Kentucky first-time home buyer programs: KHC and Louisville Metro.

KHC down payment assistance

KHC's down payment assistance provides up to $12,500 toward your down payment and closing costs. It is a second loan paid back to KHC over 15 years, and KHC's mortgage FAQs give the terms as a 4.75% fixed interest rate over a 15-year term. It is available with KHC first mortgages that meet KHC's purchase price and income limits. KHC describes the $12,500 amount as a temporary increase. [1] [2]

KHC loan types

You can combine KHC down payment assistance with any of KHC's loan types. KHC lists these minimums: [3]

First-time buyer rules

FHA, VA and RHS loans can be Mortgage Revenue Bond (MRB) loans, which are mainly for first-time homebuyers. In a non-targeted area you must be a first-time homebuyer. In a targeted area, first-time and repeat buyers can both qualify. Household income must be below a county limit. KHC publishes the MRB household income limits and the list of targeted counties and census tracts. [3] [2]

Homebuyer education

KHC's FAQs say KHC does not add a homebuyer education requirement to its programs beyond each loan type's own guidelines. The Shared Appreciation Mortgage, described below, does require the course. [2] [4]

Shared Appreciation Mortgage

KHC's Shared Appreciation Mortgage (SAM) is for first-time homebuyers and new construction only, and income limits and other requirements apply. It provides up to 25% of the purchase price or appraised value toward the down payment and closing costs as a 0% interest, deferred-payment second mortgage. [4]

• You repay the principal plus a set share of the home's appreciation when you sell, refinance or pay off the first mortgage.
• If the home does not appreciate, you owe only the principal. If it sells at a loss, the full principal is still owed.
• The homebuyer education course is required.
• KHC's FAQs say a SAM cannot be used with KHC's down payment assistance.

Sources: [4] [2]

Louisville Metro Down Payment Assistance

Louisville Metro Government's Down Payment Assistance Program helps low- to moderate-income homebuyers with down payment and closing costs on an existing or newly built home in the Louisville Metro area. It is not limited to first-time buyers, but you may not currently own a home. [5]

• The assistance: a partially forgivable loan at 0% interest, up to 20% of the purchase price and not more than $30,000.
• Living in the home: you must live there as your primary residence for 5 to 10 years, depending on the amount. By the end of that period, 50% of the loan is forgiven. The rest is not due until you sell.
• Before you apply: complete homebuyer counseling (6 hours minimum) from a HUD-approved agency. A private home inspection is required.
• Timing: applications stay open only while funding lasts and can close on short notice. An eligibility letter does not guarantee funding when you find a home.

Income and purchase price caps change, so check the program page for the current numbers. [5]

KHC Home Buyer Tax Credit

KHC also offers a Home Buyer Tax Credit for income-eligible homebuyers. It is a tax credit based on the mortgage interest you pay. Ask a KHC-approved lender whether it applies to you and what the current rate is. [6]

How to get started

1. Find a lender in KHC's lender directory. [7]
2. Ask the lender which loan type and which assistance fit your income, your credit score and the home you want.
3. If you are buying in Louisville Metro, check whether the Metro program is accepting applications.
4. Start your home search with your pre-approval in hand.

The loan and the assistance come from the lender and the program. Tina helps with the home search, the offer and the closing process.

Buying in Indiana?

Indiana has its own programs. See Indiana first-time home buyer programs, or read the first-time buyer guide for the whole process.

Kentucky first-time buyer program questions

Sources and scope

General consumer information, checked against the program pages of Kentucky Housing Corporation and Louisville Metro Government in October 2026. Program terms, limits and funding change, and KHC's own pages do not always agree with each other, so confirm the current terms with a lender. This is not financial or legal advice.

1. Kentucky Housing Corporation: Down Payment Assistance
2. Kentucky Housing Corporation: Mortgage FAQs
3. Kentucky Housing Corporation: Loan Programs
4. Kentucky Housing Corporation: Shared Appreciation Mortgage (SAM)
5. Louisville Metro Government: Down Payment Assistance Program
6. Kentucky Housing Corporation: Home Buyer Tax Credit Calculator
7. Kentucky Housing Corporation: Lender Directory

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