2024 Kansas First-Time Homebuyer Programs and Loans
Kansas provides first-time homebuyers looking to live within its boundaries a wealth of options to help cover down payments and closing costs. Aimed primarily at low- and moderate-income families, these programs often offer zero-interest loans or grants worth several thousand dollars to make purchasing property more affordable, but come with several qualification hurdles. Find out what programs are available in your area and how you can qualify.
First-time homebuyer programs in Kansas
Down payment assistance programs for first-time homebuyers in Kansas are available through the Kansas Housing Resources Corporation (KHRC) as well as several other municipal organizations. Qualifying for such aid typically requires that you meet income limits and commit to living in your new property for a certain number of years. First-time homebuyer programs in Kansas include:
- Kansas Housing First-Time Homebuyer Program
- Kansas DPA
- FHLBank Topeka Homeownership Set-Aside Program
- City of Leavenworth Home Ownership Program
- Topeka Opportunity to Own (TOTO) Program
- City of Wichita’s HOMEownership 80 Program
Kansas Housing First-Time Homebuyer Program
If your earnings equal 80% or less of your area’s median income, you could qualify for a 0% interest loan worth between 15% and 20% of the home’s purchase price to help cover the cost of a down payment. Applicants are required to be first-time homebuyers or have not owned a property for at least three years, and will need a down payment of at least 1% but no more than 10% of the sale price.
To take full advantage of this loan’s generous terms, you must remain in the purchased home for 10 years before selling or refinancing. Otherwise, the loan will not be forgiven and you’ll be on the hook to repay the balance. The program is open to Kansas residents living anywhere in the state, excluding Johnson County, Kansas City, Lawrence, Topeka and Wichita.
Requirements
- There is no credit score requirement, but you will need to be approved for a mortgage from a participating KHRC lender
- Your income must be at or below 80% of the median income in your area
- Loans can only be used to purchase existing homes that do not typically require a lot of repair work
- The purchased home cannot be in Johnson County, Kansas City, Lawrence, Topeka or Wichita
Pros and cons
| Pros | Cons |
|---|---|
0% interest loan worth 15% to 20% of the home price Loan is forgiven if you stay in the home for at least 10 years No credit score requirement | Income must be under a certain threshold Not available statewide Cannot be used to build a home |
Kansas Down Payment Assistance
Through this down payment assistance program, aspiring first-time or repeat homebuyers can qualify for a 30-year fixed-rate mortgage as well as a grant, which covers a portion of the purchase price to make affording closing and down payment costs easier. The size of the grant varies but will always be a percentage of the home’s sale price. Nabbing this free assistance does come with certain hurdles, like a credit score requirement and your earnings can’t top a certain income threshold for your area.
Requirements
- Minimum 640 credit score
- Most Kansas residents must make less than $128,380 to qualify. Nemaha County residents can earn up to $129,500, Wallace County buyers can make $130,480 or less, for Lawrence residents the limit is $132,440, while those in Kansas City have an income limit of $143,500.
- You must be approved for a 30-year-fixed rate mortgage with a Kansas DPA-approved lender
Pros and cons
| Pros | Cons |
|---|---|
Do not need to repay the grant Various home types qualify Works with government-backed or conventional mortgage | Must meet minimum credit score Earnings must be below area-specific income limits to qualify |
FHLBank Topeka Homeownership Set-aside Program
First-time homebuyers earning 80% or less of their area’s median income can qualify for down payment, closing cost and repair assistance through the Homeownership Set-Aside Program, run by FHLBank Topeka. Applicants could receive between $2,500 and $15,000 in the form of a forgivable grant to help achieve their home-buying dreams, but they must agree to live in the purchased home for at least five years before selling or refinancing. Applications must go through one of FHLBank Topeka’s partners.
