Zero/minimum down payment for mortgage KY

Down Payment and Closing Costs Assistance

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Kentucky First Time Home Buyer Grants and Loan Programs

Kentucky first time home buyer grants and loan programs – The Kentucky Housing Corporation (KHC) offers programs for first time home buyers.

The KHC offers home ownership education classes as well as low interest rate, 30 year home loans/mortgages through participating lenders. Many of the programs are offered to and non-first time buyers as well.

The KHC also offers downpayment and closing cost assistance to qualified buyers. The closing costs assistance ranges from $4,500 to $10,000, depending on the qualifications of the buyer(s).

To qualify for these programs, the KHC has buyer income limits as well as limits to the purchase price of the home.

Check out the KHC website to obtain more information about these programs.

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KENTUCKY HOUSING CORPORATION.

New Kentucky Law = New Bucks For Buyers

How about a little more home sale re-stimulus?

       Kentucky’s new second-time homebuyer, and affordable mortgage, law was signed by Gov. Beshear today (Monday, March 28).
       It’s effective April 30.
       Until now, many two-income families had incomes over the limit for Kentucky Housing Corporation (KHC) support.  That disqualified them not just from more economical KHC mortgage loans, but also down payment and closing costs assistance.  Down payment and closing aid has been available only through KHC.

       Those home buyers will be eligible now in 33 days. There are lots of them.

       It will make homeownership possible for many middle-income families.  It also can be expected to end fence-sitting for many more.

       The new law, HB 256, covers homeowners with incomes as high as 175% of the area median income.  The program works through KHC, the state housing finance agency.

       KHC’s guidelines have not been redone yet, to turn that 175% into a dollar figure.  The guidelines now on the KHC website do not apply to the HB 256 programs.

       But expect the median income cap for Jefferson County to be $108,150.  That’s a household income limit.  The current guidelines are much lower – $74,160 in Jefferson County for one to two people, and $86,250 for three or more people in the household.

       Its not clear yet whether any adjustments to income will be allowed, such as counting Social Security Disability Income checks for a third person.  Think in-law quarters for families taking care of parents.  We’ll keep you posted on that one (we’ve already put in the suggestion).
       However, it is clear that the income limit counts the income of everybody in the household, whether they are going on the loan or not.  That may mean decisions about the number of household members may turn into a timing issue.  Some will buy the house singly or as a couple, and move a parent in later, possibly.

       Down payment assistance and closing cost assistance can be set up 4 different ways.  One plan lets home buyers repay monthly.  Three plans are forgivable loans, depending on household type.  The three basic categories are (1) single or 2-parent households, (2) disabled and receiving disability, and (3) other households meeting income guidelines.  The three forgivable plans provide up to $4,500, which is forgiven after the buyer stays in the home 5 years.  No monthly payments are required.  The amount forgiven goes down every month on a pro-rated basis if the borrower has to move in less than five years. That’s been the basic program for a while.

       KHC also will be able to refinance mortgages with affordable, fixed-interest rates for 15-year and 30-year terms and offer mortgages for second-time home buyers.
       KHC loans are pre-qualified and financed through one of 105 lending partner banks and mortgage companies located in communities throughout the state.  They also are serviced in Frankfort, KY, an added safety cushion for home buyers worried about having their loans sold to anonymous strangers.  They know exactly where their payments go every month.  The existing Mortgage Credit Certificate (MCC) we first reported in the May, 2009 news flash are still available.

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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. 

Down Payment and Closing Costs 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.

502-905-3708 or email us for a free application kentuckyloan@gmail.com

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Kentucky Housing Corporation encourages
Kentuckians to pursue homeownership because
it strengthens financial and household stability.
Through an array of interrelated programs, Kentucky
Housing provides at or below-market interest rate
home loans, down payment and closing costs
assistance, homeownership education and counseling
and mortgage loan servicing.

Kentucky Housing’s free Home Buyer Notebook, a
step-by-step guide to purchasing a home, is available
by calling (502) 905-3708 or email us kentuckyloan@gmail.com
Home Mortgage Loans

Kentucky Housing offers at or below-market interest rate loans to
income-qualified home buyers, including a variety of conventional
loans, as well as Federal Housing Administration-, Veterans
Administration- and Rural Housing Services-insured loans.
Qualifications for the program are based primarily on income,
credit history and the ability to repay the loan. All loans are offered
at a fixed rate for a term of 30 years. Kentucky Housing’s current
interest rate can be found at www.kyhousing.org. Purchase price
limitations apply and are periodically adjusted in accordance with the
state’s affordable housing market.

For Home Buyers
|

Kentucky Housing Corporation Down Payment and Closing Costs
Assistance Loans

Recognizing that down payments and closing costs are often
stumbling blocks for many potential home buyers, Kentucky Housing
developed several down payment assistance programs to meet
a variety of needs. Depending on the individual home buyer’s
qualifications, including income and purchase price limits, up to
$10,000 may be available for down payment and closing costs
assistance.

Special First Mortgage Loans

To further extend affordable homeownership opportunities,
Kentucky Housing periodically offers very low-interest rate home
loans to income-qualified Kentuckians with special needs. Eligible
households include single parents, elderly and persons who receive
disability income. The interest rate assigned to a qualified applicant
may range from 1 to 6 percent, based on what his or her income can
support.

