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2022 Kansas First-Time Homebuyer Programs

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If you want to buy your first home in Kansas, there are programs that provide significant assistance to first-time homebuyers putting down roots in the Sunflower State. These first-time homebuyer programs provide down payment and closing cost assistance if you meet their eligibility requirements. Understanding how first-time homebuyer programs work may make it easier to navigate the application process.

Kansas statewide and local first-time homebuyer programs

The Kansas Housing Resources Corporation (KHRC) oversees statewide down payment assistance (DPA) programs geared toward first-time homeowners as well as others. City and county administration offices can also provide local first-time homebuyer assistance information.

Most of Kansas’s homeownership programs have specific eligibility requirements, such as income restrictions and remaining in the purchased home for a set period of time.

Below is a shortlist of these programs and how much assistance you may be eligible for depending on where you live in the state.

Program nameAssistance amountAssistance typeWhere it’s available
Kansas Housing First-Time Homebuyer ProgramUp to 20% of the down payment and closing costsForgivable loan over 10 yearsIn 18 counties (excluding Johnson County, Kansas City, Lawrence, Topeka and Wichita)
KansasDPA ProgramUp to 5% down payment assistanceGrant attached to a 30-year fixed mortgageAcross the state
Homeowners Set-Aside Program$7,500 cash for closing costs or home repairs5-year retention period grantKansas, Oklahoma, Colorado and Nebraska
CDBG Home Ownership Application$8,000 to use toward a down payment or closing costsGrantHome must be purchased in Leavenworth, Kansas

What to know about different types of down payment assistance

If you qualify for a first-time homebuyer program the funds will most likely come from a forgivable second mortgage loan or a grant. There are rules attached to the money that must be followed to avoid being forced to repay it.

Below are two types of homebuyer assistance available in Kansas.

Grant money. If you receive a grant to help you pay for a new home, no lien is recorded on your purchase. However, many grants come with requirements, such as living in the home for a set number of years. This means if you refinance or sell, you must pay back the grant money.

Forgivable loan. Depending on the type of loan, when you are given forgivable funds, you may be required to take out a fixed mortgage and remain in the home for a set number of years. A forgivable loan does not require a monthly (or any other) form of payment, and the lender charges no interest. When the time period ends, you will not owe any money on the loan. If you sell or refinance your home, you will be required to repay all or a portion of the money you received from the program.

How Kansas first-time homebuyer programs work

LendingTree researched 2022 Kansas housing programs to compile our list. Still, it’s worth noting that grants may be available throughout the year funded by local governments. Check with your local bank or credit union, Kansas-based housing nonprofits and even your local municipality to learn about them.

When applying to KHRC’s first-time homebuyer programs, you will need to meet a few requirements.

1. GET A MORTGAGE APPROVAL FROM A PROGRAM-APPROVED LENDER. The programs offered list a set of approved lenders for your first-time mortgage. It is advised to ask about each lender’s credit requirements as they may vary depending on the loan program.

2. MEET INCOME LIMITS. Down payment assistance is created to help low- to moderate-income earners buy their first homes. Most programs come with income limits — for example, some programs state you must earn less than 80% of the area’s median income.

3. MEET PAYBACK REQUIREMENTS BEFORE SELLING OR REFINANCING. First-time homeowner programs in Kansas come with strict criteria about how long you will need to occupy your home (or refinance) to avoid having to pay back your assistance.

What’s the process of applying and qualifying for a first-time homebuyer program in Kansas?

The first-time homebuyer program in Kansas allows income-eligible applicants to purchase their first home through a 0% interest loan in the amount of 15% or 20% of the purchase price. The loan is forgiven if the buyer stays in the home without refinancing for 10 years.

To apply for this program, follow the steps below.

  • Locate a home in an approved area. You can search for homes across Kansas, excluding Kansas City, Lawrence, Topeka, Wichita or Johnson County.
  • If applying for a program that calls for homeowner’s education, such as the Homeownership Set-aside Program and Leavenworth’s grant program, you will need to complete an education course on owning a home.

Search the KHRC website for a list of participating vendors. Each vendor, not the state, will guide you through its qualification and approval process.