Requirements
- Your earnings cannot exceed the income limits
- The desired property must be in Kansas, Colorado, Nebraska or Oklahoma
- You must reside in the purchased home for five years
- You must take a homebuyer education course from an approved provider
- Apply before this annual program closes on Nov. 29, 2024
Pros and cons
| Pros | Cons |
|---|---|
Forgivable grant up to $15,000 Available statewide Open to all homebuyers | Mortgage must be obtained through an FHLBank Topeka member Must live in the home for five years or else pay back the grant Earnings must be under area-specific income limit |
City of Leavenworth Home Ownership Program
Home buyers looking to settle in Leavenworth can qualify for loans worth up to $8,000 to help them purchase property if their earnings fall under the U.S. Department of Housing and Urban Development’s (HUD’s) income limits. Loan recipients must live in the purchased home for at least five years otherwise the grant will have to be repaid. To qualify, applicants cannot have owned a home within the past five years, must provide one-half of the required down payment from their savings, and buy a home valued at $238,000 or less.
Requirements
- You must earn below HUD’s income limits
- The home cannot cost more than $238,000
- You will need to provide half of the required down payment
- You cannot have owned a home in the past five years
- The home you buy must be in Leavenworth
- You will need to be preapproved for a fixed-rate mortgage
- You must take a homebuyer education course from an approved provider
Pros and cons
| Pros | Cons |
|---|---|
Up to $8,000 in down payment help Grant funds do not need to be repaid No minimum credit score | Home purchases cannot exceed $238,000 Must meet HUD income limits Cannot have owned a home for at least five years Limited to Leavenworth |
Topeka Opportunity to Own (TOTO) Program
First-time homebuyers wanting to settle in Topeka can get up to $10,000 in down payment assistance or as much as $30,000 to repair a home through the city’s Opportunity to Own program. These grants will be fully forgiven after you’ve lived in the home for five years. You will need to earn less than HUD’s income limits, buy a property worth $75,000 or less and have at least $500 saved toward a down payment to qualify.
Requirements
- You must earn less than 80% of the area median income
- The home sales price cannot exceed $75,000
- You must have at least $500 for a down payment
- The home must be in Topeka
- You cannot own any real estate at the time you purchase the home
- You will need to attend 12 hours of homebuyer training courses
Pros and cons
| Pros | Cons |
|---|---|
A small down payment required Forgivable grant No minimum credit score | Home sales price cannot top $75,000 Must meet income limits Can only be used in Topeka Must reside in the home for five years |
City of Wichita’s HOMEownership 80 Program
Those looking to buy a first home in certain areas of Wichita may be able to take advantage of the city’s down payment and closing cost assistance program. Through these zero-interest deferred loans, you may be able to borrow up to 20% of the home’s purchase price plus an additional $2,000 to cover closing costs. The loans are partly forgivable too. Half of the loan can be waived after five years if you’ve borrowed less than $15,000 or after 10 years if you borrowed more. Sell or refinance before that time and you will need to pay the whole loan back.
To qualify, you’ll need to earn less than the Department of Housing and Urban Development’s income limits and purchase a newly constructed single-family home developed by one of the city’s Community Housing Development Organizations, for-profit partners or nonprofit partners.
Requirements
- You must earn less than 80% of the area median income
- You will need to be referred by and buy a home through one of the city’s partner organizations, such as Mennonite Housing or Wichita Habitat for Humanity
- You must put down $1,000 of your own money
- You must qualify for a 30-year fixed-rate mortgage
- You will need to attend a homebuyer training class
- You cannot have owned a home in the past three years unless you are a single parent of minor children
Pros and cons
| Pros | Cons |
|---|---|
Partially forgivable loans worth up to 20% of the purchase price 0% interest rate loan Up to $2,000 in closing cost assistance | Must be referred for the program by a partner organization Need to earn less than 80% of area median income Loans are limited to certain sections of Wichita |
Kansas first-time homebuyer qualifications
Each first-time homebuyer program in Kansas comes with its own set of application criteria, but common requirements include having not owned a home in the past few years, a credit score of 640, annual earnings below 80% of your area’s median income, purchase price limits and purchasing property in a specific county or city.
