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How to Qualify for a Grant for a Down Payment FHA Loan in Owensboro, Kentucky

by Cheri Brubaker

FHA-sponsored grant programs for down payment are not currently available. However, residents of Kentucky can get down payment assistance through the Kentucky Housing Corporation (KHA). KHC is the state housing finance agency with a mission to provide safe, quality, affordable housing. The state created the Down Payment Assistance Program (DAP) with $3 million from the National Mortgage Foreclosure Settlement Fund. Available only until funds are gone, three programs remain funded at the time of publication.

DAP Available in Kentucky

Get down payment assistance through HOME-DAP. FHA loans require a minimum 3.5 percent down payment. HOME-DAP is available on homes with a purchase price up to $195,700 with assistance up to $4,500. No monthly repayment is required and the amount is forgiven over five years. In Daviess County, 2013 gross annual household income limits for HOME-DAP are $30,550 for a single person household, $34,900 for a household of two, $49,250 for a household of three and $43,600 for a household of four.

Check the other programs offered by KHC. The Regular DAP is available on homes with a purchase price up to $243,000. Assistance is in the form of a loan that must be repaid over a ten year term with interest. The Neighborhood DAP is a repayable second mortgage up to $10,000 at a low interest rate. Income must be less than $124,775. Terms and conditions apply.

Choose a KHC approved lender. These are Independence Bank of Kentucky, First Liberty Financial Mortgage, Old National Bank, US Bank NA and Fifth Third Mortgage Company in Owensboro.

Consult Oasis Inc., a KHC approved counselor, in Owensboro at 270- 685-0260. A counselor can help you determine how you can buy a home with down payment assistance.

Tips

  • Visit the HUD website for information on other resources that might help you purchase a home.
  • Charitable organizations may offer down payment assistance. Keep in mind that if you are using FHA (your best option if you are seeking a low down payment) the organization must be HUD approved.
  • Check with a reputable and experienced mortgage banker to learn about available programs.

About the Author

A writer, artist and teacher, Cheri Brubaker has been a regular contributor to "The Clayton Tribune," a weekly newspaper in Northeast Georgia, writing on topics ranging from education to real estate market conditions. She holds a bachelor's degree in liberal arts from Columbia College.

Photo Credits

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