2020 Welcome Home Program for Kentucky Home Buyers

Kentucky Welcome Home Grant for $5,000


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Homebuyer Eligibility

In order to receive Welcome Home funding, homebuyers must meet all of the following
eligibility requirements:
• Total household income must be at or below 80% of MRB income limits, as adopted
by the appropriate state housing finance agency, for the county where the property is
located, and adjusted for family size. MRB limits for KY, OH, and TN are available at
http://www.fhlbcin.com. The income calculation will be based off of the limits in place at the
time the program opens.

• 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).
Funds received from sellers, non-profit or other organizations, including state and
local government agencies, for down payment assistance grants are not considered
“gifts” and cannot be used to reduce the homebuyers’ required contribution.
Funds paid for items outside of closing, such as hazard insurance, taxes, application
fees, and other items related to the purchase are considered as part of the
homebuyer’s required contribution. Such items should be shown on the Closing
Disclosure or with other documentation.
• Applicants do not have to be first-time homebuyers (See Definitions). However, all
first-time homebuyers must complete a homebuyer counseling program. The first
paragraph of the reservation approval letter indicates FHLB’s first-time homebuyer
determination. The counseling program must be provided by, or be based on one
provided by, an organization recognized as experienced in homeownership counseling.
The counseling does not have to be provided by a HUD approved agency but must cover,
at minimum, mortgage financing, credit-worthiness, household budgeting, and home
maintenance. The FHLB does not approve or endorse any particular counseling agency or course.

Property Eligibility

• Any one to four-unit property to be used as the homebuyer’s residence is eligible for
Welcome Home assistance. However, for any property with two or more units, 85% of
the projected rent of the other units must be included in the homebuyer’s income. An
appraisal or current lease must be submitted at time of funds reservation to
document this income.
• Some manufactured housing is eligible for Welcome Home assistance. An appraisal is
required at time of funds reservation to verify eligibility. “Manufactured housing”
refers to a single-family residential dwelling built in compliance with the Federal
Manufactured Housing and Construction Standards, as amended, also known as the HUD
Code, after June 15, 1976. Manufactured homes may be built in multi-sectional or single
section units and installed on an FHA Title II permanent foundation system. In addition,
the home and lot must be taxable together as real property. For Welcome Home
eligibility purposes, a single section manufactured home must be Energy Star rated.
Welcome Home funds may not be used for any other type of manufactured or mobile
homes. Documentation verifying the above conditions have been met must be provided
and may include an FHA appraisal or an independent appraisal.
“Modular Home” refers to a home built to the State or Local Code where the home will be
located. Sectional units are built in a production facility, transported to the site and
assembled onsite. Modular homes are eligible collateral for the Welcome Home Program.
“Mobile Home” refers to a residential structure manufactured prior to the enactment of the Federal Manufactured Housing and Construction Standards, also known as the HUD
Code, on June 15, 1976. Mobile homes are not eligible collateral for the Welcome Home
Program.
• The housing assisted with Welcome Home funds must be subject to a legally
enforceable restriction in the warranty deed or restrictive covenant to the warranty
deed requiring that the FHLB be given notice of any refinancing, sale, foreclosure,
conveyance by deed-in-lieu of foreclosure, assignment of the first mortgage to the
Secretary of HUD, or change in ownership of the unit prior to the end of a five-year
retention period. Homebuyers may be required to pay back a pro rata amount of the
Welcome Home grant if the home is sold or refinanced during the five-year retention
period. The specific retention language required is available at www.fhlbcin.com.www.fhlbcin.com.
• Welcome Home may be used only in transactions which convey full title to the
homebuyer. Welcome Home may not be used with lease-purchase or land contracts.
• Welcome Home may be used for new home construction. The Welcome Home
reservation is valid until December 3, 2020 but any construction must be complete, the
first mortgage permanent loan must be closed (or the construction/permanent loan must
be converted to permanent), and funds must be requested no later than December 3, 2020.
Welcome Home funds may not be used for the construction loan financing, only the
permanent loan.
• The FHLB reserves the right to determine whether or not a property is considered
eligible.

