Homebuyer Assistance Program

Homebuyer Assistance Program is a forgivable loan for homebuyers in Covington, Kentucky. HUD HOME-funded forgivable second mortgage administered by City of Covington Neighborhood Services Department for the Northern Kentucky HOME Consortium (Covington, Ludlow, Erlanger, Independence, Florence, Newport, Bellevue, Dayton). Up to $10,000 at 0% interest, deferred with no monthly payment, forgiven 1/10 per year over 10 years. 80% AMI ceiling, $20K liquid asset limit, 31/43 DTI, HUD-approved counseling required. Adopted 7/15/2025 (ORD-195-2025). The Homebuyer Assistance Program (HAP) is a HUD HOME-funded zero-interest, deferred / forgivable loan administered by the City of Covington Neighborhood Services Department on behalf of the Northern Kentucky HOME Consortium (Covington, Ludlow, Erlanger, Independence, Florence, Newport, Bellevue, Dayton). Eligible buyers receive up to $10,000 toward lender-required down payment, customary closing costs, settlement charges, or to buy down the first-mortgage interest rate. The loan accrues no interest and requires no monthly payments. it is forgiven 1/10 per year over 10 years, becoming a full grant if the borrower owner-occupies the home for the entire 10-year period. Recapture (limited to net proceeds) is triggered only on sale, transfer, or non-owner-occupancy before the 10-year anniversary. Funding comes from Federal, HOME, and City.

Homebuyer Assistance Program is forgiven after 10 years, so a homebuyer who stays that long does not repay it. Repayment is triggered by Forgiven 1/10 per year of owner-occupancy over 10 years (becomes a grant at year 10). If property is sold, transferred, or vacated before 10 years, the unforgiven balance becomes immediately due and payable, limited to net proceeds (sales price - superior loan repayment - seller closing costs). The assistance is recorded in 2nd Lien position. Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Homebuyer Assistance Program is open to homebuyers who will live in the home as their primary residence. On credit, the program states: No specific city-imposed minimum FICO; first-mortgage lender overlays apply, plus credit history review by City staff. A homebuyer education course is required, through HUD-approved housing counseling agency required (HUD-certified counselor; certificate of completion before closing). Local HUD-approved providers in Northern Kentucky: Catholic Charities Diocese of Covington (859-581-8974), Northern KY Community Action Commission (859-581-6607), Brighton Center in Newport (859-491-8303). Also Housing Opportunities of Northern Kentucky (HONK) at 859-581-4665. Residency requirement: Property must be located within the Northern Kentucky HOME Consortium boundaries: Covington, Ludlow, Erlanger, Independence, Florence, Newport, Bellevue, or Dayton. Must be borrower's primary residence within 60 days of purchase and remain so for the 10-year loan term. Citizenship or immigration status: Per HUD HOME federal eligibility - U.S. citizen or qualifying non-citizen. Household income at or below 80% AMI per HUD (2025 limits: $62,650 (1p) - $71,600 (2p) - $80,550 (3p) - $89,450 (4p) - $96,650 (5p) - $103,800 (6p) - $110,950 (7p) - $118,100 (8p)). Maximum DTI 31% front-end / 43% back-end (KHC HAP underwriting overlay). Liquid asset limit $20,000 (excess must be applied to purchase before HAP funds). HUD-approved housing counseling required (certificate of completion before closing). Property must be owner-occupied or vacant 1- or 2-unit dwelling within Covington / Ludlow / Erlanger / Independence / Florence / Newport / Bellevue / Dayton city limits. First-mortgage product cannot be subprime (rate <= Freddie PMMS + 2.5%). Property must meet NSPIRE inspection standards. Pre-1978 homes must pass HUD Lead Safe Housing Rule lead-paint inspection. Borrower must have fee simple title; private contract / land contract purchases not eligible. Maximum purchase price/appraised-value-after-rehab varies by county and unit count: Campbell/Kenton (existing) $228,000 1u / $292,000 2u; Boone (existing) $268,000 1u / $343,000 2u; Campbell/Kenton (new construction) $326,000 1u / $417,000 2u; Boone (new construction) $338,000 1u / $433,000 2u. Borrower must occupy within 60 days of purchase. Apply online at portal.neighborlysoftware.com/COVINGTONKY/participant.

Homebuyer Assistance Program limits household income to 80% of the area median income, which varies by county and household size. Household income at or below 80% AMI per HUD HOME limits for the Northern Kentucky HOME Consortium (Cincinnati MSA / Boone-Campbell-Kenton). 2025 limits range $62,650 (1-person) to $118,100 (8-person). Seed-cited range $58,700-$110,700 reflects an earlier program-year HUD limit table. Part 5 income definition; tax returns not used for income determination but used for verification. The limit applies to total household income, not only the borrower&rsquo;s. The program lists a maximum household size of 8. Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

Homebuyer Assistance Program caps the purchase price at $433,000. Eligible property types include Owner-occupied or vacant 1- or 2-unit dwellings (2-unit must have been originally constructed for two units). Single-family detached, condominium, townhouse, manufactured home on permanent foundation (post-6/15/1976 must meet 24 CFR 3280 and pre-6/15/1976 must comply with city codes). Properties currently occupied by tenants are not eligible. New construction is eligible. Manufactured homes are eligible.

Homebuyer Assistance Program names veterans, active-duty service members, reservists and National Guard members, surviving spouses, and homebuyers with disabilities among the groups it serves. Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

Homebuyer Assistance Program serves homebuyers purchasing in Covington, Kentucky.

Applications for Homebuyer Assistance Program go through the administering agency, which publishes the current terms and the application steps on its own site. Funds are reserved through Online application via Neighborly Software portal at portal.neighborlysoftware.com/COVINGTONKY/participant. Apply any time, but funds reserved only with submission of a fully accepted purchase contract. First-come, first-served subject to annual HOME allocation. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.