Kentucky First Time Home Buyer Programs For Home Mortgage Loans

Kentucky first-time homebuyer programs

• KHC Regular Down Payment Assistance: Receive a loan of up to $6,000 and repay it over 10 years at a 5.5% interest rate.
• KHC Affordable Down Payment Assistance: If you have a low-to-moderate income, you can get a loan of up to $6,000 and pay it back over 10 years at a 1% rate.
• Conventional Mortgage Loan- 3% down payment credit scores should be at least 680, but preferably 720 or higher with 
• Federal Housing Administration FHA Kentucky mortgage: You can get a down payment of 3.5% with a credit score of at least 580, or get a mortgage with a credit score between 500 and 580 with 10% down using this loan, which is also called an FHA loan. 
• United States Department of Agriculture mortgage Kentucky USDA Mortgage loan: These loans, also called USDA loans, can be useful if you are a low-to-moderate income borrower looking to buy a home in a rural or suburban area.
• Veterans Affairs mortgage Kentucky VA Mortgage : These mortgages, also called VA loans, are for active-service military members or veterans, or spouses of members who have died and can provide lower interest rates than conventional mortgages.

• Am I an active or former member of the armed forces? If not, right away you can remove VA loans from consideration.
• Is my home located in a rural area? People living in more urban and suburban neighborhoods won’t qualify for a USDA loan, so you can scratch that one if that’s the case.
• How much can I afford for a down payment? FHA loans offer plenty of flexibility with their down payment options, but you will need to put up some money up front. That may not be the case with either VA or USDA loans.
• How strong is my credit score? You’ll need a 620 credit score at minimum to qualify for USDA loans. FHA and VA programs tend to be a bit more lenient on credit history.
• Which loan offers the lowest interest rate? All three government loan programs tend to offer lower interest rates than conventional mortgages, but among them, VA might have a slight edge. Mortgage rates constantly fluctuate, no matter what type of home loan you’re considering. So, be sure to take a look at the latest interest rates before making a decision.

Loan types of credit score requirements for First Time Home Buyers in Kentucky

Loans insured by the government, such as VA loans, USDA loans and FHA loans, tend to have more flexible qualification requirements than conventional mortgage loans, which are not government-backed.

To get approved for a mortgage, whether conventional or government-backed, you’ll have to meet your lender’s minimum FICO score for that particular loan type. 

Type of Loan Minimum FICO Score

Conventional 620

KHC Down Payment Assistance 620

FHA 500 with 10% down 580 3.5% down payment

VA no minimum score (depends on the lender)

USDA no minimum score (depends on the lender

Most lenders will require a DTI ratio of less than 45-50 %, but this will depend on the type of loan you’re applying for. 

To determine your DTI, lenders take into account your front-end and back-end DTI.

Front-end DTI

Your front-end ratio consists of your monthly housing expenses divided by your monthly gross income. Housing-related expenses include your future mortgage payment, taxes and mortgage insurance.

Back-end DTI

The back-end DTI is the percentage of your gross income spent on monthly debts.

The items detailed in your credit report often comprise your back-end DTI. This includes monthly obligations such as credit cards, car loans, student loans, child support and personal loans.

Private mortgage insurance (PMI)

When purchasing a property with a conventional loan, some buyers have to factor in private mortgage insurance (PMI).

PMI is generally required for homebuyers who offer less than 20% down and is designed to protect the lender if you default on your loan.

The cost of PMI is rolled into your mortgage payment as an added fee and often accounts for 0.2% to 2% of the mortgage amount. According to Freddie Mac, you can expect to pay between $30 to $70 per month for every $100,000 borrowed.

Once you build your equity to 20% of the property’s appraised value, your loan servicer is required to drop PMI. According to Freddie Mac, PMI will automatically terminate on the date your principal balance reaches 78% of the original appraised value of your home.

Mortgage insurance premiums (MIP)

Government-backed loans don’t have PMI. Instead, you’ll have to factor in mortgage insurance premiums, which are paid both at closing and as part of your monthly payment.

Both FHA and USDA loans require mortgage insurance.

