How To Buy A House In Kentucky With Zero Down Payment!

 

There are several programs in Kentucky  to help homebuyers purchase a house with zero down payment. The various Kentucky down payment assistance programs in Kentucky, including KHC, FHA, VA, USDA, UWM's $15,000 Welcome Home Grant, the $25,000 Kentucky Welcome Home Grant, and the 5% grant. We will also detail the qualifying criteria, such as credit score, income, work history, and assets.

Kentucky Housing Corporation (KHC) Programs

KHC FHA Loan

The Kentucky Housing Corporation offers down payment assistance programs that work in conjunction with Kentucky FHA loans. These programs aim to help first-time homebuyers achieve homeownership with minimal upfront costs.

Qualifying Criteria:

• Credit Score: Minimum 620
• KHC Income Limits: Varies by county and household size
• Work History: Steady employment for at least two years
• Assets: Limited to ensure assistance goes to those in need
• Minimum down payment of 3.5% and 6% seller concessions
• Max debt to income ratios of 40 and 50% respectively
•  

KHC Down Payment Assistance Programs

KHC offers several down payment assistance options, including a regular DPA loan of  up to $10,000. These loans are repayable over ten years at 3.75% over 10 years and cannot be subordinated and paid off if you refinance or sell the home before they are paid off. No prepay penalty

Qualifying Criteria:

• KHC Credit Score: Minimum 620
• Income Limits: Varies by county and household size
• Work History: Stable employment history required
• Assets: Applicants must meet asset limitations
• Loan limits changes every year.

Kentucky FHA Loans

Kentucky FHA loans are insured by the Federal Housing Administration and require a lower down payment of 3.5, but when paired with down payment assistance programs, Kentucky homebuyers can potentially buy a home with zero down payment.

Qualifying Criteria:

• Credit Score: Minimum 580 (with 3.5% down payment), 500-579 (with 10% down payment)
• Income Limits: None, but debt-to-income ratio must be manageable
• Work History: Steady employment for at least two years
• Assets: Must demonstrate sufficient assets to cover closing costs and reserves
• Loan limits for FHA loans. Changes every year

Kentucky VA Loans

Kentucky VA loans are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. These loans often come with zero down payment requirements.

Qualifying Criteria:

• Credit Score: No minimum, but most lenders prefer at least 580 to 620
• Income Limits: None, but borrowers must have stable income
• Work History: Typically, two years of consistent employment
• Assets: Sufficient to cover closing costs; no down payment required
• Residual Income Requirements
• Debt ratio set by VA...No max debt ratio, but most like to see a 43% backend ratio on a manual underwrite but can go higher on an AUS automated underwriting approval through DO or LP
• Max VA loan limits changes every year.

Kentucky USDA Loans

Kentucky USDA loans are backed by the U.S. Department of Agriculture and are available to Kentucky homebuyers in eligible rural areas of Kentucky. These loans offer 100% financing. $0 down payment

Qualifying Criteria:

• Credit Score: No minimum score but most KY Rural Housing Lenders will a 620 to 640 minimum credit score
• Income Limits: Varies by county and household size--
• Work History: Stable employment for at least two years
• Assets: Limited to ensure assistance goes to those in need-
• No purchase price or loan limits, just income limits for each Kentucky County.
• Max income limits changes every year
• Debt to income rate usually around 31% on front end and 45% max on back-end ratio ...
• Has to be run through GUS, the Guarantee Underwriting system for initial pre-approval

$15,000 Welcome Home Grant

United Wholesale Mortgage (UWM) offers a $15,000 Welcome Home Grant to help eligible homebuyers with down payment and closing costs.

