AFR announces homebuyer program to grant 2% of purchase price, 6% of closing costs

Down Payment Grant Kentucky Home Buyers down to 580 Credit Score
DPA Grant from AFR for 2% Grant to Buy a Home Down to a 580 Credit Score. 1.5% still needed from borrower to satisfy FHA loan requirements

American Financial Resources announced its new down payment assistance program that will provide grants for homebuyers, and caters especially to teachers, military members and first responders. The program will grant up to 2% of the purchase price and up to 6% of closing costs.

Source: AFR announces homebuyer program to grant 2% of purchase price, 6% of closing costs

DPA Advantage Program Guidelines

Borrower Eligibility – Must meet one of the following three categories outlined below

  • First-time Home Buyer
    • Purchasing the subject property
    • Will reside in the subject property as their principal residence
    • Has no ownership interest in any residential property, for a period three years prior to the date of application.
      • The exception will be for an individual who is a homemaker or single parent with no ownership interest in a principal residence, other than a jointly owned property with a former spouse, during the three-year period prior to the date of the application
  • Borrower(s) Income
    • The borrower, or borrowers if multiple applicants on the loan application, income must be equal or less than 140% of the state or county median income regardless of family size
      • To determine the median income use the following web tool to determine median income
      • Borrower(s) income must be less than the median income * 1.4
      • If overtime income is not used to qualify the borrower, then the overtime income doesn’t not count towards the 140%
      • The income that the underwriter will use to qualify the borrower is what will be compared to the 140%
  • Current or Retired Employment or Volunteer/Non-Paid Member
    • Any borrower on the loan application is a current, retired, or volunteer, which includes:
      • First responder (includes police officer, firefighter, public safety officer, paramedic, EMT)
      • Educator (includes Sunday school teacher, tutor, day care provider)
      • Medical personnel (includes nurse, doctor, phlebotomists, health ambassador, Red Cross worker)
      • Civil Servant in Federal, State, or Local Municipality
      • Military Personnel
  • Borrower(s) must complete an 8 hour, first-time Homebuyer education course from a HUD approved Housing Counseling Agency. Click Here for a list of HUD approved counseling agencies
    • Online counseling is acceptable. Click Here for an example of one national counseling agency
    • Only one borrower must take the first-time Homebuyer education course
    • If the borrower has already completed another approved course that will be acceptable provided the course expiration is after the closing on the loan

Down Payment Requirements from Homebuyer

  • When factoring in the DPA Advantage grant the borrower is responsible for a down payment equal to 1.50% of the purchase price (FHA 3.50% down payment, minus DPA Advantage Programs 2.00 Grant)
  • The borrowers 1.50% down payment responsibility can come from flexible sources such as a family member gift or a loan against a 401k retirement account

Eligible Properties

  • Existing homes
  • New Construction
  • Includes: single-family one-unit residence, townhomes, detached, condominiums, and modular homes

Interest Rate

  • The interest rate on the DPA Advantage Program is significantly higher than a standard FHA Loan

Loan Type:

  • FHA 203 (b)
  • FHA 203 (k) Standard
  • FHA 203 (k) Limited
  • FHA Repair Escrow

Maximum Purchase Price

  • The maximum purchase price is the lower of FHA maximum County loan limit or the conforming loan limit, which is currently $484,350
  • Click Here to determine the maximum base loan amount for a FHA Loan, based on the County in which the property is located

Maximum Debt-To-Income (DTI)

  • Maximum DTI limit is 48.99

Minimum Credit Score

  • FHA: 580

Multiple Property Ownership

  • Not permitted

Occupancy Type

  • Primary residence only
  • Non-occupant co-signers allowed, so long as the primary borrower meets one of the three requirements for the DPA Advantage Program

Repayment Requirements and Affordability Period

  • None. Completely forgivable grant
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916

— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.


Kentucky Home buyers Down Payment Grants for 2020

Kentucky Housing has $6,000.00 in Down Payment Assistance for 2020

Here are action steps you can take right now to buy a home in Kentucky in 2020

1. Focus on your credit score

FICO credit scores are among the most frequently used credit scores, and range from 350-800 (the higher, the better). A consumer with a credit score of 750 or higher is considered to have excellent credit, while a consumer with a credit score below 620 is considered to have poor credit.

To qualify for a mortgage and get a low mortgage rate, your credit score matters.

Each credit bureau collects information on your credit history and develops a credit score that lenders use to assess your riskiness as a borrower. If you find an error, you should report it to the credit bureau immediately so that it can be corrected.

2. Manage your debt-to-income ratio

Many lenders evaluate your debt-to-income ratio when making credit decisions, which could impact the interest rate you receive.

A debt-to-income ratio is your monthly debt payments as a percentage of your monthly income. Lenders focus on this ratio to determine whether you have enough excess cash to cover your living expenses plus your debt obligations.

Since a debt-to-income ratio has two components (debt and income), the best way to lower your debt-to-income ratio is to:

First Ratio – The first ratio, top ratio or housing ratio. Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment. The housing payment consists of Principle, Interest, Taxes and Insurance. Whether you escrow or not every one of these items are factored into your ratio. There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.

Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has. So, it includes housing payment as well as every other debt that a borrower may have. This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on. Again, if you’re paying less than 45% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe. You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.

3. Keep credit utilization low on your credit cards

Lenders also evaluate your credit card utilization, or your monthly credit card spending as a percentage of your credit limit.

Ideally, your credit utilization should be less than 30%. If you can keep it less than 10%, even better.

For example, if you have a $10,000 credit limit on your credit card and spent $3,000 this month, your credit utilization is 30%.

Here are some ways to manage your credit card utilization:

  • set up automatic balance alerts to monitor credit utilization
  • ask your lender to raise your credit limit (this may involve a hard credit pull so check with your lender first)
  • pay off your balance multiple times a month to reduce your credit utilization

4 . Look for down payment assistance in Kentucky

There are various types of down payment assistance, even if you have student loans.

Here are a few:


5000 grant welcome home

There are federal, state and local assistance programs as well so be on the look out.

If you want a personalized answer for your unique situation call, text, or email me or visit my website below:

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.
10602 Timberwood Circle 
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708