We talked a great deal about the different combinations using an FHA/KHC first mortgage with down payment assistance (DAP). The DAPâ€™s are in the form of a second mortgages, some forgivable over time and one that must be repaid. Kentucky Housing DAPâ€™s range from $4,500 to $6,000.
This is how it works.
The first mortgage is an FHA/KHC loan for 96.5% of the purchase price.
The DAP is a second mortgage for 3.5% of the purchase price.
The seller can pay all of the closing cost and pre-paids.
The borrower only needs to pay for an appraisal (unless the seller pays for that too).
Inside scoop for you, I spoke to my source in Louisville Metro last week, they are expecting funding for their DAP program in July. Last year it was $10,000 a pop plus another $2,000 for closing costs. This program requires FHA home ownership classes so sign up soon if you want to grab this round.
Joel Lobb (NMLS#57916)
Senior Loan Officer
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*