Qualifying Criteria:

• How does the $15,000 Down Payment Assistance work in Kentucky for Homebuyers
  • First  mortgage meets Loan to Value requirements for Fannie Mae or Freddie Mac ltv
  • Mortgage lenders in Kentucky  provides a second lien mortgage for 3% of the purchase price, up to $15,000
  • Second lien has no monthly payment requirement and no interest-no payments to lender
  • Second lien balance is due when the first lien loan is refinanced or paid off, whichever comes first
  • Payments on the second lien can be made throughout the loan term, but are not required

  How Kentucky borrowers can qualify for the $15,000 Down Payment Assistance:

  • Kentucky Borrowers must be at or below 80% of the Area Median Income (AMI) for the Kentucky mortgage property address they are buying and meet Home Possible® guideline requirements
    • For very-low income borrowers whose qualifying income is at or below 50% AMI (VLIP borrowers), they will receive a $2,500 credit as part of the 3% assistance
      • This credit does not need to be repaid by the borrower and lowers their debt obligation from the second lien
    • 620+ FICO and LTV must be equal to or greater than 95% LTV, up to 97%

  —OR—

  • At least one Kentucky home mortgage borrower must be a first-time homebuyer and meet HomeOne® and lender’s guideline requirements
    •  

$25,000 Kentucky Welcome Home Grant

The $25,000 Kentucky Welcome Home Grant is designed to provide substantial assistance to homebuyers for down payment and closing costs.

Qualifying Criteria:

• All Kentucky first-time homebuyers must complete a homebuyer counseling program (but you don’t have to be a first-time homebuyer to participate).
• Homebuyers must contribute at least $500 of their own funds toward down payment and closing costs (60% of these funds may be received as a gift).
• All funds are reserved for specific homebuyers purchasing specific homes and can not be transferred to other homebuyers or to other homes.
• Kentucky Welcome Home Grant Funds can be used with Kentucky FHA, USDA, VA, Home Ready, and other Conventional products.
• Homebuyers must remain in the home for 5 years or prorated repayment of the grant may be required.
• More information from the Federal Home Loan Bank of Cincinnati can be found at https://www.fhlbcin.com/housing-programs/welcome-home-program/.

•  Kentucky Welcome Home Grant program, providing eligible homebuyers with grants of up to $25,000. The program, offered by the Federal Home Loan Bank of Cincinnati (FHLB Cincinnati), aims to support honorably discharged veterans, surviving spouses, and active-duty military personnel, along with other qualified home seekers.

• Funds are available starting March 1 at 8am ET, and are available until all funds have been reserved. The FHLB Cincinnati not only assists service personnel with up to $25,000 grants but also extends up to $20,000 grants to other qualified homebuyers.

  To learn more about the application process and eligibility criteria, visit www.fhlbcin.com.

  Don't miss out on this incredible opportunity! Contact us at phone or text  at 502-905-3708

  Act fast, as funds are limited!---As of 5/22/2024 Funds for Welcome Home Grant in Kentucky has been depleted. ☹

5% Kentucky Home Buyer Grant

Some lenders in Kentucky offer a 5% grant program that provides assistance based on the purchase price of the home. This grant can be used for down payment and closing costs.

Qualifying Criteria:

• Down payment assistance products to help Kentucky home buyers purchase the home of their dreams!
  

  Key Benefits

  • Utilize with either Kentucky FHA or Kentucky USDA loan to purchase a home
  • Up to 5% of purchase price can be used towards borrower’s down payment, closing costs, or to lower rate on the underlying mortgage.
  • Fully forgivable or repayable options
  • No income or first-time homebuyer restrictions
  • SmartBuy Down Payment Assistance
    5 Year Forgivable DPA 30/10 Repayable  DPA Closing Cost Assistance – Repayable

    Down payment assistance (DPA) program
    requiring the delivery of the underlying
    30 year FHA or USDA loan with the
    subordinated second lien. The second
    lien is fully forgiven after 5 years if the
    borrower meets criteria.

  • Down payment assistance (DPA)
    program with a repayable second
    lien. The second is not forgivable
    and is originated with a 30 year
    term due in 10 year balloon.
  • Closing cost assistance (CCA) program
    with a repayable second lien. The second
    is not forgivable and is originated with a
    30 year term due in 10 year balloon.
  •  
  • Borrower Eligibility Based on FHA or USDA program guidelines (USDA
    Not required to be first-time homebuyers
    No income restrictors beyond USDA guidelines

    Credit Score Minimum Representative Score of 620
    All Borrowers must have at least one
    score

Navigating the various down payment assistance programs available to Kentucky homebuyers can be complex, but with the right information, you can find the program that best fits your needs.

