How to buy a house in Kentucky with Zero Down Payment Mortgage Loan


 

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.

 

—

Hope your day is full of sunshine😊

Joel Lobb  Mortgage Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708
fax: 502-327-9119
email: kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/

 
NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574
 

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).

 

Author: Louisville Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Zero Down Payment Home Loans

I have helped over 589 Kentucky families buy or refinance their home over the last 18 years. Realizing that this is one of the biggest, most important financial transactions a family makes during their lifetime, I always feel honored and respected when I am chosen to originate their personal home loan. You can count on me to deliver on what I say, and I will always give you honest, up-front personal attention you deserve during the loan process. I have several advantages over the large banks in town. First, I can search and negotiate for your loan options through several different mortgage companies across the country to get you the best deal locally. Where most banks will offer offer you their one set of loan products. I have access to over 10 different mortgage companies to broker your loan through to get you the best pricing and loan products that may not fit into the bank's program due to credit, income, or other underwriting issues. You will not get lost in the shuffle like most borrowers do at the mega banks; you're just not a number at our company, you are a person and we will treat you like one throughout the entire process. Give us a try or let us compare your options on your next mortgage transaction. Call me locally at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications. Email me at kentuckyloan@gmail.com with your questions I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky. For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance. Customer Testimonials 😍😍😍 We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel's website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services. Angela Forsythe "We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel's website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him." September 2016 Monica Leinhardt "We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan. Kayle Griffin “Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010 Tim Beck “Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.” September 1, 2010 Nancy Nalley “I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them. August 23, 2012 Jon ClarK “Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011 RICHARD VOLZ , Residential Sales , Remax Foursquare Realty “When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say's they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!” August 21, 2010 Stacie Drake "We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else." Melody Glasscock March 2014 Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn't expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS. Cee Bellisle August 2017 Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours. Anderson Johnson April 2018 Wow, what a great loan officer. I was referred to him by our agent and he was great to work with. We used him for a USDA no money down loan in Shelby County and we were really impressed. We were afraid we could not buy a home since we did not have money saved for a down payment, but Joe l was able to get us a zero down loan and we even got our appraisal fee and good faith deposit back at closing. We actually got money back at closing!!! I Can't think him enough. Our family moved from our apartment in the south end of town to get our own home with 5 acres for our kids and 2 dogs, at a payment that is equal to our rent payment also. .Thanks Again Joel. May god bless you Patty Locker We contacted Joel about buying a house on our move from Ohio for my husband's job transfer with Ford. We put a lot of trust in him since we were new to the area and first time home buyers in the Louisville KY market, and he always delivered on what he said. It took us a while to find a home due to the lack of homes, but once we got one, he was always quick to respond our questions via text or email ,and kept us informed through the process. We got to meet him at the closing and he was super nice and even got us a closing gift for our home which we didn't expect at all. Super nice guy 😀!!! I would definitely recommend him for a local Home loan in the Louisville area. pam dolby I got a VA loan with Joel and he was great. He is an ex-army guy so he could relate to my past experiences of being a veteran and moving around the country a lot. I had some credit issues that required a little extra work but Joel was able to find A VA lender to approve my situation as far as having past bad credit problems and a lower credit score. We closed yesterday on our home here in Louisville and we could not be happier. We finally have a home of our own thanks to Joel . I would definitely recommend him for a mortgage loan. Great experience and closed 8 days before expected close date so we were able to move in early. larry summit I contacted Joel about the $10,000 KY Housing Grant last month and we were able to get it and I just closed on my home. He was great to work with and if you are a first time home buyer here in Louisville, I would definitely contact him. I met him at his office and he was very nice and knowledgeable and kept me informed through the process. No surprises either so I was very happy. I am new homeowner thanks to Joel . Joel Lobb Senior Loan Officer American Mortgage Solutions, Inc. 10602 Timberwood Circle Suite 3 Louisville, KY 40223 phone: (502) 905-3708 Fax: (502) 327-9119 kentuckyloan@gmail.com http://www.mylouisvillekentuckymortgage.com/ Company ID #1364 | MB73346E This website is not an government agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency. http://www.nmlsconsumeraccess.org/ Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. NMLS#57916 http://www.nmlsconsumeraccess.org/ . The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

2 thoughts on “How to buy a house in Kentucky with Zero Down Payment Mortgage Loan”

  1. Pingback: Kentucky First-Time Homebuyer Loan Programs for FHA, VA, KHC and USDA Mortgage Loans in Kentucky
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