchase Price Limit: The purchase price limit is set at $544,222 for both Secondary Market and MRB Loans.
- Appraisal and Inspections: A full appraisal is required for all KHC loans. Additionally, VA loans are the only loan product requiring a termite inspection, and a termite soil treatment certificate is required for all new construction properties except for conventional loans.
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What You Can Use the KHC Down Payment Assistance For:
- Down Payment: You can use the assistance to help cover your down payment when buying a home.
- Closing Costs: The program also helps pay for closing costs, which can be one of the most challenging parts of buying a home.
- Prepaid Items: KHC DPA can help with prepaids such as homeowner’s insurance or property taxes that may be due at closing.
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Start Your Home Buying Journey Today!
If you're interested in using the KHC Down Payment Assistance Program for 2025, connect with a qualified lender. There are several benefits to using this program. These benefits include no money down options. There is assistance available for both new and repeat buyers. Don't let down payment challenges hold you back. Reach out today to get started on your path to homeownership with the support of the KHC.
Email - kentuckyloan@gmail.com 
Call/Text - 502-905-3708Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans
Website: www.mylouisvillekentuckymortgage.com
Address: 911 Barret Ave., Louisville, KY 40204
Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916
For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.
Email -
Call/Text - 
Website: 
Address: 911 Barret Ave., Louisville, KY 40204
First-Time Home Buyers Welcome