Steps to apply for a first-time homebuyer program
- Check that you meet the income requirements. Since these down payment assistance programs are intended to help low- to moderate-income families afford a home in Kansas, your income cannot exceed a certain threshold. For most programs, this means you’ll need to show that your earnings equal 80% or less of your area’s median income.
- Save enough for the minimum down payment. While these programs help cover down payment costs, some require that you also devote some of your savings to this expense as well. For instance, the City of Leavenworth Home Ownership Program requires that you provide the funds for at least half of the required down payment.
- Become approved for a mortgage by an accepted lender. Most of Kansas’s homebuyer assistance programs require you to first obtain preapproval for a mortgage, typically a 30-year fixed-rate one, from a list of accepted lenders. While it depends on the standards of the individual lenders, generally, you’ll want to have at least a credit score of 640, but higher is always better, especially given the average credit score in the state is 723, according to Experian. Each lender may also have their own unique qualification criteria and approval process.
- Find a home in the right area at the right price. While some of Kansas’s first-time homebuyer assistance programs can be paired with a home purchase anywhere in the state, most come with location limitations requiring you to buy within a specific city or county. For instance, the Kansas Housing First-Time Homebuyer Program cannot be used by home shoppers in Kansas City, Lawrence, Topeka, Wichita or Johnson County. Additionally, many programs set limits on the maximum price you can purchase a home for. For example, the Topeka Opportunity to Own Program caps home values at $75,000, while the City of Leavenworth Home Ownership Program stipulates that homes cannot cost more than $238,000.
- Take a homebuyer education class. Several programs require that you complete a homebuyer training course from an approved provider before approving you for down payment assistance. While these classes are usually free, you are expected to pay close attention.
- Be willing to commit. Many first-time homeowner programs in Kansas are forgivable loans that require you to spend at least five to 10 years residing in the home to retain the financial assistance. If you sell or refinance the home before that time, you could end up repaying the entire loan balance.
Understanding Kansas first-time homebuyer down payment assistance
Most of the Kansas homebuyer assistance programs provide money to help with down payment and closing cost expenses through forgivable loans or grants. But some buyers may encounter different forms of aid.
Deferred second mortgage
Used to cover down payment and closing costs, this type of mortgage loan acts as a second lien on your home but doesn’t require you to make any monthly payments. Instead, you repay this second mortgage when you refinance or sell your home. Many times, these loans also charge zero interest.
Forgivable second mortgage
Most of Kansas’s homebuying assistance programs provide help with down payment or closing costs through forgivable 0% interest second mortgages. Similar to a deferred second mortgage, these loans also act as a second lien on the property but do not need to be repaid as long as you live in the home for a certain number of years. If you sell or refinance the home early, the loan will typically not be forgiven and must be repaid.
Grant
Some of the homebuying assistance programs in Kansas offer housing grants to help cover closing costs or the down payment. Unlike a deferred or forgivable second mortgage, this form of aid is not a second lien and does not need to be repaid.
Mortgage credit certificate
Kansas does not offer a mortgage tax credit certificate program.
Keep these things in mind about DPA programs
Most of the first-time homebuyer assistance programs in Kansas require that you live in the home for a certain number of years, typically five or 10, before the loan or grant can be forgiven. If you sell or refinance early, you risk having to repay the aid you received.
How much of a down payment do I need to buy a house in Kansas?
How large a down payment you’ll need to secure a home in Kansas varies widely depending on the purchase price of the home, the type of mortgage you obtain and the requirements of the lender.
On average, first-time homebuyers in Kansas spent $25,595 on their down payment in 2023, amounting to about 10.5% of the $244,027 typical sales price of properties they purchased, according to LendingTree data. However, you may qualify for a loan with a much smaller down payment. For instance, the state’s first-time homebuyer program permits down payments as small as 1% of the purchase price, and government-backed VA and USDA loans can be obtained with no down payment.
Can I qualify for down payment assistance in Kansas?
