Every Grant, Loan & Assistance Option Explained
By Jackie Wilson, REALTOR® | 3 Keys Collective at 85West | Louisville, KY
Kentucky has more first-time buyer assistance available than most people realize. The problem isn’t the programs — it’s that nobody explains them all in one place in plain language. Here’s the complete guide for Louisville-area first-time buyers in 2026.
Who Counts as a “First-Time Homebuyer”?
For most of these programs, you don’t need to be a first-time buyer in the literal sense. The standard definition is: you haven’t owned a primary residence in the past three years.
KHC Down Payment Assistance (Kentucky Housing Corporation)
| Amount: Up to $12,500
Structure: Second mortgage, repayable over 15 years at 4.75% interest Availability: Year-round Minimum credit score: 620 (FHA, VA, RHS); 660 for conventional Purchase price limit: Up to $544,232 Monthly payment on $12,500: approximately $97/month |
Louisville Metro Down Payment Assistance Program
| Amount: Up to $25,000
Structure: 0% interest, partially forgivable loan (15% LTV maximum) Income limits: $54,000 (1 person) to $89,450 (6 persons) Application windows: Specific periods only — most recent was March 2–April 30, 2026 Half the loan forgiven over the retention period This is the better deal if you qualify. |
Kentucky Welcome Home Grant
| Amount: Up to $20,000
Structure: Grant (no monthly payment; no repayment if you stay 5+ years) 2026 opening date: April 6, 2026 Availability: EXTREMELY limited — exhausted in 10 days in 2025 Income counting: ALL household income (not just borrower) For 2027: set a calendar reminder and apply on opening day |
Mortgage Credit Certificate (MCC) Program
A federal tax credit that converts a portion of mortgage interest paid into a dollar-for-dollar federal tax credit. Administered by KHC. Can be combined with KHC DAP and other programs. The cumulative tax savings over a 30-year loan can be substantial.
Loan Types That Work Best with These Programs
- FHA: 3.5% down with 580+ credit score | Loan limit in Jefferson County 2026: $524,225
- VA: 0% down for eligible veterans | Can pair with some KHC programs
- Conventional HomeReady/Home Possible: 3% down for income-eligible buyers
- USDA: 0% down for eligible rural addresses outside Louisville’s urban core
How to Stack Programs for Maximum Benefit
| KHC DAP + FHA first mortgage: standard combination, works well
Louisville Metro DAP + FHA or conventional: if you qualify on income limits MCC + KHC DAP + FHA: the full Kentucky combination for qualifying buyers Key: work with a KHC-approved lender. Not all lenders offer these. Ask specifically. |
- Check income against KHC limits AND Louisville Metro DAP limits — different thresholds
- Get pre-approved with a KHC-approved lender who specifically knows these programs
- Verify credit score: 620 minimum for KHC + FHA; 660 for conventional KHC
- Check if your target address qualifies for USDA (if outside Louisville core)
- Watch Louisville Metro DAP application windows — announced on louisvilleky.gov
- Set a calendar reminder for Welcome Home Grant 2027 opening
- Ask your lender about MCC — it’s often missed but provides real ongoing value
| QUESTIONS ABOUT YOUR LOUISVILLE REAL ESTATE QUESTIONS?
Jackie Wilson, REALTOR® • 3 Keys Collective at 85West • Louisville, KY • @jackiewilsonlou |