Whether you are a Kentucky first-time homebuyer or a veteran, these programs can help you achieve the dream of homeownership with little to no down payment. Be sure to review the specific qualifying criteria for each program and consult with a knowledgeable mortgage broker, such as Joel Lobb, to guide you through the process and help you secure the best assistance available.

If you have any questions or need further assistance, feel free to contact Joel Lobb at email or visit his website for more information.

 

--

Joel Lobb  Mortgage Loan Officer

 

Text/call: 502-905-3708

email: kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/

 

NMLS 57916  | Company NMLS 1738641

 

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).

 

Kentucky First Time Home Buyer Loan Programs

Kentucky First Time Home Buyer Loan Programs

What is a First Time Buyer Loan?

Many people dream of owning a home but the home loan process can be confusing for many first time home buyers. Mortgage lenders offer first time buyers with many home loan options and assist the buyer in finding the best home loan for them. First time home buyer programs can offer lower interest rates, low down payments, or reduced taxes.

FHA and VA Loans for First Time Buyers Apply Online

First time homebuyers often experience the most difficulty amounting a significant down payment and everyone should have the opportunity to buy a home. For this reason the Federal government has developed two loan programs to assist homebuyers that have a little or no down payment. These programs are called the Kentucky Federal Housing Administration (FHA) and the Kentucky Veteran’s Administration (VA). These programs are not solely intended for first time home buyers; your home loan advisor will be able to determine if you qualify and if so which program is acceptable for your needs. Kentucky FHA and VA loans can be especially advantageous when combined with a HFA or MCC first time homebuyer program.

Who is Eligible for a First Time Buyer Loan?

Kentucky First time home buyer programs are designed to help borrowers who may not have enough money to pay the full cost of the down payment or the closing costs on a mortgage. These programs make obtaining a mortgage more cost effective. There are even programs specifically for residents of each state. First time home buyer programs are available to those who have not owned a home for the past three years.

Community Home Buyer Programs

Kentucky  Community homebuyer programs reduce the down payment the borrower must pay to 3%, which must be the borrower’s own funds. The closing costs can be gift funds, a grant, or seller assistance up to 3% of sale price. This type of home loan requires the home buyer to take a class on home ownership in their state. Upon completion of the class, the homebuyer will receive a certificate that reduces the cash requirement and expands the qualification ratios. Community homebuyer programs have been making it possible for many people to have the opportunity to buy a home.

What is Escrow?

Escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of an event. In simpler terms, escrow is where the transaction changes hands and prevents the seller from not receiving the money from the sale and prevents the buyer from not receiving the home that was purchased. Escrow is important to both buyers and sellers during the mortgage process.

Mortgage Credit Certificates

A Mortgage Credit Certificate or MCC from KHC -Kentucky Housing Corp is a certificate awarded by your local government agency authorizing the home loan borrower to take certain federal income tax credits. The credits awarded help to free up funds and make the monthly home loan payments more affordable for the homeowner. First time home buyers are typically the candidates eligible for an MCC but in special cases that you may discuss with your home loan advisor this requirement may be waived. Income and purchase price requirements also vary state to state and should be covered in conversations with your home loan representative.

Louisville Ky First Time Buyers Program

 First time buyer programs in Louisville can make securing a Louisville home loan easier and more affordable. Contact us at 502-905-3708 for your Louisville Ky  mortgage to begin your first time buyer loan.

Grants for First Time Home Buyers in Kentucky

First Time Home Buyer Grants Kentucky

New Income and Purchase Price Limits

Kentucky Housing Corporation (KHC) is announcing new income and purchase price limits for Secondary Market products and KHC's Homebuyer Tax Credit. Things to know:

• New limits begin with new reservations on or after May 1, 2021.
• Most county income limits decreased, with a few exceptions. Be sure to check the income limits for the counties you serve.

