Kentucky Housing Corporation updated guidelines June 2011

Kentucky Housing Corporation updated guidelines June 2011


Lottery for New Construction Program for Single Parent, Disabled, or Elderly Households

Funds for the New Construction Program for Single Parents, Disabled, and Elderly Households will soon be available.  The funding source this year will be New Bond funds, which means borrowers must meet all New Bond guidelines, with the exception of purchase price and income limits (listed below). 

Funds will be available to populations that meet the following program guidelines:

  • First mortgage loan (FHA, VA, and RHS only – no conventional) with 30-year fixed interest rate of 1 to 6 percent.  The rate will be the highest for which the applicant qualifies at ratios of 29/41.
  • New construction property only.
  • Maximum purchase price of $115,000.
  • Eligible households include:
    • Single parents with at least one dependent child under the age of 18 living in the household.
    • Households with at least one member with a permanent disability who is receiving some form of disability income (SSI, SSDI, etc.).
    • At least one of the home buyers age 62 or older.
    • Gross annual household income less than $28,000 for 1-2 persons or $33,000 for 3 persons or more.
  • Regular rate program with points required.
  • Borrowers must have minimum credit score of 640 and AUS approval.
  • Regular Down payment Assistance Program is available for down payment and closing costs.

Reservations will be selected through a lottery system.  The lottery will be open for reservations Monday, July 25, through Wednesday, July 27.  Winners will be notified by e-mail by Friday, July 29.  All applicants MUST have a fully-executed contract when the loan is reserved.

Welcome Back HOME Family and HOME Special!

HOME Funds will be replenished Friday, July 1, 2011.  Reservations on or after July 1 will have access to HOME Family or HOME Special Down payment Assistance Programs, each up to $10,000!  These funds are available on a limited basis, first-come, first-served.  Full program parameters are on page 8 of the MRB Program Guide.


Offer Your Borrowers a “Life of Loan” Tax Credit

If you are not an approved Mortgage Credit Certificate (MCC) lender with KHC, you are missing out!  KHC has received a new allocation of funds for this tax credit.  Becoming an MCC-approved lender enables you to offer your borrowers this valuable “Life of Loan” Tax Credit.

An MCC allows the borrower to convert 25 percent of their mortgage interest paid annually to a tax credit.  A home buyer with a 5 percent interest rate on a fixed, 30-year mortgage of $125,000 would pay approximately $6,250 in interest payments for the first year without an MCC.  With an MCC, 25 percent of that interest, $1562.50, could be taken as a tax credit against the home buyer’s federal income taxes.  This reduces the home buyer’s tax liability dollar-for-dollar.  It also effectively reduces their interest rate.



Without MCC

Mortgage Amount



Interest Rate




30 Years

30 Years

Monthly P and I



First-Year Interest  Payments



**The information in the chart above is for illustration purposes only.  Please note:  KHC staff are not tax advisors.  Please contact an accountant for full details of how an MCC will affect taxes.

For more information, read our MCC brochure available at, under Lenders/Realtors, Lender Resources.  Learn more about becoming an MCC-approved lender on the MCC Web page

MRB Regular Income Limits

Kentucky Housing’s income limits will remain the same for 2011.  More information is available in the MRB Program Guide.