FHA loans require an upfront premium of 1.75% of the loan amount. FHA borrowers also pay an annual premium of 0.45% to 1.05% of the loan amount — unless they put 10% down. Some FHA borrowers can remove MIP, but that will depend on their loan’s origination date.

On the other hand, USDA loans require an upfront mortgage premium of 1% and an annual premium of 0.35%. The drawback of USDA loans is that there’s no way to eliminate your mortgage insurance premium.

If you have a VA loan, the VA guarantee replaces mortgage insurance. However, you’ll still have to pay an upfront funding fee of 1.4% to 3.6% of the loan amount at closing.

If you don’t have the money upfront, VA, FHA and USDA loans allow you to roll the fee into your mortgage, but your loan amount and overall loan cost will increase

Conventional Loans 3%-20%

620

45%

PMI required for down payments of less than 20%. Depends on loan type, credit score and down payment.

KHC Down payment Assistance

      zero down $6k dap assistance in form of second mortgage

620 and above score 

50% maximum debt to income ratio

VA Loans

Not required for down payment

Varies by lender, no minimum credit score

no max debt ratio but residual income is important.

No mortgage insurance but a one-time funding fee (1.25%-3.3% of the loan amount).

FHA Loans

3.5% to 580 credit score and 10% down with a 500 credit score.

56.9% max debt to income ratio but lower required on manual underwrites.

Mortgage insurance required. MIP can be removed after 11 years if you put down 10%.

USDA Loans

No required down payment

no minimum score varies by lender

45%

No mortgage insurance, but a one-time guarantee fee (1% of loan amount) and an annual fee (0.35% of loan amount).

Down Payment Assistance Kentucky 2022

Down Payment Programs in Kentucky for 2022

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.

Kentucky Down payment assistance loans are available up to $7,500 for Mortgage

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. 

​​​​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. 

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.

​More About Down Payment and Closing Costs

• No liquid asset review and no limit on borrower reserves.
• Specific credit underwriting standards may apply to down payment programs.​

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

Using Gift Money for a Down Payment in Kentucky For A Mortgage Loan

Can a family member help you come up with the down payment for a mortgage? If so, are there any limits on how much they can provide or other restrictions?


The answer is yes, in both cases. In today’s economy, many potential home buyers, young people in particular, are looking to their parents or other relatives for help in coming up with money for a down payment.

Advantages of a larger down payment

A larger down payment can make it easier to get a mortgage, make it possible to get a larger mortgage than you would otherwise have qualified for, or reduce the interest rate on your home loan, so there are a lot of benefits to using gift money for a down payment. There are certain limitations, however, so you want to be aware of them before you get started.

Do all lenders allow gift money for a down payment?

In most cases, it’s ok with lenders to use gift money from a family member to make a down payment. The FHA allows down payments of as little as 3.5 percent, and all of it can come from a gift, while Fannie Mae, VA and USDA Rural Development allow down payments fully funded by gift money as well.



If you’re getting a mortgage backed by Freddie Mac, however, you need to put up at least 5 percent of the purchase price out of your own money if the down payment is less than 20 percent. However, you can use gift money to increase your down payment, perhaps doubling it to 10 percent for example, and you can use gift money for the whole thing if you’re putting up 20 percent or more.



One problem is that, when getting a conforming loan, you rarely know up front if your lender plans to sell your loan to Freddie Mac or its sibling, Fannie Mae. So if you’re planning to use all gift money for your down payment, try to find a lender who deals primary with Fannie Mae, unless you’re applying for an FHA, VA or USDA loan.

Can you borrow down payment money from relatives?

Documenting Your Assets for A Louisville Kentucky Mortgage loan down-payment-


In a word – no. In fact, when putting up gift money for a down payment, you need to provide a statement from the giver that the money does not need to be repaid. The reason for this is that your down payment is supposed to be your own money, free and clear, with no strings attached. If it has to be repaid, even to a relative, that increases your debt burden and affects how much a mortgage lender is willing to lend you.

How much can they give you?

As much as they want or are able to. However, in practical terms, most gifts are limited to $13,000 – that’s how much the IRS allows one person to give another each year without incurring the gift tax. That amount doubles to $26,000 if the gift is given to you and your spouse, and can even increase to $52,000 a year if your parents file their taxes separately and each give gifts to you and your spouse.



