KHC offers two different funding sources: MRB and Secondary Market.

MRB FUNDING SOURCE

• 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 U.S. 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 No Mortgage Insurance Program

• Minimum credit score of 680 or better.
• 3 percent down payment and no up-front or monthly mortgage insurance.
• All KHC DAPs applicable.
• No minimum borrower contribution.
• No reserves required.

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.
• Upfront and monthly mortgage insurance.
• Minimum credit score of 640.

New Bond Special Funding (Available Only Through MRB)

All monies for the New Bond Special Funding have been used–check back in July 2013.

SECONDARY MARKET FUNDING SOURCE

• All Secondary Market 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.

Conventional No Mortgage Insurance Program

• Minimum credit score of 680 or better.
• 3 percent down payment and no up-front or monthly mortgage insurance.
• All KHC DAPs applicable.
• No minimum borrower contribution.
• No reserves required.

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.

Two FHA Refinance Options (Available Only Through Secondary Market)

• 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 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.
• Upfront and monthly mortgage insurance
• Minimum credit score of 640.

RHS Refinance Pilot Program (Available Only Through Secondary Market)

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 Secondary Market First Mortgage Program.  Not valid with MRB loan programs.

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