Expanded Eligibility for First Time Homebuyer Program to Benefit Qualified Homebuyers, Lenders

Kansas Housing Resources Corporation
Kansas Housing Resources Corporation

Homeownership is within reach for more Kansas families thanks to expanded eligibility guidelines for the state's First Time Homebuyer program.

Administered by Kansas Housing Resources Corporation (KHRC), the program helps income-eligible households purchase their first home by providing down payment and closing cost assistance.

"KHRC wants to keep the dream of homeownership alive for Kansas families despite recent increases in home values and interest rates," said Ryan Vincent, KHRC's Executive Director. "By expanding eligibility for first-time homebuyers, we're making homes more affordable, enabling households to build equity and helping families invest in future generations of Kansans."

The First Time Homebuyer Program assists those purchasing their first home or those who have not owned a home for at least three years and earn no more than 80 percent of their area's median income. Homebuyers must make a modest down payment investment and are eligible for an interest-free loan in the amount of 15 or 20 percent of the home's purchase price. The loan is forgiven if the buyer remains in the home for 10 years.

Recent program updates have expanded eligibility:

  • Debt-to-income ratio of up to 45 percent. Previously, homebuyers could spend up to 41 percent of their monthly income on debt such as car loans, credit cards and student loan payments.
  • PITI (mortgage payments including principal, interest, taxes and insurance) ratio of 15 to 30 percent. Previously, applicants were required to devote 20 to 30 percent of their monthly income to PITI.
  • Homebuyer down payment contribution of 1 to 10 percent. Qualified participants were previously required to contribute 2 to 10 percent of the home's sale price.
  • Adjusted interest rates. To accommodate a broader range of credit scores, lenders can now set interest rates up to .65 percent higher than Freddie Mac, a .15 percent increase from the previous limit.

Other updates will modernize and streamline the application process for lenders and homebuyers. These include allowances for electronic signatures in place of original signatures and encrypted emails to replace faxed applications.

Funded by federal HOME funds, the state's FTHB program assists with home purchases throughout the state except for within the city limits of Topeka, Lawrence, Wichita or Kansas City or Johnson County. These areas administer their own HOME funds.

KHRC also administers the Home Loan Guarantee (HLG) for Rural Kansas, which helps existing and prospective homeowners in rural counties by covering the gap between the loan and the appraisal for building or renovating a home.

Kansas Housing Resources Corporation (KHRC) is a self-supporting, nonprofit, public corporation committed to helping Kansans access the safe, affordable housing they need and the dignity they deserve. KHRC serves as the state's housing finance agency, administering essential housing and community programs to serve Kansans.

(Information courtesy KHRC.)