Eligible Uses of Funds

• Welcome Home funds may be used to fund reasonable down payment and closing
costs incurred in conjunction with the acquisition of an eligible property by eligible
homebuyers.
• Welcome Home grants may not exceed $5,000 per homebuyer, as determined by the
FHLB.
• Welcome Home funds may be used in conjunction with other local, state, and
federal funding sources and with the FHLB’s Community Investment Cash Advance
programs. However, Welcome Home funds may not be used with an existing or future
award through the FHLB’s competitive Affordable Housing Program or through any of
the FHLB’s voluntary housing programs.
• A portion of the funds awarded may be used to pay for the reasonable costs of
counseling (not to exceed $300) for homebuyers purchasing Welcome Home assisted
housing if the cost is not covered by another funding source.
• Welcome Home is not intended for any purchases requiring any significant repair
or rehabilitation.
ο If more than $500 is to be escrowed for repairs from the buyer, the property is not
eligible for Welcome Home funds without the advance written approval of the FHLB
prior to closing. If the Closing Disclosure reflects an escrow for repairs and the
Member did not seek approval prior to closing the loan, funds may not be
disbursed.
ο If any funds are escrowed for repairs, the funds must come either from the seller or
from the buyer’s own funds, in addition to the required $500 homebuyer cash
contribution.

If any funds are escrowed for repairs from the buyer, Welcome Home funds will not
be disbursed until the Member certifies that:
1) All repairs were required for mortgage approval as evidenced by the appraisal;
2) All repairs have been completed; and
3) All escrowed funds have either been disbursed or released.
ο All payments from escrow funds for repairs should be made only by the Member or
closing agent and such payments should be made directly to the materials and/or
service providers. Under no condition should escrowed funds be given to the
homebuyer.
If any unused escrowed funds are released to the homebuyer, the Welcome Home
grant will be reduced by a like amount. In lieu of releasing unused funds to the
homebuyer, the unused funds may be applied as a prepayment of the first mortgage
principal.

Ineligible Uses of Funds

• Welcome Home funds may not be used for any other purposes except those
specifically stated above. Welcome Home funds may not be used to pay for significant
repairs (i.e. repairs in excess of $500), pay off consumer debt, pay off judgments, buy
down the mortgage rate, etc. If the FHLB determines that funds were used for an
ineligible expense, the grant will be reduced by the amount of the ineligible expense
unless the homebuyer brings adequate funds to the closing to meet the required $500
homebuyer cash contribution and cover the amount of the ineligible expense.
• Welcome Home funds may not be used for any loan with co-borrowers or co-signors
unless they will occupy the home as their primary residence and their incomes are
included in determining eligibility. Welcome Home funds are intended only for
homebuyers who qualify for the first mortgage based on their own merit, not relying on
others as co-signors, co-borrowers, or guarantors, and not relying on any expected but
uncertain change in job status or income or other circumstances.
• Welcome Home funds may not be used for any loan with collateral other than the
subject property. Blanket loans (loans with cars, boats, CD’s, or other property secured
as additional collateral) are not eligible.
• Welcome Home funds may not be used in transactions involving a second mortgage
provided by an individual seller. Second mortgages provided by formal organizations,
including financial institutions, Community Development Financial Institutions, housing
finance agencies, non-profit organizations, etc. are acceptable.

Reserving Welcome Home Funds

Funds will be allocated “first-come, first-served.” Members are not guaranteed any specific amount of Welcome Home funds.
Funds will be reserved only for specific homebuyers purchasing specific homes and
reservations cannot be transferred to other homebuyers or to other properties. The
Reservation Request and Request for Payment of Reserved Funding can only be submitted through the Members Only portal at http://www.fhlbcin.com.
• To request that funds be reserved for a homebuyer, the Member must:
Access the FHLB’s Member’s Only portal at http://www.fhlbcin.com.

