2026 update for Kentucky home buyers: The Federal Home Loan Bank of Cincinnati Welcome Home Program is now closed for 2026. If you were hoping to use the $10,000 to $20,000 Welcome Home Grant for down payment or closing costs, you need to review other mortgage options now.
2026 Welcome Home Program Is Closed: Kentucky Home Buyer Alternatives
The 2026 Welcome Home Program, often called the Kentucky Welcome Home Grant, is closed for the year. This program was one of the most searched-for down payment and closing cost assistance options for Kentucky home buyers because eligible borrowers could receive grant funds to help reduce the amount of money needed at closing.
The hard truth is simple: this money goes fast. Buyers across Kentucky, Ohio, and Tennessee compete for limited grant funds through participating Federal Home Loan Bank of Cincinnati member lenders. Once the funds are reserved, the program closes.
If you missed the 2026 Welcome Home Grant, do not stop your home search yet. Kentucky buyers may still have strong options available, including KHC down payment assistance, SmartBuy down payment assistance, USDA Rural Housing zero-down loans, FHA loans with 3.5% down, VA loans for eligible veterans and service members, and conventional 3% down programs.
Quick Summary for Kentucky Buyers
- The 2026 Welcome Home Program is closed.
- The grant was first-come, first-served and funds were limited.
- Qualified buyers may still have alternatives through KHC, SmartBuy, USDA, FHA, VA, and conventional loan programs.
- KHC offers Regular Down Payment Assistance up to $12,500 for eligible borrowers using a KHC first mortgage.
- SmartBuy may offer 3.5% or 5% assistance options with eligible FHA, USDA, or HUD 184 government loans.
- USDA and VA loans may offer true zero-down financing if the borrower and property qualify.
- The next step is to compare the loan options side by side before making an offer.
What Was the 2026 Welcome Home Program?
The Welcome Home Program is administered through the Federal Home Loan Bank of Cincinnati and participating member institutions. It is designed to help low-to-moderate-income home buyers with down payment and closing costs.
For 2026, the program opened on April 6, 2026, at 8:00 a.m. Eastern Time. Funds were available on a first-come, first-served basis. Buyers generally needed to already be pre-approved and under contract before a lender could reserve the funds.
That is one of the biggest reasons many buyers miss it. You usually cannot wait until the program opens and then start shopping. By the time you get pre-approved, find a house, negotiate a contract, and send the file to the lender, funds may already be gone.
Why the Welcome Home Grant Runs Out So Fast
The Welcome Home Grant is attractive because it can reduce the amount of cash needed at closing. For buyers who have stable income and acceptable credit but limited savings, that assistance can make a major difference.
But there are three major issues:
- Funds are limited.
- Demand is very high.
- Buyers usually need a signed purchase contract before funds can be reserved.
In real-world terms, the buyers who are most prepared usually have the best chance. That means having the mortgage pre-approval completed, income reviewed, credit checked, and documentation ready before the program opens.
Important Buyer Warning
Do not build your entire home-buying strategy around one grant program. If the funds are gone, your transaction can fall apart unless you have a backup plan. A smart mortgage plan should review USDA, KHC, SmartBuy, FHA, VA, conventional, seller-paid closing costs, and other available assistance options upfront.
Best Alternatives Now That the 2026 Welcome Home Program Is Closed
Missing the Welcome Home Grant is frustrating, but it does not automatically mean you cannot buy a home in Kentucky. The right replacement depends on your credit score, income, debt ratio, property location, military eligibility, available cash, and whether the home and borrower meet the program requirements.
1. KHC Down Payment Assistance: Up to $12,500
Kentucky Housing Corporation, commonly called KHC, offers down payment assistance for eligible Kentucky home buyers. The Regular DAP program can provide assistance up to $12,500 in $100 increments.
This is not the same as the Welcome Home Grant. KHC Regular DAP is structured as a repayable second mortgage. As currently published by KHC, the Regular DAP is repayable over a 15-year term at 4.75%.
KHC assistance can be used with eligible KHC first mortgage loans, including FHA, VA, USDA/RHS, and conventional programs. For many buyers, KHC can help cover down payment, closing costs, and prepaid escrow items.
