If you’re a first-time homebuyer in Kentucky, now is an ideal time to enter the housing market. The cost of living in Kentucky is significantly lower than the national average, and median home prices in Kentucky make it one of the most affordable states for buying a home. To make the process easier, the Kentucky Housing Corporation (KHC) and other local agencies offer a variety of first-time homebuyer assistance programs. Whether you’re looking for Kentucky down payment assistance, low-interest mortgage loans, or city-specific housing grants, Kentucky provides multiple options for eligible buyers in 2025.

Available First-Time Homebuyer Programs in Kentucky

Program Name	Key Features	Credit Score Requirement	Eligible Properties
KHC Conventional Preferred & Preferred Plus 80	3% down, income limits, available to repeat buyers	660	Single-family, condos, townhomes, PUDs, manufactured homes
KHC Mortgage Revenue Bond Program	Below-market rates, for FHA/VA/USDA loans	620	Broad eligibility
KHC Freddie Mac HFA Advantage	Lower mortgage insurance, flexible underwriting	660	SFR, condos, manufactured homes
KHC Down Payment Assistance	Up to $10,000 loan for DPA & closing costs	x	All types (with qualifying mortgage)
Louisville DPA Program	Up to $40,000 assistance, partial loan forgiveness	x	Multi-family, owner-occupied homes

KHC Conventional Preferred & Preferred Plus 80

This 30-year fixed-rate mortgage offers competitive terms to buyers earning up to 80% of the area median income (AMI). The Preferred Plus 80 option expands income eligibility, reaching up to $183,400 based on location.

• Pros: Low down payment, no personal contribution required, wide property eligibility
• Cons: Requires a 660+ credit score, higher than government-backed loans

KHC Mortgage Revenue Bond Program

Designed for government-backed loans (FHA, VA, USDA), this program offers reduced interest rates to help buyers afford their monthly payments.

• Requirements: 620 credit score, primary residence, income limits
• Pros: Low rates, open to repeat buyers in targeted areas
• Cons: Only compatible with government-backed mortgage types

KHC Freddie Mac HFA Advantage

This Freddie Mac-backed option features flexible guidelines and is geared toward moderate-income households.

• Pros: No purchase price limit, lower mortgage insurance
• Cons: Fewer eligible property types

KHC Down Payment Assistance Program

KHC provides up to $10,000 in down payment and closing cost assistance via a 10-year loan at 3.75% interest.

• Pros: No asset or reserve restrictions
• Cons: Loan repayment required with interest

City-Specific Assistance: Louisville DPA Program

Homebuyers in the Louisville metro area may qualify for up to $40,000 in down payment assistance. This interest-free loan becomes partially forgivable after 15 years and is only repaid if the home is sold.

• Requirements: No homeownership in past 12 months, 80% AMI cap, $2,000 minimum savings
• Pros: Partial loan forgiveness, multi-family eligibility
• Cons: Limited application windows, savings/credit requirements

National Loan Programs for First-Time Buyers in Kentucky

Kentucky homebuyers can also benefit from these federal mortgage options:

Program	Key Features
FHA Loans	3.5% down, 580+ credit score
VA Loans	0% down for eligible veterans/military
USDA Loans	0% down in rural areas
Fannie Mae HomeReady	3% down, flexible income criteria
Freddie Mac Home Possible	3% down, moderate-income limits

Most of these can be combined with KHC programs to reduce upfront costs.

Tips for First-Time Buyers in Kentucky

• Compare offers from multiple lenders to find the lowest mortgage rate in Kentucky.
• Work with a lender experienced in Kentucky Housing Corporation programs.
• Budget for homeowners insurance, especially in flood-prone zones.
• Understand housing trends in cities like Lexington, Bowling Green, and rural Kentucky.
• Boost your credit score to qualify for better rates and terms.

Start Your Path to Homeownership in Kentucky

Buying your first home in Kentucky is more attainable than ever thanks to a wide range of first-time homebuyer programs. From statewide mortgage options offered by the Kentucky Housing Corporation to city-specific assistance in areas like Louisville, there are valuable resources available to help you afford your first home. Connect with one of our mortgage experts today to explore your options and get personalized help securing the right program for your homeownership journey.

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