• All 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 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 Kentucky Housing 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 640.

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 640.
• 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 640.
• No monthly mortgage insurance payments.

Mortgage Credit Certificates (MCC)

A Mortgage Credit Certificates (MCC) reduces 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.

Special First Mortgage Loan Programs

New Construction Program for Single-Parent, Disabled and Elderly Households offers loans for newly constructed houses at interest rates from 1 to 6 percent. These limited funds are available, usually in July, on a first-come, first-served basis.

Guidelines

• Interest rate determined by the families’ ability to repay the loan.
• For new homes with a purchase price of $115,000 or less.
• Eligible borrowers:
  • 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.
• Income guidelines:
  • $28,000 for a household of 1 or 2 people; or
  • $33,000 for a household of 3 or more people.
• Kentucky Housing’s DAP loan program may be used for down payment and closing cost assistance.

Applying for a Kentucky Housing loan is easy. Just contact us ask for a Kentucky Housing loan.

Kentucky Housing recognizes that down payments, closing costs and prepaids 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 needs.

Regular Down payment Assistance Program (DAP)

• Purchase price up to $243,000.
• Assistance in the form of a loan up to $4,000 in $100 increments.
• Repayable over a seven-year term at 6 percent.  A DAP of $4,000 over 7 years at 6 percent interest would equal a payment of $58.44.
• Available to all KHC first mortgage loan recipients who are first-time homebuyers in non-targeted counties and first and second-time homebuyers in targeted counties.

HOME-DAP

• Purchase price up to $195,700.
• Assistance up to $4,500
• No monthly repayment; forgiven over five years.
• Existing homes only.
• Borrowers must meet HOME-income guidelines.

HOME Special Program

• Purchase price up to $195,700.
• Assistance up to $10,000
• No monthly repayment; forgiven over five years.
• Existing homes only.
• Borrowers must meet HOME-income guidelines.
• Eligible borrowers include:
  • Households that include a person with a permanent disability and who receives disability income (SSI, SSDI, Veterans Disability etc.).
  • Households where at least one of the home buyers is age 62 or older.

HOME Family Program

• Purchase price up to $195,700.
• Assistance up to $10,000
• No monthly repayment; forgiven over five years.
• Existing homes only.
• Borrowers must meet HOME-income guidelines.
• Eligible borrowers include:
  • Single- and two-parent households that have at least one dependent child under the age of 18 living in the household and that are first-time home buyers (have not owned a home or had an ownership interest in a home in the last 3 years).

More about down payment and closing costs

• No liquid asset review and no limit on borrower reserves for Regular DAP.
• Borrowers may retain two months’ house payments in reserve while using available funds first before looking for any form of HOME DAP assistance.
• Specific credit underwriting standards may apply to down payment programs.

For More:

2010 guidelines by county, which are significantly below the HB 256 amounts, can be found at http://www.kyhousing.org/uploadedFiles/Homeownership/Homebuyers/IncomeLimits.pdf?n=1221
    To compute a new county income limit outside Jefferson, take the 2010 1-2 persons number on the chart and multiply by 1.45.  You’ll be tolerably close for a rule of thumb, until the new guidelines arrive at the end of next month.

• All 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 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 Kentucky Housing 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.

Kentucky Housing recognizes that down payments, closing costs and prepaids 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 needs.

Regular Down payment Assistance Program (DAP)

• Purchase price up to $243,000.
• Assistance in the form of a loan up to $4,000 in $100 increments.
• Repayable over a seven-year term at 6 percent.  A DAP of $4,000 over 7 years at 6 percent interest would equal a payment of $58.44.
• Available to all KHC first mortgage loan recipients who are first-time homebuyers in non-targeted counties and first and second-time homebuyers in targeted counties.

HOME-DAP

• Purchase price up to $195,700.
• Assistance up to $4,500
• No monthly repayment; forgiven over five years.
• Existing homes only.
• Borrowers must meet HOME-income guidelines.

HOME Special Program

• Purchase price up to $195,700.
• Assistance up to $10,000
• No monthly repayment; forgiven over five years.
• Existing homes only.
• Borrowers must meet HOME-income guidelines.
• Eligible borrowers include:
  • Households that include a person with a permanent disability and who receives disability income (SSI, SSDI, Veterans Disability etc.).
  • Households where at least one of the home buyers is age 62 or older.

HOME Family Program

• Purchase price up to $195,700.
• Assistance up to $10,000
• No monthly repayment; forgiven over five years.
• Existing homes only.
• Borrowers must meet HOME-income guidelines.
• Eligible borrowers include:
  • Single- and two-parent households that have at least one dependent child under the age of 18 living in the household and that are first-time home buyers (have not owned a home or had an ownership interest in a home in the last 3 years).

More about down payment and closing costs

• No liquid asset review and no limit on borrower reserves for Regular DAP.
• Borrowers may retain two months’ house payments in reserve while using available funds first before looking for any form of HOME DAP assistance.
• Specific credit underwriting standards may apply to down payment programs.