- Assistance amount: up to $12,500
- Structure: repayable second mortgage
- Term: 15 years
- Current published rate: 4.75%
- Must be paired with a KHC first mortgage
- KHC purchase price limit currently listed at $566,354
- Available to eligible Kentucky home buyers who meet KHC program rules
Learn more about KHC down payment assistance here: Kentucky Down Payment Assistance for First-Time Homebuyers
2. SmartBuy Down Payment Assistance Program
Another option Kentucky home buyers may want to review is the SmartBuy Down Payment Assistance program. SmartBuy is a government-loan down payment assistance option that can be paired with eligible FHA, HUD 184, and USDA first mortgage loans.
Unlike the Welcome Home Grant, SmartBuy is not positioned as a limited annual grant program that closes once funds are reserved. It is structured as a second lien behind the first mortgage. Depending on the option used, the second lien may be forgivable or repayable.
SmartBuy Program Highlights
- Available with eligible FHA, HUD 184, and USDA first mortgages.
- Government loans only; conventional first mortgages are not eligible.
- No first-time home buyer restriction.
- Available nationally except New York and U.S. territories.
- Owner-occupied primary residences only.
- At least one borrower must occupy the home.
- Property must remain the borrower’s primary residence during the term of the second lien.
- No investment properties or second homes.
- Minimum representative credit score is generally 640 for forgivable options.
- Repayable options generally require a 660 representative credit score.
- Blended credit score qualification may be available in certain borrower scenarios.
The SmartBuy program has several assistance structures, including a 3-year forgivable second lien, a 5-year forgivable second lien, a 10-year repayable second lien, and a closing-cost repayable option.
SmartBuy Forgivable DPA Options
The forgivable SmartBuy options are structured as 0% interest second liens with no monthly payment. The second lien may be fully forgiven if the borrower does not have a 90-day or greater delinquency on the required first mortgage payments during the applicable forgiveness period.
- 3-year forgivable option: assistance based on 3.5% of the purchase price or appraised value, whichever is less.
- 5-year forgivable option: assistance may be based on 3.5% or 5% of the purchase price or appraised value, whichever is less.
- Second lien has 0% interest and no monthly payment.
- The 3-year option requires no 90-day or greater delinquency on the first 36 payments.
- The 5-year option requires no 90-day or greater delinquency on the first 60 payments.
- No resubordination, assumptions, or additional liens are allowed under the program matrix.
SmartBuy Repayable DPA Options
SmartBuy also has repayable second-lien options. These are not grants and are not forgivable. The program matrix shows the repayable second lien carries a 9.99% interest rate, is amortized over 30 years, and includes a 10-year balloon.
- Repayable assistance may be available at 3.5% or 5%.
- Funds may be used for down payment, closing costs, and prepaid items depending on the option.
- Repayable second lien is not forgivable.
- 30-year amortization with a 10-year balloon.
- 9.99% second-lien interest rate according to the attached SmartBuy matrix.
- No resubordination, assumptions, or additional liens are allowed under the program matrix.
SmartBuy Credit Score and Underwriting Notes
SmartBuy has credit score and underwriting rules that must be reviewed carefully. The attached matrix shows a minimum representative credit score of 640 for the forgivable options and 660 for the repayable options. All borrowers must have at least one credit score.
SmartBuy also includes a blended credit score option for qualifying in certain cases. For the blended score to work, only occupying borrowers are used, the primary wage earner must earn at least 60% of total household income, and the primary wage earner must also have the higher credit score. The blended score is used for qualification purposes only, while pricing is still based on each borrower’s individual representative credit score.
Important SmartBuy Warning
SmartBuy can be a strong option for the right borrower, especially when the Welcome Home Grant is closed. However, buyers need to understand whether they are using the forgivable version or the repayable version. The repayable version adds a second mortgage structure and may include a 10-year balloon, so it needs to be compared carefully against KHC, USDA, FHA with seller concessions, and VA financing.
Example: On a $450,000 purchase price, 3.5% assistance would equal approximately $15,750. A 5% assistance option would equal approximately $22,500, subject to program guidelines, property value, underwriting approval, and lender availability.
3. USDA Rural Housing Loan: Possible Zero Down Payment
The USDA Rural Housing loan is one of the strongest no-down-payment mortgage programs available in Kentucky. Many small-town and rural areas qualify, and some areas outside larger cities may qualify as well.
