The housing market in Kentucky is blooming. The median home price in this state increased from $198,00 in 2022 to roughly $250,000 in April 2022, resulting in a 13% rise in property prices in only 12 months. The numbers are even higher in particular Kentucky communities. The price rise can be profitable for home sellers but pose a significant challenge for low-income home buyers, primarily single mothers in Kentucky. Fortunately, a lot of federal, state, and county programs are available for single mothers in Kentucky, which enables them to get an affordable mortgage or down payment assistance if they can meet home price and income limits. Becoming eligible for long-standing federal loan programs like FHA, USDA, or VA loans can improve your chance of becoming a homeowner in Kentucky.
Are There Home Loans For Single Moms In Kentucky?
Saving for closing costs and a down payment can be demanding for single mothers buying a property for the first time in Kentucky. Fortunately, a lot of affordable home loans, special mortgages, tax credits as well as down payment assistance are available for single mothers in Kentucky that enable them to fulfill their dream of having a property of their own where they can grow and raise their children in a safe and secure space.
Single Mom Home Loans In Kentucky
The KHC, or Kentucky Housing Corporation, provides many programs for eligible low-income home buyers or first time home buyers. These programs are designed to assist low-income earners and their families to get stable housing provided they can meet the purchase price and income limits. Generally, the home that they intend to buy by availing of these programs should be their primary residence, and they are also required to complete a homebuyer education course before applying.
1. KHC Conventional Preferred Loan Program
This loan program is designed for first-time home buyers in Kentucky and provides a fixed rate 30-year mortgage with a down payment ranging up to 3%. You must pay mortgage insurance on this loan program at lower interest rates. Single mothers and other home buyers are required to take an education course, have income below 80% of the area’s median income, have a credit score of a minimum of 660, and should make sure that the purchase price limit does not exceed $349,525.
2. KHC Conventional Preferred Plus 80
Similar to the Conventional Preferred Loan program, Conventional Preferred Plus 80 loan program also provides home buyers a 30-year mortgage and a down payment of 3% with some notable differences. Buyers have to take standard mortgage insurance with this loan, and the income limit of this program is also higher. This program can be used with KFC down payment assistance program, and buyers must fulfill the income limits, take a home buyer education course, make sure the home purchase price limit is less than $349,525 and should have a minimum credit score of 660 before applying.
3. DAP, KHC Regular Down Payment Assistance Program
Every first mortgage borrower in Kentucky can apply for the down payment assistance program. The program provides down payment assistance to home buyers through a second loan of $7500, which is repayable over ten years at an interest rate of 3.75%. The DAP program is available throughout Kentucky. The minimum credit score should be 620, and the property’s purchase price should not exceed $349,525.
Federal Programs For Single Moms And First-Time Home Buyers
Single moms in Kentucky who are looking for first-time home buyer assistance can avail of a lot of federal programs, especially if they are unable to secure a traditional mortgage due to low-income and low credit scores. These programs are exclusively designed for first-time home buyers; however, in some instances, repeat homeowners can also avail of them if they meet their eligibility criteria.
1. FHA, Federal Housing Administration Loans
The Federal Housing Administration backs the FHA loan. Single mothers having a minimum credit score of 580 or higher are required to pay a 3.5% down payment, while those who have a credit score as low as 500 should make a down payment of up to 10%. Home buyers must pay mortgage insurance premiums until they refinance, move or pay off their loan.
2. Department Of Veterans Affairs Loans
This loan program is designed only for service members, veterans, and their eligible surviving family members and spouses. The best thing about this program is that it requires zero down payment. The credit score requirements may vary depending on VA loan lenders; however, you never need a minimum score of 620 to be eligible. If you have a military service history, you can check the eligibility criteria and apply for these loans.
3. United States Department Of Agriculture, USDA Loans
USDA loans are designed for low or moderate-income families, including single mothers looking to buy properties in targeted rural areas. USDA loans require no down payment. The mortgage insurance rates are pretty low. The credit score requirements may vary depending on the USDA-approved lenders, but often, the minimum credit score required to have is 640.
City And County Home Buyer Loan Programs
There are many city or county home buyer programs and loan options available for single moms in Kentucky. For instance, the Louisville Metro Down Payment Assistance Program provides closing cost and down payment assistance to single mothers and other eligible low-income earners through 0% interest partially forgivable loans. Another local buyer assistance program in Kentucky is the Lexington First Time Home Buyer Program which offers non-repayable mortgage subsidies and 0% to 2% loans for single mothers and low-income earners.
Being a single mother in Kentucky can be challenging, especially if you have a low income and a poor credit score. Even though you have done your mortgage calculations and are confident about paying the monthly payments, saving money for closing costs and down payment can be a significant obstacle. Single mothers in Kentucky who are unable to attend homeownership goals because of financial limitations can avail a lot of financial resources and loan programs that help them to reduce their costs.