For Secondary Market products, the purchase price will increase to $346,644. For the Homebuyer Tax Credit, the purchase price will increase to $311,997. KHC's program guides on AllRegs will be updated Saturday, May 1, 2021.

 

Refer to Down Payment Assistance Programs Grid -- PDF

• Only homebuyers receiving a first mortgage through KHC are eligible for DAP.
• All DAP loans take a lien position.
  • Show as subordinate financing in AUS.
  • KHC DAPs are not gifts or grants.
• Regular and Affordable DAP are continuously funded and do not run out of monies.
  • Borrowers under the Secondary Market income and purchase price limits are eligible for Regular DAP. Refer to Secondary Market Gross Annual Applicant’s Income Limit Grid -- PDF
  • For borrowers to qualify for the Affordable DAP, they must be under the Affordable DAP income limits. Refer to Affordable DAP Gross Annual Applicant’s Income Limit Grid -- PDF
• KHC will only subordinate a DAP when the first mortgage is coming back through KHC. Refer to KHC’s Subordination Request Form -- PDF

Lender can also refer to the DAP Quick Reference Card – PDF for more information.

 

Conventional

Refer to Conventional First Mortgage Programs Grid – PDF

Mortgage Insurance with Conventional Preferred Program

• Charter coverage with HFA Preferred Program.
• Standard Coverage with Preferred Plus 80.
• KHC will order all MI certificates for TPO Lenders
  • TPO Lenders can choose the MI company when making a loan reservation.
• Delegated/Correspondent Lender will order their own MI certificates.
  • Provide final MI certificate.
• Listed below are the MI Companies and the portal names to access the conventional Preferred program.
  • Arch MI.
  • Essent.
  • Genworth: Simply Underwrite.
  • MGIC: MGIC Go.
  • Radian: One Underwrite.
  • UG.
• Borrower must meet both KHC and MI company guidelines.
• Lender has the option of a Single Pay Upfront option.
  • Paid by the borrower or the lender.
• Mortgage insurance on HFA Preferred and Preferred Plus 80 with Manufactured Housing.
  • MGIC and Genworth allow 95% LTV / 105%CLTV.
  • ARCH, UG and Radian allow 95% LTV / 95%CLTV.
  • Essent is not insuring Manufactured Housing.

Lender can also refer to the First Mortgage Program Quick Reference Card – PDF for more information.

Delegated/Correspondent Lenders Conventional Fannie Mae Requirements

• Lender must comply with all Fannie Mae requirements for origination, processing, underwriting, pre-funding review, closing and post-closing.
• Any significant pre-funding findings must be reported to KHC within 30 days.
• KHC will purchase a High Price Mortgage Loan (HPML).
• Lender will verify employment on all borrowers within 10 business days prior to the note date.
• Lender will upload appraisal to the Uniform Collateral Data Portal (UCDP) system.
• Lender will complete the submission to Uniform Closing Dataset (UCD) and proved a copy of successful UCD Findings Report in the Closed Loan File uploaded to KHC for loan purchase.

TPO Lenders Conventional Fannie Mae Requirements

• Lender will verify employment on all borrowers within 10 business days prior to the note date.
• KHC will upload appraisal to the Uniform Collateral Data Portal (UCDP) system and complete the submission to Uniform Closing Dataset (UCD).

