Kentucky First Home Advantage Tax Credit Short Term Loan

First time home buyers in Kentucky can get up to $4500 to help with closing costs and down payment from the Kentucky Housing Corporation in a second mortgage loan. The First Home Advantage loan is intended to be paid back when the home buyer gets their $8000 federal home purchase tax credit in 2010.

If you are looking to buy your first home in Kentucky in 2009, you may qualify for the $8000 home purchase tax credit from the IRS if you buy your home before December 1, 2009. If you do qualify for the first time buyer tax credit and you are using a KHC first mortgage to buy your home you may also qualify for the First Home Advantage second mortgage loan program to help with your closing costs and down payment.

Specifics of the Kentucky First Home Advantage Second Mortgage

• Home buyers must meet KHC income and property value requirements (more information about income and property value guidelines in: Home Buying And Down Payment Assistance Programs In Kentucky.


• Mortgage payments on the Second Mortgage are deferred until July 1, 2010 - home buyers are encouraged to file for their 2009 home purchase tax credit in 2010 and use the tax credit refund from the IRS to payoff the Second Mortgage.


• If the loan is not paid in full by July 1, 2010 the interest rate will be adjusted to match that of the first mortgage interest rate or 6% if the first mortgage rate is less than 6%.


• You must have a credit scores of 620 or above to qualify. You must also be able to qualify for a first mortgage program with the second mortgage loan payment calculated into your debt to income ratio even if you are not going to start paying on it until July 1, 2010.


• The Second Mortgage must be paid in full if the first mortgage is paid in full, refinanced or assumed.


• To take advantage of the First Home Advantage Second Mortgage program you must qualify for and get a first mortgage through the Kentucky Housing Corporation and an approved participating mortgage lender in Kentucky.