KHC Provides Aid Programs For KY First Time Buyers

Programs For Kentucky 1st Time Buyers

First time home buyers in Kentucky have many options available to them for help in purchasing their first residence. The Kentucky Housing Corporation (KHC) provides some very ample programs for Kentucky residents seeking to purchase their first home.




 

Kentucky First Time Home Buyer Programs
Kentucky First Time Home Buyer Programs

Here are some highlights:

Home Buyer Tax Credit

What is KHC’s Home Buyer Tax Credit?

Home Buyer Tax CreditKHC’s Home Buyer Tax Credit is available through Mortgage Credit Certificates (MCC), which reduce the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan.  MCCs are NOT mortgages.  They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment.  That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay.  The federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan.  But an MCC gives you a tax credit of 25 percent (not to exceed $2,000).  You can still deduct the remaining 75 percent interest on your income taxes.  A tax credit is not the same as a tax deduction.  A tax deduction reduces the portion of your income that is taxed, so you pay less.  A tax credit is a direct, dollar for dollar reduction in the total tax you owe.  The MCC is effective for the life of the loan as long as you live in the home.  If you sell your home in the first nine years of ownership, you may be subject to Federal Recapture Tax.

Eligibility to apply

You may qualify for the program if:

  • You are purchasing your first home.
  • You have not owned a home in the last three years.
  • The home you wish to buy is located in an area of the state which is exempt from the first-time home buyer rule.  (Your local lender can determine those “targeted areas.”)

Maximum home sales price is $255,500.

Maximum household income limits based on County:

  • 1-2 person household : Up to $84,840
  • 3-4 person household : Up to $98,980

You must meet lender, KHC, FHA, VA, RHS, Fannie Mae, and/or Freddie Mac standards for creditworthiness.  You must occupy the property.

It cannot be used for business, commercial, or rental purposes

For complete details on these programs, including contact information and instructions on how to apply, please visit this KHC first time home buyer page.





More Kentucky First Time Buyer Programs

In addition to the above homebuyer programs offered by KHC, there are local housing agencies in various towns, cities and counties throughout the state that provide financial assistance to 1st time property buyers as well. To determine if there any near you, please visit local first time home buyer programs in Kentucky.