Government

Refer to Government First Mortgage Programs Grid-- PDF

Refer to FHA Refinance Programs Grid -- PDF

Refer to RHS Streamlined-Assist Refinance Program Grid—PDF

Refer to VA Programs Grid - PDF

Eligibility

• Must be a U.S. citizen or have legal status to be in the U.S. Refer to specific agency guidelines.
• KHC does not allow non-occupying co-borrowers or co-signors.
• Applicant’s gross annual income must be at or below Secondary Market Income Limits (compliance income) per county location of the property.
  • Refer to Secondary Market Gross Annual Applicant’s Income Limit Grid – PDF

Compliance Income Limits

• Compliance income is the gross annual income with the sum of the total anticipated income from all sources received by the applicant(s) during the 12-month period commencing with the date of initial occupancy (closing).
• The following should be counted in compliance income: Base pay, overtime, bonuses, commission, child support/alimony, profit sharing, tip income, non-taxable income (SSI, Disability), car allowances, and schedule C or E income.
• Non-borrowing occupant’s income is not considered in compliance income.
• Use KHC’s Income Calculator on KHC’s website (under Lender Resource /Calculator tab) to determine compliance income.
  • This calculator is required on all loan submissions.

Effective Income

• Effective Income is qualifying income. This includes income from the applicant(s) that is considered stable (continuing for at least three years) and is used to calculate debt ratios.

 

Insuring Agency Credit Standards

• KHC follows the federal insuring agency guidelines. KHC requires all lenders to comply with the general Ability-To-Repay (ATR) standards and consider DTI in making reasonable, good faith determinations that the consumer has the ability to repay the loan. KHC has specific credit standards and maximum ratio requirements listed down below.

Minimum Credit Score

• 620 minimum credit score required on all government first mortgage programs (FHA, VA, and RHS).
• 660 minimum credit score required on Conventional HFA Preferred first mortgage programs.

Automated Underwriting System (AUS)

• FHA accepts AUS Approval through Desktop Underwriter (DU) and Loan Prospector (LP) or a manual underwrite per HUD guidelines.
  • Manual Underwriting still requires a minimum 620 credit score and a VOR or LOE regarding not paying rent.
  • Refer to the KHC’s FHA Manual Underwrite Matrix - PDF
• VA accepts an AUS Approval thru Desktop Underwriter (DU) and Loan Prospector (LP) or a manual underwrite per VA guidelines.
• RHS allows for a manual underwrite if lender is unable to get and AUS approval through Government Underwriting System (GUS).
  • 29/41% maximum debt ratios for manual underwriting without GUS approval for RHS.
• Conventional HFA Preferred and Preferred Plus 80 programs require a DU approve/eligible.
  • LP is not accepted on these conventional programs.
• FHA Rate Term Refinance requires an AUS approval (DU or LP).
• FHA Streamline and Simple Refinance – do not run AUS.
• RHS Streamlined-Assist Refinance Program – do not run GUS.
• For all KHC’s DAPs, the second mortgage amount is shown as subordinate financing.

Maximum Debt Ratios

• All loan programs can go up to 40/50% with AUS approval.
• Judgements, collections, bankruptcy, charge-offs, short sales, and foreclosures follow insuring agency guidelines.

Age of Credit Documents

• Maximum age for government first mortgage credit documentation is 120 days.
• Maximum age for conventional first mortgage credit documentation is 4 months.

IRS Form 4506-T

• Required to be executed by the borrower at the time of application or closing.

FIRST TIME BUYER PROGRAMS FOR JEFFERSON COUNTY KY Conventional Insured by approved mortgage insurance company. Minimum credit score of 660 or better. Quick turnaround time, 20 percent down payment and no up-front or monthly mortgage insurance. 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. Down Payment and Closing Costs Assistance Regular Down payment Assistance Program (DAP) Purchase price up to $243,000. Assistance in the form of a loan up to $6,000 in $100 increments. Repayable over a ten-year term at 6 percent.  A DAP of $6,000 over ten years at 6 percent interest would equal a payment of $66.61. Available to all KHC first-mortgage loan recipients. 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. 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.

THANKS,

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com


107 South Hurstbourne Parkway*
Louisville, KY 40222*

http://mylouisvillekentuckymortgage.com 

Fill out my form!