USDA can be a strong option if the home is located in an eligible area and the household income is within program limits.
- Possible 100% financing
- Property must be in a USDA-eligible location
- Household income limits apply
- Primary residence only
- Seller-paid closing costs may help reduce cash needed to close
- Often a strong option for rural and small-town Kentucky buyers
- May be eligible with KHC DAP or SmartBuy depending on product, lender, and underwriting approval
Learn more here: Kentucky zero-down home buyer options
4. FHA Loan With 3.5% Down
FHA loans remain one of the most practical mortgage options for Kentucky first-time home buyers and borrowers who need flexible credit guidelines.
FHA is not automatically a zero-down loan, but the down payment can be as low as 3.5% for eligible borrowers. FHA may also allow gift funds, seller-paid closing costs, and approved down payment assistance programs.
- Minimum down payment can be as low as 3.5%
- More flexible credit guidelines than many conventional loans
- Gift funds may be allowed
- Seller concessions may help with closing costs and prepaid expenses
- Can sometimes be paired with approved down payment assistance
- May be paired with KHC DAP or SmartBuy if all program rules are met
FHA can be a good fallback when the Welcome Home Grant is gone, especially for buyers who have credit challenges or limited savings.
5. VA Loans for Eligible Veterans and Service Members
VA loans may offer one of the best mortgage structures available for eligible veterans, active-duty service members, certain reservists, National Guard members, and eligible surviving spouses.
- Possible zero down payment
- No monthly mortgage insurance
- Competitive loan terms for qualified borrowers
- Primary residence only
- VA Certificate of Eligibility required
- May be paired with KHC DAP if the borrower and loan meet KHC rules
Learn more here: Kentucky VA home loan options
6. Conventional 3% Down Options
Some Kentucky buyers may qualify for conventional 3% down options through Fannie Mae or Freddie Mac programs. These can be attractive for borrowers with stronger credit profiles and stable income.
Conventional loans are not always the best fit for every first-time buyer, but they can be worth comparing against FHA, especially when the borrower has stronger credit and wants a long-term mortgage insurance strategy.
- Possible 3% down payment for eligible borrowers
- Credit score and income rules apply
- May have lower mortgage insurance for stronger credit borrowers
- Can be paired with certain assistance programs if guidelines allow
- SmartBuy is not available with conventional first mortgages
Comparison: Welcome Home Grant vs. KHC vs. SmartBuy vs. USDA vs. FHA vs. VA
| Program | Down Payment Help | Best For | Main Catch |
|---|---|---|---|
| 2026 Welcome Home Program | Grant assistance, but now closed for 2026 | Buyers already pre-approved and under contract before funds ran out | No longer available for new 2026 reservations |
| KHC Regular DAP | Up to $12,500 repayable second mortgage | Kentucky buyers short on cash to close | Must use a KHC first mortgage and meet program rules |
| SmartBuy DPA | 3.5% or 5% assistance options depending on program structure | FHA, HUD 184, and USDA borrowers needing DPA when Welcome Home funds are gone | Government loans only; repayable option is not forgivable and may include a 10-year balloon |
| USDA Rural Housing | Possible 100% financing | Eligible rural and small-town Kentucky buyers | Property location and household income limits apply |
| FHA Loan | As low as 3.5% down for eligible borrowers | Buyers needing flexible credit guidelines | Mortgage insurance is required |
| VA Loan | Possible zero down payment | Eligible veterans, service members, and surviving spouses | VA eligibility required |
| Conventional 3% Down | Possible 3% down payment | Stronger-credit buyers who qualify under conventional guidelines | Credit, income, mortgage insurance, and program limits apply |
Example: $450,000 Purchase Price Assistance Comparison
Here is a simple example using a $450,000 purchase price. This is only an illustration. Actual numbers depend on the final sales price, appraised value, loan type, interest rate, taxes, insurance, seller concessions, credit profile, and underwriting approval.
| Option | Possible Assistance | Basic Structure |
|---|---|---|
| Welcome Home Program | Not available for new 2026 reservations | Closed for 2026 |
| KHC Regular DAP | Up to $12,500 | Repayable 15-year second mortgage at 4.75% |
| SmartBuy 3.5% Option | Approximately $15,750 | Forgivable or repayable depending on the selected SmartBuy structure |
| SmartBuy 5% Option | Approximately $22,500 | Available under certain SmartBuy structures, subject to program and underwriting rules |
| USDA Loan | Possible zero down payment | Property and household income eligibility required |
| VA Loan | Possible zero down payment | VA eligibility required |
What Kentucky Buyers Should Do Next
If you were counting on the 2026 Welcome Home Grant, the next step is not to wait around. The better move is to get a full mortgage review and determine which available program gives you the lowest realistic cash-to-close.
