First-Time Buyer Programs in Louisville: Simple Guide

Buying your first home in Louisville can feel exciting and overwhelming at the same time. You may be wondering how to cover the down payment, what you can afford, and which loans are worth your time. The good news is that Kentucky offers real help for first-time buyers, and many options fit right here in Jefferson County.

In this guide, you will learn how Kentucky Housing Corporation programs work, which federal loans pair well with them, what to expect for eligibility, and the simple steps to get from preapproval to keys. You will also see easy, hypothetical examples to make the numbers feel real. Let’s dive in.

What KHC is and why it matters

Kentucky Housing Corporation, or KHC, is the state’s housing finance agency. It partners with approved lenders to offer first mortgages and down payment assistance that can make buying a home more affordable. You access these programs through participating lenders rather than applying to KHC directly.

KHC sets program rules, such as income and purchase price limits by county, and many offerings include fixed-rate loans and down payment assistance. To see program details, income and price limits, and to search for participating lenders, visit the Kentucky Housing Corporation website at the KHC program hub.

How KHC programs typically work

KHC programs are designed to reduce upfront costs and keep your monthly payment stable.

• First mortgage: Fixed 15 or 30-year terms are common. Rates are set for KHC programs and can be competitive with market rates. Availability can change.
• Down payment assistance: Often a second lien or forgivable loan that helps cover down payment or closing costs. Amounts and terms vary by program and change over time.
• Homebuyer education: Many programs require an approved course before closing. Your lender will guide you to acceptable options.
• County-based limits: Income and maximum purchase price caps apply and vary by county and household size. Jefferson County has its own limits.
• Participating lenders: You must use an approved lender to access KHC programs. Start by finding one on the KHC participating lender page.

Who qualifies in Louisville

Eligibility depends on your situation and the specific program. Here are common factors:

• First-time buyer definition: Many programs follow the federal standard of not having owned a principal residence in the past three years. See HUD’s overview of homebuying basics for context at HUD’s buying a home page. Always confirm how KHC defines first-time buyer for the program you choose.
• Income limits: KHC sets income caps that vary by county and household size. Check the latest Jefferson County limits on the KHC site.
• Purchase price caps: KHC also caps the maximum purchase price by county. Your lender will confirm the current Jefferson County limit.
• Credit scores: Minimums depend on the loan type. FHA often works with 580 and above for 3.5 percent down, while many conventional options look for 620 and above. VA does not set a minimum score, but lenders use practical minimums. USDA has income and area eligibility rules. Final approval depends on the lender’s underwriting and KHC overlays.
• Occupancy: KHC programs are for primary residences only.

Federal loans you can use or pair with KHC

Several federal loan types may work alone or alongside KHC down payment assistance. Your lender will help you choose the best fit.

• FHA: Low down payment and flexible credit. Learn the basics on HUD’s FHA overview.
• VA: For eligible veterans, service members, and some surviving spouses. Often allows zero down. Explore the program at the VA home loan page.
• USDA: Targets eligible rural and some exurban areas with income limits. Details are on USDA Single-Family Housing Programs.
• Conventional 3 to 5 percent down: Fannie Mae HomeReady and Freddie Mac Home Possible offer low-down options for qualified buyers. Read about Fannie Mae HomeReady and Freddie Mac Home Possible.

Many Louisville buyers pair an FHA or low-down conventional loan with KHC down payment assistance. VA and USDA can sometimes work with state assistance as well. Confirm pairing rules with a participating lender.

Louisville price points and fit with program caps

Home prices in Jefferson County vary by neighborhood and property type. That means the KHC purchase price cap matters when you choose your target homes. If a listing is above the cap, you may not qualify for KHC assistance, even if your income fits.

Since limits update over time, ask your participating lender to pull the current Jefferson County purchase price cap and income limits from the KHC site. For additional local housing resources and community programs, you can also review the Louisville Metro Office of Housing and Community Development.

HYPOTHETICAL examples to show the math

These examples use rounded, hypothetical numbers to show how down payment assistance can affect cash to close and monthly principal and interest. They are not rate quotes or predictions.

Assumptions: 30-year fixed at 6.0 percent interest, principal and interest only, and sample down payment assistance amounts at 3 percent and 5 percent of purchase price. Taxes, insurance, PMI, HOA, and lender fees are not included. Always confirm current rates and KHC program terms with a participating lender.