To take advantage of one of Kansas’s down payment assistance programs, you must clear certain qualification hurdles – the biggest of which is earning below a certain income limit. Shoppers typically need to be first-time homebuyers or have not owned property within the past three to five years. Many programs also come with stipulations requiring you to remain in the purchased home for five to 10 years, take a homebuying education course, get preapproved for a 30-year fixed-rate mortgage and buy within a certain geographic area.
How do I apply for Kansas first-time homebuyer down payment assistance?
Depending on the type of Kansas down payment assistance program you’re interested in, you may need to be referred through a nonprofit or partner organization. Otherwise, you may be able to apply online or contact the program administrators for instruction. A program’s approved mortgage lenders may also be able to walk you through the process.
Here’s what you need to know about the process of applying for a home loan.Other first-time homebuyer loan programs
Conventional loans
Mortgages that are not backed by a government entity are known as conventional loans. This type of mortgage usually offers qualifying homebuyers the chance at favorable interest rates and terms, but comes with its own set of restrictions, like needing a credit score above 620.
FHA loans
Insured by the Federal Housing Administration, these mortgages allow those with low credit scores and limited down payment savings. Since lenders know they will be reimbursed by the government if you default on your payments, they accept borrowers with credit scores as low as 500. The trade-off is FHA loans are capped at a certain loan size, require a 3.5% or 10% minimum down payment depending on your credit score, require two kinds of mortgage insurance, and the purchase of an FHA home appraisal.
VA loans
Designed to help military service members and veterans purchase property, these government-backed mortgages require no down payment, no minimum credit score and no mortgage insurance. In addition, they typically charge competitive interest rates and closing costs than other loans. VA loans do, however, come with some unique expenses, such as the VA funding fee, which is an extra upfront cost ranging between 1.5% and 3.3% of the total loan amount for most purchase loans, and a VA home appraisal, which can cost between about $500 to $1,200.
USDA loans
Intended to help low- and moderate-income homebuyers afford a property in certain rural areas, USDA loans come with no down payment or credit score requirements. However, borrowers will need to earn below their income limits to qualify. These loans can offer lower interest rates than other kinds of mortgages, but may come with additional costs, like a guarantee fee.
What are the best first-time homebuyer loans?
The best first-time homebuyer loan will vary depending on a borrower’s financial situation. There are four main kinds of mortgages available to first-time buyers and each one has unique advantages.
| Loan program | Best for first-time homebuyers who: |
|---|---|
| Conventional | Have good credit and can afford to make at least a 3% down payment |
| FHA | Have poor credit and can make a down payment of 3.5% |
| VA | Are active military members, veterans or a surviving spouse and lack down payment savings |
| USDA | Have low to moderate incomes and want a home in a rural area |
Home price trends in Kansas’s major areas
Buying a home in Kansas has become a pricer endeavor in the past year. Across the state, home prices rose 8.82% in 2023, according to the Federal Housing Finance Agency. Those home shopping in the state’s major metro areas saw prices shoot up even more. In the Wichita metro, home prices rose 10.5% from the end of 2022 to the end of 2023. This increase earned it the distinction of having the 13th steepest cost hike across the country’s top 100 metro areas. The Kansas City metro, which straddles the Missouri-Kansas state border, saw home prices rise 8.9%.
Is there a first-time homebuyer tax credit in Kansas?
While there is no federal tax credit for first-time buyers, Kansas does, however, offer a tax break to residents making a first-home purchase. The Kansas First-Time Home Buyer Savings Account allows single filers to deduct as much as $3,000 per year from their taxable state income. Joint filers can deduct as much as $6,000.Furthermore, there are other tax credits and deductions associated with homeownership.
What are the current mortgage rate trends in Kansas?
Over the course of 2024, mortgage rates for 30-year and 15-year fixed-rate loans and 5/1 ARMs have moved up and down to a certain degree, but the interest rates for each of those products are quite close to where they started the year. To view rates specific to your financial situation and location in Kansas, check out LendingTree’s mortgage rates marketplace.
Current 30-year fixed mortgage rates are averaging: 6.96%
Current 15-year fixed mortgage rates are averaging: 6.24%