- Confirm your true mortgage credit scores.
- Review your income, job history, and debt-to-income ratio.
- Check whether the property is eligible for USDA financing.
- Review KHC income limits and down payment assistance eligibility.
- Review whether SmartBuy DPA is available for your FHA, USDA, or HUD 184 loan scenario.
- Compare FHA, VA, USDA, KHC, SmartBuy, and conventional options side by side.
- Ask for a real payment and cash-to-close estimate before making an offer.
Need Help Finding the Best Kentucky Home Loan Option?
The 2026 Welcome Home Grant is closed, but you may still qualify for USDA zero down, KHC down payment assistance, SmartBuy DPA, FHA 3.5% down, VA zero down, or other low-cash-to-close mortgage options.
Call or text Joel Lobb at 502-905-3708 and I can review your income, credit, debts, property location, and estimated payment to see which program gives you the best path forward.
You can also start here: Kentucky Mortgage Pre-Qualification App
Frequently Asked Questions
Is the 2026 Welcome Home Program still available?
No. The 2026 Welcome Home Program is closed. New reservations are no longer being accepted for the 2026 funding cycle.
Can I still buy a house in Kentucky with no money down?
Possibly. USDA Rural Housing and VA loans may offer zero-down financing for eligible borrowers. USDA depends on property location and household income. VA depends on military eligibility.
Is KHC down payment assistance a grant?
KHC Regular DAP is not a grant. It is a repayable second mortgage that may provide up to $12,500 in assistance for qualified Kentucky buyers using a KHC first mortgage.
What is the 2026 KHC purchase price limit?
KHC currently lists the Mortgage Revenue Bond and Secondary Market purchase price limit at $566,354 for new and existing homes.
What is the SmartBuy Down Payment Assistance program?
SmartBuy is a down payment assistance program that can be paired with eligible government first mortgages, including FHA, HUD 184, and USDA loans. It is not available for conventional first mortgages.
Is SmartBuy only for first-time home buyers?
No. According to the SmartBuy program matrix, there is no first-time home buyer restriction.
Is SmartBuy forgivable?
SmartBuy has forgivable and repayable options. The 3-year and 5-year forgivable options may be forgiven if program requirements are met, including no 90-day or greater delinquency during the required payment period. The repayable options are not forgivable.
What credit score is needed for SmartBuy?
The SmartBuy matrix shows a minimum representative credit score of 640 for the forgivable options and 660 for the repayable options. Blended score qualification may also be available in certain borrower scenarios.
Can FHA be used with down payment assistance?
Yes, FHA loans may be paired with approved down payment assistance, gift funds, and seller-paid closing costs, subject to program and lender guidelines.
Should I wait for the next Welcome Home Grant cycle?
That depends on your situation. If you qualify for USDA, VA, KHC, SmartBuy, FHA with seller concessions, or another assistance option now, waiting may not be the best move. Home prices, interest rates, inventory, and assistance program guidelines can change. The right answer depends on your numbers.
Joel Lobb
Mortgage Loan Officer
NMLS #57916
EVO Mortgage | Company NMLS #1738461
Call/Text: 502-905-3708
Email: kentuckyloan@gmail.com
Website: www.mylouisvillekentuckymortgage.com
Equal Housing Lender. This is not a commitment to lend. All loans are subject to credit approval, underwriting approval, property approval, appraisal, title review, and program requirements. Programs, rates, terms, and guidelines are subject to change without notice. This website is not affiliated with, endorsed by, or acting on behalf of FHA, VA, USDA, HUD, Fannie Mae, Freddie Mac, Kentucky Housing Corporation, Federal Home Loan Bank of Cincinnati, or any government agency. Licensing information available at www.nmlsconsumeraccess.org.
Kentucky First-Time Home Buyer Programs | USDA, FHA, VA & KHC Loans 