Down Payment and Closing Cost Assistance

Your down payment, closing costs (costs and fees that are part of receiving a home loan) and prepaids (set-up of escrow accounts for future payment of taxes and insurance) are three different costs generally associated with buying a home.

Kentucky Housing recognizes that these costs 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.

Down Payment Assistance Programs for Mortgage Revenue Bond (MRB) Programs

• Regular Down payment Assistance Program (DAP)
  • Purchase price up to $258,000.
  • Assistance in the form of a loan up to $4,500.
  • Available to all KHC first mortgage loan recipients who are first-time homebuyers.
  • After the initial deferral period, the loan will fully amortize over ten years, starting July 1, 2010, at the current first mortgage interest rate not to go below 6 percent.
• 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).

Down Payment Assistance Programs for Secondary Market Programs (for repeat homebuyers only)

• KHC's Second Mortgage Product
  • Purchase price up to $316,000.
  • Assistance in the form of a loan up to $4,500.
  • Available to mortgagors whose gross annual income does not exceed KHC's regular income guidelines.
  • After the initial deferral period, the loan will fully amortize over ten years, starting July 1, 2010, at the current first mortgage interest rate not to go below 6 percent.

 

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.