Scenario A: Lower-priced home at $150,000

• 3 percent down is $4,500. If KHC provides another 3 percent toward down payment or closing costs, it can reduce your cash to close.
• Approximate loan after 3 percent down is $145,500.
• Estimated principal and interest at 6.0 percent is about $871 per month.

Scenario B: Mid-price home at $250,000

• 3 percent down is $7,500. If eligible, a 5 percent KHC assistance amount of $12,500 could further reduce upfront cash needed.
• Approximate loan is $242,500.
• Estimated principal and interest at 6.0 percent is about $1,454 per month.

Scenario C: Higher entry near $350,000

• Some KHC programs may cap purchases below this level in Jefferson County. If the cap is lower, you may need a conventional or other loan without KHC assistance.
• Illustrative 10 percent down is $35,000, loan amount $315,000.
• Estimated principal and interest at 6.0 percent is about $1,890 per month.

Step-by-step plan to get ready

Use this simple path to move from research to keys in Louisville.

1. Check affordability: Run your own numbers with the CFPB mortgage calculator and guides. Add estimated taxes, insurance, PMI, and HOA when you compare homes.
2. Find a KHC participating lender: Use the search tools at KHC’s site to locate approved lenders and loan officers.
3. Get preapproved: Gather pay stubs, W-2s or 1099s, bank statements, ID, and any letters of explanation for credit items.
4. Complete homebuyer education: If required for your KHC program, finish the course early so it does not delay closing.
5. Choose the right loan: Compare FHA, VA, USDA, or conventional with your lender. Ask how KHC down payment assistance can help.
6. Shop with confidence: With a KHC-aware preapproval letter, you can write stronger offers on homes that fit the program caps.

How to find participating lenders

You access KHC programs through approved lenders. The KHC website hosts a searchable list of participating lenders and loan officers.

Ask each lender:

• Are you a KHC participating lender today, and which KHC products do you offer?
• What are current interest rates, fees, and down payment assistance options for Jefferson County?
• What are the credit score, income, and purchase price limits for my household size?
• Which homebuyer education providers do you accept, and when should I complete the course?
• Who handles underwriting, and can you issue a conditional preapproval for my offer?

Comparing at least two participating lenders can help you find the best overall fit.

Common mistakes to avoid

• Waiting to complete homebuyer education, which can slow your closing timeline.
• Ignoring total monthly cost, including taxes, insurance, PMI, and HOA.
• Skipping a check on KHC income and purchase price caps for Jefferson County.
• Not asking if KHC assistance pairs with your chosen loan type.
• Focusing only on rate and missing lender fees and service levels.

Get local guidance that fits your goals

The right plan can save you time and money. When you combine a KHC-aware lender with a local agent who knows neighborhoods and pricing patterns, you can target homes that both fit your life and qualify for assistance.

If you want a simple path from preapproval to keys, reach out for a local consult. I will help you match programs to the right homes, schedule tours on your timeline, and keep the process clear from first showing to closing. Connect with Mark Stevens to start your first-home plan today.

FAQs

What is KHC and how does it help first-time buyers in Louisville?

• KHC is Kentucky’s housing finance agency that works through approved lenders to offer fixed-rate mortgages and down payment assistance. Learn more at the KHC program hub.

How do I know if I am a first-time buyer under these programs?

• Many programs use the federal standard of not owning a principal residence in the past three years, but always confirm each program’s definition with your lender and the KHC site.

How much down payment do first-time buyers typically need in Louisville?

• FHA often needs 3.5 percent down, some conventional options accept 3 to 5 percent, and VA or USDA can allow zero down for eligible buyers. KHC assistance can help with down payment or closing costs. Review basics at HUD’s buying a home page.

Can I combine KHC assistance with FHA or conventional loans?

• Often yes. Many buyers pair KHC assistance with FHA or low-down conventional loans, and VA or USDA may also work depending on rules. Confirm pairing with a participating lender and check the KHC site.

How do I check Jefferson County income and purchase price limits?

• Limits change over time and are posted by county on KHC’s website. Ask your lender to verify the latest Jefferson County caps and review the KHC limits and program pages.

Where can I find trusted homebuyer education or local housing resources?

• Your participating lender can point you to approved courses, and the Louisville Metro Office of Housing and Community Development lists local resources that may support your homebuying journey.