Saving for a down payment is one of the biggest barriers to homeownership. Fortunately, there are down payment assistance (DPA) programs available throughout Kentucky that can make buying a home more affordable — especially for first-time buyers.
At Quality Home Mortgage in Cadiz, KY, we help clients access state and local programs that provide grants, forgivable loans, and closing cost help. Whether you’re buying your first home or returning to the market after years of renting, this guide explains how DPA works and how to find out what you qualify for.
What Is Down Payment Assistance (DPA)?
DPA refers to financial assistance offered by government agencies, nonprofits, or lenders to help buyers cover:
- The down payment (usually 3% to 5% of the home price)
- Closing costs (which can add 2% to 5% more)
Some programs offer grants that don’t need to be repaid, while others provide second loans that are deferred, forgivable, or repayable when you sell or refinance the home.
Who Qualifies for Down Payment Assistance in Kentucky?
Eligibility varies by program, but most DPA options are designed for:
- First-time home buyers (or those who haven’t owned in the last 3 years)
- Buyers with moderate household incomes
- Homes that are owner-occupied
- Buyers using FHA, USDA, VA, or Conventional loans
Many programs also require completion of a homebuyer education course.
Top Down Payment Assistance Programs in Kentucky
1. Kentucky Housing Corporation (KHC) DPA
The KHC is the leading provider of affordable housing support in the state. Their DPA options include:
- Regular DPA: Up to $10,000 as a repayable second mortgage at 1% interest over 10 years
- Affordable DPA: Up to $10,000 at 0% interest, repayable over 10 years (income limits apply)
- Home Buyer Tax Credit: Potential tax benefits that reduce your federal tax bill
Can be used with KHC first mortgage loans.
2. USDA Loans with Closing Cost Assistance
While USDA loans already offer 0% down, DPA programs can still help with closing costs. These may include:
- Seller concessions negotiated by your agent
- Local grant programs that layer with USDA
3. Local City & County Programs
Some cities and counties in Kentucky offer their own assistance for buyers:
- Hopkinsville Homebuyer Assistance Program
- Paducah Housing Authority Programs
- Community-based nonprofits offering grant support
Ask our team about options in Trigg, Christian, Caldwell, and Lyon Counties.
Real Buyer Story
“We assumed we’d need $10,000 saved, but Hiler helped us qualify for a $6,000 assistance program through KHC. That made all the difference in getting into our first home.”
— Verified Buyer, Cadiz KY
How to Apply for DPA in Kentucky
Step 1: Get Pre-Approved
We start with a full loan pre-approval to determine your price range and eligibility.
Step 2: Verify DPA Eligibility
We’ll check your income, location, and loan type against available DPA programs in your area.
Step 3: Complete Education (If Required)
Most programs require a homebuyer education course, which can usually be done online.
Step 4: Apply with Our Help
We’ll complete the paperwork, submit documents, and coordinate with program administrators.
FAQs – Down Payment Assistance in KY
Do I have to be a first-time buyer?
Most programs are for first-time buyers, but some are open to repeat buyers if you haven’t owned a home in the past 3 years.
Do I have to repay the assistance?
Some programs are forgivable after a set time (e.g., 5-10 years), while others are repayable when you sell or refinance. We’ll explain all terms upfront.
Can I combine DPA with other loan types?
Yes — many programs work with FHA, USDA, VA, and Conventional loans.
Can DPA help with closing costs too?
Absolutely. Some programs allow assistance to be used for down payment or closing costs depending on your needs.
Let’s Find Out What You Qualify For
If saving for a down payment is keeping you on the sidelines, let’s talk. At Quality Home Mortgage, we know the DPA programs available in Kentucky and how to match buyers with the right one.
63 Lakota Drive, Suite D, Cadiz, KY 42211
(270) 522-0700
qualityhomemortg@bellsouth.net
Mon–Fri: 10:00 AM – 4:00 PM
Call us today and take the first step toward affordable homeownership.
