Kentucky Housing Down Payment and Closing Costs Assistance
- Up to $4,500.
- Amortized over 10 years at a 1 percent interest rate.
- Household income limits based on county and household size (same as HOME Income Limits).
- New and existing property eligible.
- Purchase price limit $243,000.
Down payment Assistance Program (DAP)
Only home buyers approved for a KHC first mortgage are eligible for DAP. All DAPs take a lien
position and require input into LP/DU as subordinate financing. DAP funds can never be used
to pay for repairs. Once the loan type and KHC first mortgage funding source is determined,
determine for which of the three KHC DAPs the borrower is eligible.
1. Make sure the property is existing (previously occupied) and below the purchase price
limit of $195,700. If not, KHC HOME DAP is eliminated. Proceed to question 3.
2. To ensure HOME DAP eligibility, ensure the following requirements are met:
• Household income below the HOME DAP income limits, available in the MRB
Program Guide, page 10.
• Borrower requires a minimum of $1,000 assistance, up to a max of $4,500, based on
need. Must use their own liquid funds in excess of two months’ PITI before they
look to HOME DAP.
• Must go maximum allowed LTV on the first mortgage.
• Property must pass HQS inspection (Lead Paint).
• Cannot be used in conjunction with REO properties or FHA 203K streamline
If all of these are met, you must determine how much HOME DAP can be accessed.
This is total cash needed to close, minus seller concessions, minus borrower funds in
excess of two months’ PITI. Whatever remains, rounded to the nearest $100, is the
HOME DAP loan amount.
3. Does the borrower or property meet one of the three Neighborhood DAP qualifiers?
• Is the property being purchased as an REO, foreclosure, bank-owned, or
short sale property?
• Has the property been marketed for six months or more?
• Has the borrower experienced a foreclosure, short sale, or deed-in-lieu in the
past and now credit qualifies?
If yes to any of these, the borrower qualifies for the $10,000 Neighborhood DAP.
Funds can be used toward the down payment orfor closing costs and prepaids. Loan is
amortized over 30 years at 1 percent interest rate. The borrower must qualify with
second mortgage payment. If not, proceed to Regular DAP in question 4.
4. Borrower is eligible for Regular DAP up to $6,000 in $100 increments with a minimum
$500 loan amount. Regular DAP is amortized over ten years at 6 percent.
Must go to maximum LTV allowed on first mortgage amount. Borrower must qualify with second
mortgage payment.Please Note: Quote KHC interest rate with DAP. GFE required on all DAPs. TIL only
required on the Neighborhood and Regular DAP. Both the DAP GFE and TIL can be found on
KHC’s Web site, www.kyhousing.org, under Lenders/Realtors, Loan Connection Services.
Senior Loan Officer
Key Financial Mortgage Co. (NMLS #1800)
*107 South Hurstbourne Parkway
*Louisville, KY 40222*