For assistance in accessing the Member’s Only portal, please contact the Member’s Only
Administrator at your institution or contact the FHLB’s Service Desk at 800-781-
3090 (8:30 – 5:00PM ET);

Click on Housing Program Forms, Welcome Home Program and complete a
Reservation Request; and Upload and attach the following required documents to the Reservation Request form
(All documents must be uploaded as one attachment. Note: The attachment file name
should not contain special characters, such as @, &, #,*, etc.):
1) A completed, signed and dated loan application (generally a Uniform Residential
Loan Application);
2) Third party documentation for all sources of current year income for all persons,
age 18 or older, who will reside in the home. (Reference the Income Eligibility
Guide);
3) An appraisal is required if the subject property is a manufactured home.
• A Reservation Request will be denied if a fully executed loan application is not
submitted. Stating it is a phone or internet application is not acceptable. The loan
application MUST be signed.
• Do not submit documentation that is not required such as purchase contracts, W-2s, bank statements, credit reports, tax returns (unless self-employed), etc. as this slows down th review process.
• Please note that during periods of peak demand it may take four weeks to review and
approve a Reservation Request. If the information submitted is incomplete, it might take
longer. Funds are not reserved and the loan should not close using Welcome Home funds
until the FHLB has given approval.
• A homebuyer is considered “enrolled” in the Welcome Home Program at the time the
Reservation Request is received. Income eligibility will be determined based on income
documentation required at time of enrollment and will be based on the household’s
income at that time.
• The FHLB will perform a preliminary review of the Reservation Request and the
supporting documentation submitted to determine the eligibility of the homebuyer, the
availability of funds in the program, and the availability of funds for the Member. If any
of the information is incomplete, additional documentation or information may be
required and additional time will be required to process the request. A Request for
Additional Information, describing the documentation needed, will be sent to the
designated Member contact. All additional information must be scanned and emailed to
the person requesting it within five business days or the Reservation Request will be
denied.
• Written notification will be provided to the Member as to the homebuyer’s eligibility and date of reservation expiration. Submission of the Reservation Request does not
constitute a reservation of funds; funds are reserved only upon written notification
from the FHLB. The loan should not close prior to receiving a reservation approval
or Welcome Home funds may not be disbursed.
• Changes made to the purchase price, loan amount, loan type, interest rate, or loan term
after the reservation has been approved, do not require FHLB approval. All of the final
numbers will be identified when the Request for Payment of Reserved Funding is
reviewed.

Withdrawing a request

If a Member has submitted a Reservation Request and then realizes the transaction will not close, they should send an email to welcomehome@fhlbcin.com with the project number, homebuyer’s name and statement that the Reservation Request should be withdrawn.

Use the 80% limits for the Welcome Home Program.

Use the 100% limits for the Disaster Reconstruction Program.

