Down Payment Options, Programs & Real Numbers for 2026
By Jackie Wilson, REALTOR® | 3 Keys Collective at 85West | Louisville, KY
The biggest myth in real estate that keeps Louisville buyers renting longer than they need to: you need 20% down to buy a house. Let me be blunt — this is simply not true, and believing it has cost a lot of people years of homeownership and equity they’ll never get back.
Down Payment Options in Louisville
FHA Loan — 3.5% Down
| Purchase: $290,000 | Down: $10,150 (3.5%) | Loan: $279,850
Min. credit score: 580 (for 3.5%); 10% down if score is 500–579 Best for: Buyers with good (not perfect) credit and limited cash FHA loan limit in Jefferson County 2026: $524,225 |
Conventional — 3% to 5% Down
| Purchase: $290,000 | Down at 3%: $8,700 | Loan: $281,300
Min. credit score: typically 620; better rates at 720+ PMI at 3% down: roughly $188–$282/month; cancels when you reach 20% equity |
VA Loan — 0% Down
| 0% down for eligible veterans and active duty
No monthly PMI Louisville has a large veteran population — this is one of the most underutilized benefits available |
Louisville Down Payment Assistance Programs
KHC Down Payment Assistance
Up to $12,500 as a second mortgage at 4.75% over 15 years. Available year-round to all KHC first-mortgage recipients. Minimum 620 credit score. Purchase price cap up to $544,232.
Louisville Metro Down Payment Assistance Program
0% interest, partially forgivable loan up to $25,000. Income limits: $54,000 (one person) to $89,450 (six persons). Applications open in specific windows — most recent was March–April 2026. This is the better deal if you qualify.
Kentucky Welcome Home Grant
Up to $20,000 with no monthly payment, no repayment if you stay 5 years. All household income counted. Exhausted in 10 days in 2025. Watch for the 2027 opening.
The Real Cash You Need to Close
| On a $290,000 Louisville home with FHA (3.5% down):
Down payment: $10,150 Closing costs (est. 2–3% of loan): $5,600–$8,400 Earnest money (credited at closing): $2,900 Home inspection: $400–$600 TOTAL CASH NEEDED AT CLOSING: approximately $19,000–$22,000 With Louisville Metro DAP ($25,000 if eligible): out-of-pocket could be under $3,000 |
The Down Payment Mistake That Delays Buyers
Buyers save exactly enough for the down payment, then discover at closing that they also need 2–3% of the loan for closing costs. Closing costs are separate from the down payment. Budget for both before you start shopping.
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Jackie Wilson, REALTOR® • 3 Keys Collective at 85West • Louisville, KY • @jackiewilsonlou |