The gift tax isn’t something you pay as a recipient – the gift is tax-free to you. From the IRS’ perspective, gifts are a form of early inheritance, so any amount above the $13,000 annual individual limit (up to $5 million lifetime) is taxed on the giver, same as an estate tax would be. That’s also why the gift isn’t tax deductable for the giver, since it’s considered an early payout from their estate.



If you’re fortunate enough to have family members who are able and willing to help you financially, gift money for a down payment can be a big help in buying a home. However, just make sure you know the rules going in so you don’t run into problems during the process.















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

kentuckyloan@gmail.com


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/

NMLS Consumer Access for Joel Lobb 

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KHC Home Buyer Tax Credit Down payment Assistance

KHC Home Buyer Tax Credit:

• Reduces the amount of federal income tax
you pay.
• Gives you more income to qualify for a
mortgage loan.
• Is effective for the life of the loan. As long as you
have a mortgage, you can claim the credit!
• A 25 percent tax credit of the mortgage interest
paid over a year (not to exceed $2,000).
• The remaining 75 percent of mortgage interest
can still be taken as a yearly deduction.
• Offers a reduction of the one-time fee* to $200
if you obtain your mortgage financing through
Kentucky Housing Corporation (KHC).



Down payment Assistance

Programs (DAP):
• Regular DAP:
Up to $6,000 second mortgage; paid back over
a 10-year period at 5.50 percent interest.
• Affordable DAP:
Up to $4,500 second mortgage; paid back
over a 10-year period at 1 percent interest.
Affordable DAP household income limits apply.
*DAPs can pay the home buyer tax credit fee.





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Kentucky Housing Corporations KHC First Time Home Buyers Down Payment Assistance Zero Down Options for 2014

KHC First Time Home Buyers Down Payment Assistance Zero Down

Kentucky Housing Corporation (KHC) still has $4 million in Mortgage Revenue Bond (MRB) Special Funding available!  This funding is limited and available on a first-come, first-served basis.  

Effective with reservations on or after Monday, January 6, 2014, all households below $35,000 gross annual household income will qualify for the MRB Special Funding interest rates. The rate with DAP will be lowered and the requirement to demonstrate a need by having at least a 25% front ratio has been eliminated. 

Program guidelines:

• First-time home buyers, unless property is located in a targeted county.
• Interest rate is fixed at 2.5 percent without Down payment Assistance Program (DAP) or 2.75 percent with DAP.
• Maximum ratios 40/45%.
• Executed purchase contract.
• Existing or new construction property (purchase price limit $115,000).
• Regular and Affordable DAP available.
• FHA, VA, and RHS first-mortgage programs.
• 640 credit score and AUS approval.
• Gross annual household income limit of $35,000 for all household sizes.
• Follow the 45-day lock with current reservation extension policy.

• The lower interest rate is not guaranteed until the lender receives the updated reservation confirmation.

 Appy below for free for this program or call me below with your questions. 

joel lobb Louisville Mortgage Group License:  NMLS# 57916 I specialize in Kentucky FHA, VA, USDA, KHC, Jumbo and Fannie Mae mortgage loans in Ky. I have helped over 589 Kentucky families buy their first home and refinance their current mortgage for a lower rate; For the first time buyer with little money ...view more Email Me | Visit My Website (502) 905-3708

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Kentucky Housing or KHC Interest Rate:

Interest Rates

Reservation System Open Monday - Friday from 10 a.m. to 9 p.m.

Rates subject to change without notice   

Secondary Market Interest Rates -- 45 Day Lock

 

Loan Type	Rate without Down Payment Assistance	Rate with Down Payment Assistance
FHA, VA & RHS	4.0%	4.25%
​Conventional Preferred	4.25%	4.50%
​Conventional Preferred Risk	4.750%	4.875%
​HFA Preferred Plus 80	4.375%	4.625%

Secondary Market Refinance Rates -- 45 Day Lock

Loan Type	Rate
FHA Refinance	4.0%
RHS Streamlined-Assist Refinance Program	4.0%

Kentucky First Time Home Buyer Down Payment Assistance thru Kentucky Housing up to $15,000 Dap Available.

