$4500 Down Payment Assistance Money for Kentucky Home Buyers

First-time home buyers who obtain a KHC (Kentucky Housing Corporation) home loan will be eligible for $4,500 towards down payment and closing costs. The program was announced recently by Governor Steve Beshear and is effective May 1, 2009 - November 30, 2009. Unlike the $8000 first-time home buyer tax credit offered by the federal government, this is a loan. However, the terms are very favorable and the money is provided at the closing.

Plan Highlights

• The loan is in the form of a second mortgage on the home.
• Principle and Interest payments are deferred until July 1, 2010.
• The loan is repaid based on a 10-year amortization schedule at 6%.
• If you repay the loan by July 1, 2010, $300 will be forgiven.

Let's consider how to best use this loan in conjunction with the $8000 tax credit for an FHA loan.

1. Purchase a house before November 30th. (Remember it takes 4-6 weeks to close so you need an accepted offer by mid September).
2. Use the $4,500 to help pay the 3.5% downpament requirement from FHA.
3. File for the $8000 tax credit with your 2009 taxes.
4. Repay the KHC Down Payment Assistance loan before July 1st and save an additional $300.

If you follow these steps, you will have $3,800 cash and equity in your new home by next summer. Further, you will have little to no out-of-pocket expenses beyond inspections and partial closing costs.

If you are looking for a home in Shepherdsville, Mt Washington, Taylorsville, or Shelbyville, the deal can be even better. Rural Housing Service (RHS) loans do not require a down payment and do not have monthly mortgage insurance payments. In this case, the $4500 should easily cover all closing costs.

Requirements

1. First-time Home Buyer
2. Meet KHC Income and Purchase Price Guidelines
3. Minimum Credit Score - 620

4. Use a KHC approved lender

Ready to get started?

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Erik Hitzelberger is a licensed REALTOR with RE/MAX Alliancein Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Prospect, Middletown, Jeffersontown (J-Town), Fern Creek, Okolona, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley. Click the following links to learn more about Louisville and Bullitt County Real Estateor to Search for Louisville Homes

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