Kentucky Welcome Home Grant Income Limits for 2020👇👇👇👇

Kentucky 

County 100% limits 80% limits
1-2 Persons 3+ Persons 1-2 Persons 3+ Persons
Adair $75,240 $87,780 $60,192 $70,224
Allen $75,240 $87,780 $60,192 $70,224
Anderson $68,800 $79,120 $55,040 $63,296
Ballard $62,700 $72,105 $50,160 $57,684
Barren $62,700 $72,105 $50,160 $57,684
Bath $75,240 $87,780 $60,192 $70,224
Bell $75,240 $87,780 $60,192 $70,224
Boone $81,300 $93,495 $65,040 $74,796
Bourbon $89,400 $104,300 $71,520 $83,440
Boyd $62,700 $72,105 $50,160 $57,684
Boyle $75,240 $87,780 $60,192 $70,224
Bracken $97,560 $113,820 $78,048 $91,056
Breathitt $75,240 $87,780 $60,192 $70,224
Breckinridge $75,240 $87,780 $60,192 $70,224
Bullitt $76,400 $87,860 $61,120 $70,288
Butler $75,240 $87,780 $60,192 $70,224
Caldwell $62,700 $72,105 $50,160 $57,684
Calloway $62,700 $72,105 $50,160 $57,684
Campbell $81,300 $93,495 $65,040 $74,796
Carlisle $75,240 $87,780 $60,192 $70,224
Carroll $75,240 $87,780 $60,192 $70,224
Carter $75,240 $87,780 $60,192 $70,224
Casey $75,240 $87,780 $60,192 $70,224
Christian $60,900 $70,035 $48,720 $56,028
Clark $89,400 $104,300 $71,520 $83,440
Clay $75,240 $87,780 $60,192 $70,224
Clinton $75,240 $87,780 $60,192 $70,224
Crittenden $75,240 $87,780 $60,192 $70,224
Cumberland $75,240 $87,780 $60,192 $70,224
Daviess $68,500 $78,775 $54,800 $63,020
Edmonson $75,240 $87,780 $60,192 $70,224
Elliott $75,240 $87,780 $60,192 $70,224
Estill $75,240 $87,780 $60,192 $70,224
Fayette $74,500 $85,675 $59,600 $68,540
Fleming $75,240 $87,780 $60,192 $70,224
Floyd $75,240 $87,780 $60,192 $70,224
Franklin $68,200 $78,430 $54,560 $62,744
Fulton $75,240 $87,780 $60,192 $70,224
Gallatin $97,560 $113,820 $78,048 $91,056
Garrard $75,240 $87,780 $60,192 $70,224
Grant $75,240 $87,780 $60,192 $70,224
Graves $62,700 $72,105 $50,160 $57,684
Grayson $75,240 $87,780 $60,192 $70,224
Green $75,240 $87,780 $60,192 $70,224
Greenup $62,700 $72,105 $50,160 $57,684
Hancock $68,500 $78,775 $54,800 $63,020
Hardin $67,600 $77,740 $54,080 $62,192
Harlan $75,240 $87,780 $60,192 $70,224
Harrison $75,240 $87,780 $60,192 $70,224
Hart $75,240 $87,780 $60,192 $70,224
Henderson $67,200 $77,280 $53,760 $61,824
Henry $91,680 $106,960 $73,344 $85,568
Hickman $75,240 $87,780 $60,192 $70,224
Hopkins $75,240 $87,780 $60,192 $70,224
Jackson $75,240 $87,780 $60,192 $70,224
Jefferson $76,400 $87,860 $61,120 $70,288
Jessamine $74,500 $85,675 $59,600 $68,540
Johnson $75,240 $87,780 $60,192 $70,224
Kenton $81,300 $93,495 $65,040 $74,796
Knott $75,240 $87,780 $60,192 $70,224
Knox $75,240 $87,780 $60,192 $70,224
Larue $81,120 $94,640 $64,896 $75,712
Laurel $62,700 $72,105 $50,160 $57,684
Lawrence $75,240 $87,780 $60,192 $70,224
Lee $75,240 $87,780 $60,192 $70,224
Leslie $75,240 $87,780 $60,192 $70,224
Letcher $75,240 $87,780 $60,192 $70,224
Lewis $75,240 $87,780 $60,192 $70,224
Lincoln $75,240 $87,780 $60,192 $70,224
Livingston $62,700 $72,105 $50,160 $57,684
Logan $75,240 $87,780 $60,192 $70,224
Lyon $63,600 $73,140 $50,880 $58,512
Madison $75,240 $87,780 $60,192 $70,224
Magoffin $75,240 $87,780 $60,192 $70,224
Marion $75,240 $87,780 $60,192 $70,224
Marshall $62,700 $72,105 $50,160 $57,684
Martin $75,240 $87,780 $60,192 $70,224
Mason $75,240 $87,780 $60,192 $70,224
McCracken $62,700 $72,105 $50,160 $57,684
McCreary $75,240 $87,780 $60,192 $70,224
McLean $82,200 $95,900 $65,760 $76,720
Meade $62,700 $72,105 $50,160 $57,684
Menifee $75,240 $87,780 $60,192 $70,224
Mercer $63,200 $72,680 $50,560 $58,144
Metcalfe $75,240 $87,780 $60,192 $70,224
Monroe $75,240 $87,780 $60,192 $70,224
Montgomery $75,240 $87,780 $60,192 $70,224
Morgan $75,240 $87,780 $60,192 $70,224
Muhlenberg $62,700 $72,105 $50,160 $57,684
Nelson $79,320 $92,540 $63,456 $74,032
Nicholas $75,240 $87,780 $60,192 $70,224
Ohio $75,240 $87,780 $60,192 $70,224
Oldham $76,400 $87,860 $61,120 $70,288
Owen $75,240 $87,780 $60,192 $70,224
Owsley $75,240 $87,780 $60,192 $70,224
Pendleton $97,560 $113,820 $78,048 $91,056
Perry $75,240 $87,780 $60,192 $70,224
Pike $75,240 $87,780 $60,192 $70,224
Powell $75,240 $87,780 $60,192 $70,224
Pulaski $75,240 $87,780 $60,192 $70,224
Robertson $75,240 $87,780 $60,192 $70,224
Rockcastle $75,240 $87,780 $60,192 $70,224
Rowan $75,240 $87,780 $60,192 $70,224
Russell $75,240 $87,780 $60,192 $70,224
Scott $89,400 $104,300 $71,520 $83,440
Shelby $76,200 $87,630 $60,960 $70,104
Simpson $62,700 $72,105 $50,160 $57,684
Spencer $91,680 $106,960 $73,344 $85,568
Taylor $62,700 $72,105 $50,160 $57,684
Todd $75,240 $87,780 $60,192 $70,224
Trigg $60,900 $70,035 $48,720 $56,028
Trimble $91,680 $106,960 $73,344 $85,568
Union $62,700 $72,105 $50,160 $57,684
Warren $62,700 $72,105 $50,160 $57,684
Washington $75,240 $87,780 $60,192 $70,224
Wayne $75,240 $87,780 $60,192 $70,224
Webster $75,240 $87,780 $60,192 $70,224
Whitley $75,240 $87,780 $60,192 $70,224
Wolfe $75,240 $87,780 $60,192 $70,224
Woodford $74,500 $85,675 $59,600 $68,540