Interest Rates

*** $15,000 Neighborhood DAP available from loan fallout ***

**** MRB Special Funding **** Limited Availability -- Monies Still Available  Interest Rate:  2.50% without Down Payment Assistance                        3.00% with Down Payment Assistance  $35,000 Household Income Limit First time home buyer, unless property located in targeted county Existing or new construction property -- purchase price limit $115,000  Regular and Affordable DAP available FHA, VA or RHS first mortgage programs through MRB Funding 640 credit score Borrower must demonstrate a need for the special funding.  The borrower's housing ratio must be at a minimum of 25% Maximum ratios of 40/45% with AUS approval

Secondary Market Interest Rates -- 45-Day Lock  

Loan Type	Rate without Down Payment Assistance	Rate with Down Payment Assistance
FHA, VA & RHS  640 credit score AUS approval Purchases & Refinances	4.000%	4.500%
Conventional  680 credit score No MI required LTV 80.01% -97.00% *DU AUS approval  Purchases	5.125%	5.375%

Mortgage Revenue Bond Interest Rates -- 45-Day Lock

Loan Type	Rate without Down Payment Assistance	Rate with Down Payment Assistance
FHA, VA & RHS  640 credit score AUS approval Purchases	4.000%	4.500%
Conventional  680 credit score No MI required LTV 80.01% -97.00% *DU AUS approval  Purchases	5.125%	5.375%

 * Run through DU for Approve/Eligible BEFORE reserving with KHC.  Select HFA Preferred Risk Sharing program located on Additional Data Screen.  

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/

KHC Loan Programs for Down Payment Assistance In Kentucky

KHC Loan Programs

KHC Loan Programs

MRB

• All MRB Kentucky Housing first mortgage loans are for a 30-year term at a fixed rate of interest.
• The home you purchase through Kentucky Housing must be the only residential property you own and you must occupy the home as your principal residence while the loan debt is still outstanding.
• To qualify, you must meet KHC’s regular MRB income guidelines, make a down payment or qualify for down payment assistance, be a US citizen or legal alien and have an acceptable credit history.
• Some MRB KHC loans are subject to a federal recapture tax. Recapture is a federal income tax that the borrowers may have to pay if they have considerable growth in their income and they sell or transfer their KHC-financed home within 9 years.  However, KHC has implemented a Recapture Tax Guarantee Program for all loans that close after October 1, 2006.  The Recapture Tax Guarantee Program will reimburse homeowners if they are subject to pay the Federal Recapture Tax on their KHC mortgage loan upon the sale of their home.

Conventional

• Insured by approved mortgage insurance company.
• Minimum credit score of 660 or better.
• Quick turnaround time, 20 percent down payment and no up-front or monthly mortgage insurance.

FHA

• Insured by the Federal Housing Administration.
• Down payments as little as 3.5 percent.
• Can use DAP for 3.5 percent down payment requirement.
• Upfront and monthly mortgage insurance.
• Minimum credit score of 620.

VA

• Guaranteed by the Veterans Administration for qualified military veterans.
• No down payment if the property appraises for the sale price or greater.
• Credit underwriting is flexible.
• Minimum credit score of 620.
• No monthly mortgage insurance payments.

RHS

• Guaranteed by Rural Housing Services (RHS).
• Home must be located in a rural area as defined by RHS.
• No down payment if the property appraises for the sale price or greater.
• Minimum credit score of 620.

GNMA Secondary Market

• All GNMA KHC first mortgage loans are for a 30-year term at a fixed rate of interest.
• The home you purchase through KHC must be occupied as your principle residence while the loan debt is outstanding.
• To qualify, you must meet KHC's GNMA income guidelines, make a down payment, or qualify for down payment assistance, be a U.S. citizen or legal alien and have an acceptable credit history.

FHA

• Insured by the Federal Housing Administration.
• Down payments as little as 3.5 percent.
• Can use DAP for 3.5 percent down payment requirement.
• Upfront and monthly mortgage insurance.
• Minimum credit score of 620.

