From the rolling bluegrass fields to the bustling streets of Louisville and Lexington, Kentucky is a welcoming place to put down roots. With its blend of small-town charm and vibrant city life, it’s easy to see why many want to call the Bluegrass State home. Still, rising home prices and interest rates can make saving for a down payment a challenge, especially for first-time buyers.
Fortunately, Kentucky offers a variety of down payment assistance (DPA) programs designed to help bridge the gap. From statewide resources to local initiatives, these programs can make homeownership more attainable across the state.
This guide highlights some of the most widely available and impactful DPA programs in Kentucky. While it doesn’t cover every option out there, we’ve focused on those with accessible eligibility requirements and meaningful benefits. We’ll continue to update this page as program details evolve.
What's Happening in the Kentucky Housing Market?
Kentucky remains relatively affordable compared with many parts of the country, with typical home prices well below the national level. Prices have been fairly stable in 2026, while buyers generally have more inventory and a little more time to shop. Conditions can still vary by location, with larger markets such as Louisville and Lexington often looking different from smaller towns and rural communities across the state.
Affordability can still be a challenge, particularly with mortgage rates remaining elevated. For buyers who can comfortably manage the monthly payment, down payment assistance may help with another major hurdle: coming up with the cash needed for a down payment and closing costs.
Statewide Down Payment Assistance Programs
Across Kentucky, statewide programs give buyers access to help regardless of which county or city they live in.
Kentucky Housing Corporation Down Payment Assistance Program (DAP)
The KHC DAP offers up to $12,500 toward down payment and closing costs, structured as a 15-year loan at a fixed 4.75% interest rate. The funds are layered with a KHC first mortgage.
Eligibility: Buyers must meet applicable income and purchase price limits (KHC currently allows homes up to $566,354), meet the credit score requirements for their KHC first mortgage (generally 620 for FHA, VA, and RHS loans and 660 for conventional loans), and use the home as a primary residence; both first-time and repeat buyers are eligible.
Kentucky Housing Corporation Shared Appreciation Mortgage (SAM)
The KHC Shared Appreciation Mortgage (SAM) provides a 0% interest, deferred-payment second mortgage of up to 25% of the home’s purchase price or appraised value to help cover down payment and closing costs. No monthly payments are required. When the loan becomes due, borrowers repay the original SAM amount plus KHC’s proportional share of any increase in the home’s value.
Eligibility: Buyers must be first-time homebuyers purchasing eligible new construction in Kentucky, use the property as their primary residence, complete the required SAM homebuyer education course, meet income and other program requirements, and purchase within KHC’s applicable price limit.
Federal Home Loan Bank of Cincinnati “Welcome Home” Grant
The Welcome Home Program provides up to $20,000 in grant funds for down payment and closing costs, available through participating banks and credit unions. No repayment is required, but funds are limited and awarded on a first-come, first-served basis each spring.
Eligibility: Buyers must contribute at least $500 of their own funds, have household income within program limits (typically around 80% of AMI), and purchase a primary residence; both first-time and repeat buyers may qualify.
>>>DISCOVER: 10 Most Affordable Housing Markets in Kentucky
Down Payment Assistance Programs by County
Some counties participate in consortiums or operate their own DPA programs for local buyers.
Northern Kentucky HOME Consortium
Serving participating Northern Kentucky cities including Covington, Newport, and Erlanger, the Northern Kentucky HOME Consortium Program provides up to $15,000 in a 0% interest, deferred and forgivable loan for down payment and closing costs. One-tenth of the loan is forgiven for each year the buyer occupies the home as a primary residence, resulting in full forgiveness after 10 years.
Eligibility: Buyers must have income at or below 80% of AMI and complete a HUD-approved homebuyer education course; applicants generally may not own another home at the time of purchase.
Lexington-Fayette Urban County REACH Home Program
The REACH HOME Program offers a second mortgage to cover down payment and closing costs, with assistance amounts up to $20,000 for a 1-person household, $25,000 for a 2-person household, and $30,000 for households of three or more.
Eligibility: Applicants must have lived in Bourbon, Clark, Fayette, Jessamine, Scott, or Woodford County for at least one year prior to purchase, buy a primary residence in Fayette County, and complete REACH’s required homebuyer education while meeting income and program guidelines.
Down Payment Assistance Programs by City
Major cities like Louisville and Lexington operate robust local programs to expand homeownership opportunities.
Louisville Metro Down Payment Assistance Program
Louisville Metro DPA provides up to 20% of the purchase price, capped at $30,000, as a 0% interest, partially forgivable loan. Buyers must maintain the home as their primary residence for the required affordability period.
Eligibility: Buyers must have income at or below 80% of AMI, purchase within Louisville/Jefferson County, and meet current price caps of $260,000 for existing single-family homes and $331,000 for new single-family homes.
Louisville “Delta Home” Program (Healthy Start Families)
The Louisville Delta Home Program provides up to $25,000 in forgivable assistance to families engaged in Louisville’s Healthy Start program. The loan is fully forgiven after 5 years of the borrower's owner occupancy.
Eligibility: Buyers must not have owned a home in the past 12 months, have income at or below 100% of AMI, purchase a home priced at or below $260,000, and commit to pre- and post-purchase financial counseling.
Additional Kentucky Down Payment Assistance Programs
Below are other active programs that weren’t highlighted above but may still be worth exploring.
Statewide Programs
- Chenoa Fund (Nationwide program available in Kentucky)
Understanding AMI Requirements
Many Kentucky DPA programs require applicants to earn no more than a certain percentage of area median income (AMI) in the location where they're planning to purchase. While AMI limits will vary by program, many at fixed at 80% area median income
You can search for local area median income using the Fannie Mae AMI Lookup Tool.
How does this work? Say, for example, the program you're applying for limits eligibility to applicants earning no more than 80% AMI and the area median income where you're buying is $112,000. Here, you could earn up to $89,600 and still qualify for down payment assistance.
Buying a Home in Kentucky With Down Payment Assistance
Down payment assistance can be a powerful tool for Kentucky homebuyers, helping to make homeownership more affordable and within reach. Whether you’re purchasing your very first place or upgrading to a new home, these programs can ease the burden of upfront costs. Be sure to keep an eye on current mortgage rates and try out our loan calculators to get a clear picture of what fits your budget. With the right support, achieving your goal of owning a home in Kentucky could be closer than you think.