 

request mortgage pre-approval click here

If you want a personalized answer for your unique situation call, text, or email me or visit my website below:

Text/call: 502-905-3708


Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

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

 

Popular Kentucky Mortgage Programs


5 popular programs that Kentucky Home buyers use to purchase their first home.

Conventional Loan

• At least 3%-5% down
 Closing costs will vary on which rate you choose and the lender. Typically the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.
Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.
The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home.
Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.
Max Conventional loan limits are set at $510,400  for 2020 in Kentucky

Kentucky USDA Rural Housing Program

If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.
Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.
They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.
They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area
A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern  Kentucky .
There is a map link below to see the qualifying areas.
Thee is also a max household income limits with most cutoff starting at $86,400 for a family of four, and up to $115,000 for a family of five or more.
USDA requires 3 years removed from bankruptcy and foreclosure.
There is no max USDA loan limit.

Kentucky FHA Loan

FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment and will go down to a 580 credit score.
The current mortgage insurance requirements are kinda steep when compared to USDA, VA , but the rates are usually good so it can counteracts the high mi premiums. As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.
THe mi premiums are for life of loan like USDA.
FHA requires 2 years removed from bankruptcy and 3 years removed from foreclosure.
Maximum FHA loan limits in Kentucky are set around $331,600 and below.

Kentucky VA Loan

VA loans are for veterans and active duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2% for first time use, and 3% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.
VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit and no max loan limits in Kentucky
Most VA lenders I work with will want a 580 credit score, even though VA says in their guidelines there is  no minimum score, good luck finding a lender
VA requires 2 years removed from bankruptcy or foreclosure.
Clear Cavirs needed to for a VA loan.

Kentucky Down Payment Assistance

This type of loan is administered  by KHC in the state of Kentucky. They typically have $4500 to $6000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years.
Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.
KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs. The conventional loan requirements at KHC requires 660 credit score.
The max debt to income ratios are set at 40% and 50% respectively.
apply online for a kentucky first time home buyer loan