VA

• Guaranteed by the Veterans Administration for qualified military veterans.
• No down payment if the property appraises for the sale price or greater.
• Credit underwriting is flexible.
• Minimum credit score of 620.
• No monthly mortgage insurance payments.

RHS

• Guaranteed by Rural Housing Services (RHS).
• Home must be located in a rural area as defined by RHS.
• No down payment if the property appraises for the sale price or greater.
• Minimum credit score of 620.

Two FHA Refinance Options

• Credit qualifying Streamline Refinance and Rate/Term Refinance
  • Insured by the Federal Housing Administration
  • Cash back to borrower not to exceed $500
  • Upfront and monthly mortgage insurance
  • Minimum credit score of 620

Home Buyer Tax Credit

KHC's Home Buyer Tax Credit is available through Mortgage Credit Certificates (MCC), which reduce the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan.  MCCs are NOT mortgages.  They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment.  That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay.  The federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan.  But an MCC gives you a tax credit of 25 percent (not to exceed $2,000).  You can still deduct the remaining 75 percent interest on your income taxes.  A tax credit is not the same as a tax deduction.  A tax deduction reduces the portion of your income that is taxed, so you pay less.  A tax credit is a direct, dollar for dollar reduction in the total tax you owe.  The MCC is effective for the life of the loan as long as you live in the home.  If you sell your home in the first nine years of ownership, you may be subject to Federal Recapture Tax.  One-time fee of $500 or reduced to $200 if through KHC's GNMA Secondary Market First Mortgage Program.  Not valid with MRB loan programs.

Special First Mortgage Loan Programs

The Lottery for Special Funding is opened once a year.  The funds are allocated for persons meeting income and all MRB Guidelines.  These limited funds are available, usually in July, on a first-come, first-served basis.

Guidelines

• Must be a first time home buyer, unless property is located in a targeted county.
• Interest rate fixed at 3.00 percent based on minimum ratios 29/41 percent.
• Eligible households:
  • Single parents (at least one dependent under the age of 18 must live in the home.)
  • Households with a person who has a permanent disability and who receives some form of disability income (SSI, SSDI, Veterans Disability etc.).
  • Households where at least one of the home buyers is age 62 or older.
• Gross Annual Household Income guidelines:
  • $28,000 for a household of 1 or 2 people; or
  • $33,000 for a household of 3 or more people.
• All household occupants (18 years and older) with income must be included on loan and be credit ready.
• Must use all but two months’ reserves of borrower’s own funds.
• Existing or new construction property with a purchase price limit of $115,000
• Zero Point Rate
• Only FHA, VA and RHS – 620 credit score and AUS Approval
• 60 Day Lock
• Kentucky Housing’s Regular and HOME DAP loan program may be used for down payment and closing cost assistance. 

Applying for a Kentucky Housing loan is easy. Just contact one of our approved lenders near you and ask for a Kentucky Housing loan.

Down Payment Closing Cost Assistance

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.

Not Available - Hardest Hit Fund (HHF) DAP 

• Zero percent interest rate for first-time home buyers.
• A non-repayable second mortgage for $10,000.
• Forgiven after five years.
• Home purchase must be located in Christian, Hardin, Jefferson, or Kenton counties.
• New construction properties are not allowed.
• ​Property has to have been previously occupied
• Applicants must meet Secondary Market or MRB Income and Purchase Price Limits based on funding source.

Regular DAP

• Purchase price up to $301,294 with Secondary Market or $271,164 with MRB.
• Assistance in the form of a loan up to $6,000 in $100 increments.
• Repayable over a ten-year term at 5.50 percent. A DAP of $6,000 over ten years at 5.50 percent interest would equal a payment of $65.12.
• Available to all KHC first-mortgage loan recipients.

Affordable DAP

• Purchase price up to $301,294 with Secondary Market or $271,164 with MRB.
• Assistance up to $4,500.
• Repayable over a ten-year term at 1.00 percent.
• Borrowers must meet Affordable DAP income limits.

More about down payment and closing costs

• No liquid asset review and no limit on borrower reserves.
• Specific credit underwriting standards may apply to down payment programs.

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
 kentuckyloan@gmail.com

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#57916 http://www.nmlsconsumeraccess.org/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

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