Down Payment Path

Down Payment Assistance Programs in Kentucky

Kentucky provides several programs to assist homebuyers with down payments and closing costs, making homeownership more accessible for a wide range of buyers. These initiatives are designed to benefit both first-time and repeat buyers across the Bluegrass State.

Kentucky Housing Corporation (KHC) Regular Down Payment Assistance Program

The KHC Regular Down Payment Assistance Program offers financial aid to help cover upfront homebuying costs.

  • Provides up to $6,000 as a repayable second mortgage.
  • Repayment terms include a 10-year loan at a low fixed interest rate.
  • Available for FHA, VA, USDA, and conventional loans through KHC-approved lenders.
  • Open to eligible buyers meeting income and purchase price limits.

KHC Hardest Hit Fund Down Payment Assistance

The Hardest Hit Fund (HHF) Down Payment Assistance Program supports buyers in specific counties affected by economic challenges.

  • Offers up to $10,000 in assistance as a forgivable loan.
  • Loan is forgiven after five years if residency requirements are met.
  • Available in select counties to promote local homeownership.

USDA Rural Development Loans

For buyers in rural areas of Kentucky, the USDA Rural Development Loan provides financing with no down payment requirement.

  • Open to low- and moderate-income buyers in USDA-designated rural areas.
  • Offers competitive interest rates and flexible credit requirements.
  • Can be paired with other assistance programs to cover closing costs.

Mortgage Credit Certificate (MCC)

The Mortgage Credit Certificate program offers valuable tax benefits for homebuyers.

  • Allows buyers to claim a federal tax credit for a portion of their annual mortgage interest.
  • Can be combined with KHC and other down payment assistance programs.
  • Income and purchase price limits apply, with higher limits in targeted areas.

Local Assistance Programs

Many cities and counties in Kentucky provide additional resources for homebuyers to reduce upfront costs.

  • Programs in areas like Louisville, Lexington, and Bowling Green often include grants or low-interest loans for down payment and closing costs.
  • Some initiatives provide enhanced benefits for public service workers or buyers purchasing in revitalization areas.
  • Eligibility and assistance levels vary by location.

Kentucky’s down payment assistance programs are designed to make homeownership more affordable by addressing the financial challenges of upfront costs. Whether you are purchasing your first home or upgrading, these resources can help you achieve your goal of owning a home in the Bluegrass State.