Down Payment Assistance Kentucky 2026 Kentucky Housing Corporation KHC $12,500

Last updated for 2026. Kentucky Housing Corporation down payment assistance guidelines, loan limits, and eligibility details below reflect current 2026 program rules and availability.

Down Payment Assistance Kentucky 2026 – KHC $12,500 Program Explained

Saving for a down payment remains one of the biggest obstacles to homeownership in Kentucky. In 2026, the Kentucky Housing Corporation (KHC) continues to offer one of the strongest statewide down payment assistance programs available, providing eligible buyers with up to $12,500 toward their down payment and closing costs when paired with a qualifying mortgage.

This program is not a free grant. It is a structured second mortgage designed to reduce the amount of cash buyers need upfront while keeping payments predictable and manageable.

Why Kentucky Down Payment Assistance Matters in 2026

With home prices rising across Louisville, Lexington, Bowling Green, and surrounding counties, even a low down payment can be difficult to save. KHC down payment assistance allows qualified buyers to move forward with as little money out of pocket while maintaining long-term affordability.

This program is especially helpful for first-time homebuyers, relocating families, and buyers who qualify on income but prefer not to drain savings at closing.

Kentucky Housing Corporation Down Payment Assistance – 2026 Details

• Maximum assistance amount: up to $12,500
• Program structure: repayable second mortgage
• Typical repayment term: 15 years, fixed rate
• Use of funds: down payment and eligible closing costs only
• Occupancy: primary residence required

The assistance must be paired with a KHC-approved first mortgage and cannot be used for home repairs or renovations.

Mortgage Programs That Work With KHC Assistance

KHC down payment assistance works in combination with several mortgage programs commonly used by Kentucky buyers:

• Kentucky FHA loans – Popular with first-time homebuyers in Louisville and across Kentucky due to flexible credit guidelines and low down payment requirements.
• Kentucky USDA Rural Housing loans – Offers 100 percent financing in eligible rural and suburban areas throughout the Commonwealth.
• Kentucky VA home loans – Zero down financing for eligible veterans and active-duty service members statewide.

Choosing the right first mortgage is critical. Each program has different income limits, credit standards, and property requirements.

How the KHC Down Payment Assistance Process Works

1. Get pre-approved with a KHC-approved lender
2. Confirm income and purchase price limits for your county
3. Sign a purchase contract and reserve assistance funds
4. Close with reduced cash needed at closing

The second mortgage is disclosed upfront and repaid over time alongside your primary mortgage.

Frequently Asked Questions

Is Kentucky down payment assistance free in 2026?

No. KHC down payment assistance is a repayable second mortgage, not a forgivable grant.

Can this be used anywhere in Kentucky?

Yes. The program is available statewide, including Louisville, Lexington, Northern Kentucky, and rural counties, as long as income and purchase price limits are met.

Can KHC assistance be used with USDA or VA loans?

Yes. FHA, USDA, VA, and KHC conventional mortgages can be paired with KHC down payment assistance when guidelines are met.

Can the funds be used for repairs?

No. KHC funds may only be used for down payment and eligible closing costs.

Buying a Home in Kentucky in 2026?

You may qualify for up to $12,500 in Kentucky Housing Corporation down payment assistance when paired with FHA, VA, USDA, or KHC conventional financing.

📞 Call or Text: 502-905-3708
📧 Email: kentuckyloan@gmail.com
🌐 www.mylouisvillekentuckymortgage.com

Joel Lobb
Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA
Company NMLS #1738461 | NMLS #57916