Kentucky First Time Home Buyer Program Specialist-Zero Down Loans

Mortgage Revenue Bond (MRB) First Mortgage Products
Eligibility:  Must be a first-time home buyer, unless purchasing a single-family dwelling in a targeted county.  Purchase price can be no more
than $243,000 or $195,700 when any form of HOME DAP is used.  Gross annual household income must be within applicable limits in effect.
All non-borrowing occupants age 18 or older must disclose income and complete KHC Form 98.  Mortgage loan must be a new mortgage
loan, not a refinance.
KHC’s First Mortgage Government Loan Products
Federal Housing Administration (FHA)
 Minimum 640 credit score required.
 Financing to 96.50% of lesser of sales price or appraised value.
 All KHC DAPs and other KHC-approved secondary financing may be used.
 Maximum 6% seller-paid items.
 Maximum ratios of 40/45 with AUS approval.
 FHA’s Appraiser Independence began with case numbers on or after February 15, 2010.  Please see Mortgagee Letter 2009-28 for full
details.
 All borrowers must be scored by TOTAL.
 Lender must follow the FHA maximum mortgage limits for particular area – see https://entp.hud.gov/idapp/html/hicostlook.cfm.
 Must follow Upfront and Annual Mortgage Insurance Premiums Guidelines (see information below).
Upfront and Annual Mortgage Insurance Premiums
Loan Terms > 15 years
Beginning with case numbers assigned on or after Monday, October 4, 2010
LTV
Less than or Equal to 95%  1%  annual          .85 monthly
> 95%  1% annual          .90 monthly
Conventional
 Minimum 660 credit score required.
 Maximum loan-to-value (LTV) ratio is 80%.
 Maximum ratios 40/45 with AUS approval.
 No down payment assistance products may be used.  Borrower must meet down payment requirements with their own funds or a gift.
 Pre-purchase education required as per AUS findings
 Not available for manufactured housing.
 Appraiser Independence required (see page 3).
 KHC does not presently have a product for 81% LTV or greater.
Rural Housing Services (RHS)
 Minimum 640 credit score required.
 Financing to 100% of the appraised value, plus guarantee fee of 3.5%.
 All KHC DAP programs and other KHC-approved secondary financing may be used.
 No maximum on seller-paid items.
 Ratio requirements and guarantee fee per agency guidelines.
 KHC will accept Government Underwriting System (GUS) Findings.
Veteran’s Administration (VA)
 Minimum 640 credit score required.
 Maximum ratios 40/45% with AUS approval.
 Financing to 100% of the lesser of the appraised value or sale price.
 All KHC DAP programs and other KHC-approved secondary financing may be used.
 Maximum 4% seller-paid items.
 Follow agency guidelines for ratio requirements and funding fee.
KHC Program Guide – Real Estate Agents – January 1, 2011  

KHC Mortgage Interest Rates as of 01/07/2011

January 4, 2011Louisville Kentucky MortgageEditLeave a comment

Interest Rates

KHC Mortgage Interest Rates as of 01/07/2011, 1:00 p.m. ET

Rates subject to change without notice.

700+ Credit Score Mortgage Revenue Bond (MRB) Interest Rates

• KHC-funded down payment assistance not available with these rates

Loan Type	Regular Rate	Zero-Point Rate
*Government Rates only	4.125%	4.500%

640+ Credit Score Mortgage Revenue Bond (MRB) Interest Rates

• KHC-funded down payment assistance may be utilized with these rates

Loan Type	Regular Rate	Zero-Point Rate
*Government Rates only	4.375%	4.750%

* Government includes FHA, RHS, and VA.

660+ Credit Score Mortgage Revenue Bond (MRB) Conventional Interest Rates

Loan Type	Regular Rate	Zero-Point Rate
*Conventional Rates	4.125%	4.500%

• Maximum LTV 80%**
• No pre-purchase education required
• No down payment assistance allowed – must be borrowers’ own funds or gift funds
• AUS required
• No manufactured housing allowed

**At the present time, KHC is not offering a conventional product at 81% or greater LTV.

KHC Mortgage Interest Rates as of 01/03/2011

502-905-3708 or email us at kentuckyloan@gmail.com for Free Application