Develop Louisville Down Payment Assistance Program

What is Develop Louisville Down Payment Assistance Program?

Develop Louisville Down Payment Assistance Program is a forgivable loan for homebuyers in Louisville, Kentucky, administered by Louisville Metro Government, Office of Housing & Community Development (Develop Louisville).

• Develop Louisville's Office of Housing & Community Development offers down payment and closing cost assistance to low- and moderate-income homebuyers purchasing in Louisville/Jefferson County. Assistance is a partially forgivable 0% interest second mortgage of up to 20% of the purchase price, capped at $40,000, based on need. Buyers occupy as primary residence for a 5- or 10-year affordability period; 50% is forgiven by the end and the remainder is due interest-free only at sale.
• 0% interest forgivable second mortgage.
• Up to 20% of purchase price (max $40,000).
• 50% forgiven by end of affordability period.
• No prepayment penalty.
• Remaining balance interest-free, due only at sale.
• Available to repeat buyers who don't currently own.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from Federal HOME Investment Partnerships Program (HUD).

How much assistance does it provide?

Develop Louisville Down Payment Assistance Program offers up to $40,000 in assistance.

• Amounts are the program's published maximums, not an offer — Louisville Metro Government, Office of Housing & Community Development (Develop Louisville) determines any individual award.

Do you have to pay it back?

Develop Louisville Down Payment Assistance Program is forgiven after 10 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by Remaining (unforgiven) principal is due upon sale; 50% forgiven by end of the 5- or 10-year affordability period. Loans <=$14,999: 5-year POA, 50% forgiven at year 5. Loans $15,000-$40,000: 10-year POA, 10% forgiven per year years 6-10.
• The assistance is recorded in Second mortgage position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Develop Louisville Down Payment Assistance Program is open to buyers who will live in the home as their primary residence.

What are the income limits?

Develop Louisville Down Payment Assistance Program limits household income to 80% of the area median income, which varies by county and household size.

• Household gross income at or below 80% of HUD area median, adjusted for family size. 2024: 1p $54,000; 2 $61,700; 3 $69,400; 4 $77,100; 5 $83,300; 6 $89,450; 7 $95,650; 8 $101,800.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Develop Louisville Down Payment Assistance Program caps the purchase price at $260,000.

• Eligible property types include Single Family, Condo, Co-op, Modular, and 2-4 Unit.
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

Develop Louisville Down Payment Assistance Program is a federal program, so it is not limited to Kentucky.

• The program targets specific areas: Encourages homeownership in Metro's Neighborhood Revitalization Strategy Area (Russell) and vacant/abandoned property reinvestment; can combine with the Louisville Affordable Housing Trust Fund REVERT program.

How do you apply?

Applications for Develop Louisville Down Payment Assistance Program go through Louisville Metro Government, Office of Housing & Community Development (Develop Louisville), which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through Minimum 6 hours of homeownership counseling from a HUD-certified agency (Apprisen, eHome America, REACH KY, HPI, Louisville Urban League).

2. 2

   Contact Louisville Metro Government, Office of Housing & Community Development (Develop Louisville) to reserve funds

   Funds are reserved with the provider and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.