An explanation of different types of loan programs for Kentucky Home BuyesIf you don't have perfect credit or do not have the 20% for a traditional down payment, you may still be able to get a Kentucky mortgage. Consumers with slightly blemished credit are able to qualify for Kentucky mortgages with fairly competitive rates.
Kentucky Fannie Mae, for example, offers an expanded approval program for those who may not qualify for fair-market value rates through traditional lenders.
Kentucky FHA Loans- If you credit isn't good enough for a Ky Fannie Mae loan, you may still qualify for a loan through the Federal Housing Authority (FHA). The loans are government backed and have lower credit criteria. You can put as little as 3% down and finance your closing costs in your mortgage. There are no income limits for Kentucky FHA loans. However, these loans are primarily for first-time homebuyers and low to moderate income families. There are limits to how much you can borrow.
Private lenderslenders have come up with a lot of programs designated for first-time home buyers. le. This also eliminates the need for private mortgage insurance.
Below are some other example lending programs that help low income and moderate income families buy, build, or remodel homes.
- 502 Loans - These are subsidized, low interest loans which are provided to families with low to moderate incomes. Depending on income, house payments can be reduced through an adjustable interest rate.
- Single Family Home Ownership - Loans from Rural Housing Service for cities with population less than 20,000 provide direct loans for up to 100% of costs over 33 years.
- Kentucky Guaranteed 502 Loans - These loans are mostly for moderate income families and require no down payment. Loans are provided by approved commercial lenders, with loan note guarantee provided by Rural Development.
- Home Improvement and Repair - 504 Loans are made to qualifying low income families to remove health and safety hazards. Families can borrow up to $20,000 at 1% interest.
- Housing Preservation Grants - Qualifying nonprofit organizations and local government entities can receive these grants to remodel and repair homes in eligible low income areas.
- Rural Rental Housing Loans - Provides financing for the construction of affordable rental units in rural areas.
- Rental Assistance Programs - Provides subsidized rent to low income individuals, families, and the elderly in rural rental complexes.
- Communities Facilities - The Rural Housing Service is also responsible for administering Kentucky USDA's Rural Development Community Facility loan program. These loans provide communities a financial resource which can be utilized to construct or improve community facilities which provide essential services. Loans most often involve schools, hospitals, retirement and civic centers, along with local government buildings such as police and fire halls.
- Farm Labor Housing - Kentucky RHS has special loan and grant programs for rural farm worker housing.