Kentucky KHC Conventional Loan Programs

What are the Kentucky Housing Corporation (KHC) Conventional Loan Programs?

KHC offers Conventional Preferred and Conventional Preferred Plus 80 loan programs, providing 30-year fixed-rate mortgages with down payments as low as 3%, designed to assist both first-time and repeat homebuyers in Kentucky.

What is the Conventional Preferred Program?

The Conventional Preferred Program offers a 30-year fixed-rate mortgage with a minimum 3% down payment, reduced mortgage insurance rates, and is available to both first-time and repeat homebuyers.

What is the Conventional Preferred Plus 80 Program?

The Conventional Preferred Plus 80 Program provides a 30-year fixed-rate mortgage with a 3% down payment and standard mortgage insurance coverage, catering to homebuyers who may have higher income limits compared to the Conventional Preferred Program.

What are the credit score requirements for these programs?

Both programs require a minimum credit score of 660 to qualify.

Are there income limits for these loan programs?

Yes, income limits apply and vary by county and household size. For the Conventional Preferred Program, the applicant's income must not exceed 80% of the area median income (AMI). The Conventional Preferred Plus 80 Program has higher income limits, accommodating a broader range of applicants.

What is the maximum purchase price allowed?

As of 2025, the maximum purchase price for eligible properties is $510,939.

Is homebuyer education required?

Completion of a homebuyer education course may be required, especially for first-time homebuyers, to ensure they are well-prepared for homeownership responsibilities.

Can these loans be used for different property types?

Eligible properties include single-family homes, townhouses, condominiums, and manufactured homes that meet specific guidelines and are permanently affixed to a foundation.

Are there debt-to-income (DTI) ratio requirements?

Yes, the maximum allowable DTI ratio is typically between 40% and 50%, depending on the specific loan and borrower qualifications.

Is mortgage insurance required?

Yes, both programs require mortgage insurance. The Conventional Preferred Program offers reduced mortgage insurance rates, while the Conventional Preferred Plus 80 Program requires standard mortgage insurance coverage.

Can these loan programs be combined with down payment assistance?

Yes, eligible borrowers can combine these loan programs with KHC's down payment assistance options to help cover upfront costs.

Are there any borrower reserve requirements?

No, there is no liquid asset review, and there are no limits on borrower reserves for these programs.

Is there a first-time homebuyer requirement?

No, both first-time and repeat homebuyers are eligible for these programs.

What are the benefits of reduced mortgage insurance rates?

Reduced mortgage insurance rates lower the monthly mortgage payment, making homeownership more affordable for borrowers.

Are there specific property location requirements?

The property must be located within the state of Kentucky and meet KHC's property guidelines.

Can these loans be used for new construction?

Yes, these loan programs can finance the purchase of newly constructed homes that meet KHC's eligibility criteria.

What is the process to apply for these loan programs?

Interested applicants should contact a KHC-approved lender who will guide them through the application process, including eligibility verification and documentation requirements.

Are there any fees associated with these loan programs?

Standard loan fees, such as origination and processing fees, may apply. It's important to discuss all potential fees with your lender.

Is refinancing available through these programs?

These programs are primarily designed for home purchases. For refinancing options, it's advisable to consult with a KHC-approved lender to explore available programs.

How does the Conventional Preferred Plus 80 Program differ from the Conventional Preferred Program?

The Conventional Preferred Plus 80 Program differs by requiring standard mortgage insurance coverage and accommodating higher income limits, making it accessible to a broader range of homebuyers compared to the Conventional Preferred Program, which offers reduced mortgage insurance rates and is limited to applicants earning up to 80% of the area median income.