Homeownership Education

Kentucky Housing’s free homeownership education program,
called Yes You Can … Own A Home, explains the home purchasing
process to prospective home buyers in communities across
Kentucky.
The program consists of a class or a series of classes led by local
housing professional volunteers. Participants learn how to make
knowledgeable decisions, including how much they can afford to
pay for a home, understanding credit, how to shop for an affordable
mortgage and basic home maintenance tips.
In communities where Yes You Can … Own A Home is
not offered, the home study course is available by calling
(502) 905-3708
Programs Overview |

Homeownership Counseling

In addition to home buyer education, Kentucky Housing offers a
homeownership counseling curriculum and materials to counselors
throughout the state. Kentucky Housing contracts with agencies
and counselors to provide counseling services to Kentucky Housingeligible
prospective home buyers who have been declined a home
loan by Kentucky Housing or a Kentucky Housing-approved lender
due to credit problems. The counselors help participants develop a
budget and savings plan, identify and clean up credit problems and
prepare to apply for a home loan.
Graduates of the Yes You Can … Own A Home program who
have credit issues or believe they need additional counseling are
eligible to participate in this program.

Kentucky First Time Buyer Down Payment and Closing Costs Assistance

Purchase Price Limit When HOME Funds Are Used – $195,700

• Regular Down payment Assistance Program (DAP)

• Purchase price up to $237,000.

• Assistance up to $5,000.

• Available to all KHC first mortgage loan recipients.

• Repaid over 10 years at a low fixed interest rate (6.0%)

• 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:

o Households that include a person with a permanent disability and who

receives disability income (SSI, SSDI, Veterans Disability etc.).

o 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.

• Purchase price may not exceed $200,000.

• Eligible borrowers include:

o 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:

• Borrowers may retain two months’ house payments in reserve while using available

funds first before looking for DAP assistance.

• Specific credit underwriting standards apply to all down payment programs.

Elibility Requirements

You

To qualify for a KHC loan, you must meet the following requirements:

• Have an annual household income within the income limitations for your county

and family size.

• Be a U.S. citizen, other national or qualified alien person.

• Have the ability to provide a down payment or qualify for down payment

assistance.

• Have an acceptable credit history.

• Can be a previous homeowner if purchasing in one of Kentucky’s 86 targeted

counties.

Your Home

The home you wish to purchase must meet the following guidelines:

• Purchase prices up to $237,000.

• Borrower must occupy the home within 60 days of closing and for duration of loan.

• New or previously occupied detached, single-family home

• New or previously occupied condominium, townhouse or attached unit in a planned

unit development. (Check with lender for eligible condominiums.)

• New or previously occupied manufactured housing, single or double wide,

permanently affixed to the foundation and taxed as real estate (must meet loan

type’s foundation requirements).

• One-acre maximum on lot size unless acreage waiver is obtained.
 
 
KENTUCKY HOUSING CORPORATION



GROSS HOUSEHOLD INCOME LIMITS


WHEN HOME FUNDS ARE USED

(1) One Person (2) Two Persons (3) Three Persons (4) Four or More Persons

22,450 25,700 28,900 32,100

Bullitt, Henry, Jefferson, Oldham, Shelby, Spencer, Trimble

32,950 37,700 42,400 47,100

Bourbon, Clark, Fayette, Jessamine, Scott, Woodford

34,600 39,550 44,500 49,450

Boone, Bracken, Campbell, Gallatin, Kenton, Pendleton

36,200 41,350 46,550 51,700

Allen 24,450 27,900 31,400 34,900

Anderson 34,050 38,900 43,800 48,650

Ballard 27,950 31,900 35,900 39,900

Barren 24,700 28,250 31,750 35,300

Boyd 25,850 29,500 33,200 36,900

Boyle 28,650 32,700 36,800 40,900

Breckinridge 25,100 28,700 32,250 35,850

Butler 23,400 26,750 30,100 33,450

Caldwell 25,100 28,700 32,250 35,850

Calloway 26,800 30,600 34,450 38,250

Carroll 29,500 33,700 37,950 42,150

Carter 25,000 28,550 32,150 35,700

Christian 26,800 30,600 34,450 38,250

Crittenden 25,150 28,750 32,350 35,900

Daviess 30,050 34,300 38,600 42,900

Edmonson 29,000 33,150 37,300 41,450

Fleming 22,750 26,000 29,250 32,500

Franklin 34,250 39,150 44,050 48,950

Fulton 22,700 25,900 29,150 32,400

Garrard 28,450 32,500 36,600 40,650

Grant 29,000 33,150 37,300 41,450

The income limitations listed below are imposed by federal law. Failure to comply with them may create adverse consequences

for KHC. (SEE APPENDIX D FOR DEFINITIONS OF GROSS ANNUAL HOUSEHOLD INCOME.)

Adair , Bath, Bell, Breathitt , Carlisle, Casey, Clay, Clinton, Cumberland, Elliott, Estill, Floyd, Grayson, Green, Harlan,

Hart, Jackson, Johnson, Knott, Knox, Laurel, Lawrence, Lee, Leslie, Letcher, Lewis, Magoffin, Martin, McCreary,

Menlfee, Metcalfe, Monroe, Morgan, Muhlenberg, Owsley, Perry, Pike, Powell, Pulaski, Rockcastle, Russell, Wayne,

Whitley, Wolfe

Other Counties

KENTUCKY HOUSING CORPORATION

GROSS HOUSEHOLD INCOME LIMITS

WHEN HOME FUNDS ARE USED