Kansas first-time homebuyer program requirements

Kansas first-time homebuyer programs have strict requirements that you have to meet, including minimum credit scores, maximum debt-to-income (DTI) ratio, income limits and length of stay in the home.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in the home
Kansas Housing First-Time Homebuyer ProgramMust meet mortgage credit criteriaN/AMedian income at or below 80% of their area10 years
KansasDPA Program640Must meet lender’s criteriaLimits vary by county, from $108,360 to $122,360N/A
Homeownership Set-Aside Program640Must meet lender’s criteriaEarning at or below 80% of the area median income (AMI) for households purchasing or constructing homes in Colorado, Kansas, Nebraska and Oklahoma.Five years
CDBG Home Ownership ApplicationNot listed, other than “creditworthy”Must meet lender’s criteriaApplicants must meet low- to moderate-income guidelines as defined by HUD for their countyFive years

THINGS YOU SHOULD KNOW

Before you apply for a program, look up HUD’s median income limits, as most of the programs follow the eligibility criteria based on these figures. The limits determine your access to the down payment and closing costs assistance.

National first-time homebuyer programs

While the first-time home buyer programs in Kansas may help you cover the closing costs and down payment, you will need to take out a mortgage to receive the assistance. Several programs are available to help low- to moderate-income homebuyers who may not qualify for conventional mortgages, although you can use one.

Note: The loans listed below aren’t exclusive to first-time borrowers, although many first-timers may use them.

Conventional loans. Conventional mortgages can be challenging to obtain if you don’t have a high credit score or enough money for a higher down payment. They have strict requirements and higher loan limits than government programs. Homeowners needing a little help with a conventional mortgage may use the Fannie Mae HomeReady® and Freddie Mac Home Possible® programs because they have lower mortgage insurance premiums than FHA loans.

FHA loans. Many first-time homebuyers utilize FHA loans because of their higher debt ratios and lower credit score requirements. You will be required to pay two types of FHA mortgage insurance on the loans. Check the credit eligibility on any assistance programs before applying for an FHA. These loans only call for a score higher than 580, but to qualify for many Kansas programs, you’ll need an even higher score.

VA loans. If you are or have been in the military, the U.S. Department of Veterans Affairs (VA) guarantees VA loans. These loans are optimal for qualified first-time homebuyers because there is no down payment requirement and no loan limits or mortgage insurance. Because this loan doesn’t require a down payment, any state assistance you qualify for could be used for the closing costs or home repairs, if eligible.

USDA loans. Kansas is home to sprawling farmlands and small towns. If you have a low to moderate income, you may be able to finance the purchase of a home in a designated rural area using a U.S. Department of Agriculture (USDA) loan.

FAQs about Kansas first-time homebuyer programs

Who qualifies as a first-time homebuyer in Kansas?

You’re considered a first-time homebuyer if you haven’t owned a home in three years or you only owned a house with a former spouse while married. If you have owned a home in the past, you should reach out to the program administrators to find out how they define “first-time” homeowner.

Can I qualify for down payment assistance in Kansas?

If you meet the credit, income and location (in some instances) requirements of the program you want to use, you may qualify for down payment assistance.

How much of a down payment do I need to buy a house in Kansas?

Depending on the loan, you may not need any down payment to buy a house in Kansas. For example, VA and USDA loans don’t call for down payment funds. The minimum FHA loan down payment is 3.5%, and some lenders will only ask homebuyers for a 3% payment. If you qualify for the state’s first-time homebuyer program, you will only need to pay 2% of the asking price.

Home price trends in Kansas’s major areas

In the past two years, home prices across the country rose, and Kansas is no different. Sale prices rose 8.4% to $268,949 in December 2021, as compared with the previous year, according to statistics from the Kansas Association of Realtors.

If you want to purchase a house in Shawnee County, which includes the capital city of Topeka, the median listing price as of Q2 2021 was $153,023, up 10.5% from the year before. This translates to a mortgage payment of $581 per month, up from $541 year-over year. In Douglas County, which includes the college town of Lawrence, the median price was up 10.1% to $238,622, translating to a mortgage payment of $905, up from $847 a year earlier.

 

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