First-Time Home Buyer Programs in Kentucky

Kentucky Housing Corporation (KHC) Programs:

Conventional Preferred Program:

Eligibility: Open to first-time homebuyers (no homeownership in the past three years) and repeat buyers statewide.
Offerings: Provides a 30-year fixed-rate conventional mortgage with a 3% down payment and reduced-rate mortgage insurance; can be paired with KHC down payment assistance.
Requirements:

• Income must not exceed county-specific limits (e.g., $143,500 for a 1-2 person household in Jefferson County as of 2025).
• Minimum credit score of 660.
• Debt-to-income ratio capped at 50%.
• Homebuyer education course required for first-time buyers.
• Purchase price limit of $481,176.

Regular Down Payment Assistance Program (DAP):

Benefits: Offers up to $10,000 as a repayable second loan (3.75% interest, 10-year term) for down payment and closing costs; available to all KHC first-mortgage recipients.
Eligibility: Must use a KHC first mortgage; income and purchase price limits apply (same as Conventional Preferred).

Affordable DAP:

Description: Provides up to $7,500 as a repayable second loan (1% interest, 10-year term) for lower-income first-time buyers; designed for down payment and closing cost support.
Requirements: Must pair with a KHC first mortgage; income capped at 80% of area median income (e.g., $69,700 for a family of four in most counties).

Local Programs:

Louisville

Louisville Metro Down Payment Assistance: Offers up to 20% of the purchase price (max varies by need) as a partially forgivable loan (0% interest, 50% forgiven after 5-15 years based on amount); open to first-time and repeat buyers with income below 80% AMI.

Lexington

First-Time Homebuyer Program: Provides non-repayable subsidies or 0-2% loans via REACH Inc. or Habitat for Humanity; targets low- to moderate-income first-time buyers; income limits apply (e.g., $56,650 for a single person).

Hopkinsville

Hopkinsville Affordable Homeownership Program: Offers up to $10,000 as a forgivable second mortgage (forgiven after 5 years) for low-income first-time buyers; must use a 30-year fixed-rate mortgage.

Additional Information:

• Mortgage Credit Certificate (MCC): Provides a federal tax credit of up to 20% of annual mortgage interest (max $2,000 yearly) for first-time buyers or those in targeted areas; fee applies; combinable with KHC loans.
• FHA Loans: Minimum 3.5% down payment, suitable for credit scores as low as 580 (10% if below 580).
• USDA Loans: Zero-down payment for rural Kentucky areas; income limits apply.
• VA Loans: Zero-down payment for eligible veterans or active military.