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Kansas First-Time Homebuyer Programs

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First-time homebuyers in Kansas don’t have to shoulder the burden of a down payment all by themselves. Statewide assistance programs provide a whole lot of help for people struggling to make owning a home possible — up to an astonishing 20% of the home’s purchase price.

In January 2019, we reviewed first-time homebuyer programs in Kansas. This included a review of the Kansas Housing Resources Corporation website and other state resources. Here’s what you need to know about two Kansas programs that offer down payment and closing cost assistance to first-time homebuyers located in the state.

In this guide, we will cover:

Kansas first-time homebuyer programs

The Kansas Housing Resources Corporation, overseen by the Kansas Development Finance Authority, offers a variety of housing assistance programs designed to make owning or renting a home more affordable for every Kansan.

Through a grant program for first-time homebuyers, the Kansas Housing Resources Corporation helps state residents contribute a substantial down payment, lowering their debts and decreasing their monthly mortgage payments for years to come.

On top of that, two Kansas counties — Sedgwick and Shawnee — combined forces to provide additional aid to help buyers afford a larger down payment or cover closing costs. Here’s what you need to know about Kansas’s first-time homebuyer programs.

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First-Time Homebuyer Program

Features

  • 30-year, fixed mortgage through conventional loan programs as well as the FHA, VA and USDA Rural Development programs
  • Up to 20% of the sale price provided as a forgivable loan, with money intended to help cover down payment, closing costs and associated legal fees

Eligibility

To be eligible for the program, buyers must:

  • Be a first-time homebuyer or have not owned a home for three years, with a few exceptions. You’re still eligible if you’re a “displaced homemaker” currently unemployed or underemployed, a single parent who did not receive the shared house during divorce proceedings or the owner of a mobile home not installed on permanent foundations.
  • Contribute at least 2% — but no more than 10% — of their own money to the down payment.
  • Earn a gross annual income less than 80% of the area’s median income.
  • Maintain a total debt-to-income ratio of less than 41%.
  • Purchase a home in Kansas, but not in Kansas City, Lawrence, Topeka, Wichita or Johnson County.
  • Buy a home within purchase price limits, which vary by county, but are generally between $113,000 and $185,000.

Further, the property must pass a qualified inspection and meet the following criteria:

  • Home cannot have been a rental property for at least three months before purchase — unless the buyer was the renter.
  • Homes located in a flood zone may be excluded.
  • Property must be a single-family home, condominium, townhome, half-duplex, manufactured home, new construction or modular home located on less than five acres.

How it works

To get started, future homeowners must reach out to a participating lender. They’ll guide you through the approval and qualification process.

Once approved, buyers can receive up to 20% of the home’s purchase price toward the down payment and closing costs. Half is paid back in monthly installments over five years, if the total assistance is $15,000 or less, and 10 years if it’s above $15,000. The other half is paid back upon sale of the home, if this occurs within the first 10 years.

As long as buyers stay in the house for at least 10 years, the loan is forgiven entirely. Also beware: If you move out of the home before the 10 years are up, but do not sell the property, you will need to pay back the funds you received.

This program is not available to potential buyers who live in Kansas City, Lawrence, Topeka, Wichita or Johnson County — but all other Kansas residents are welcome to apply.

Kansas Housing Assistance Program

Features

  • 30-year, fixed-rate mortgage
  • Grants up to 5% of the purchase price to assist with down payment or closing costs
  • Additional cash subsidy of up to $2,500 for low-income buyers to offset other expenses

Eligibility

To qualify, borrowers must:

  • Maintain a credit score of at least 640 for VA, USDA-RD and conventional loans, and at least 660 for FHA loans
  • Earn income no more than 115% of the area’s annual median income for FHA, USDA-RD and VA loans, and no more than 140% of the annual median income for conventional loans
  • Buy a home with a purchase price of less than $484,350
  • Property is either a single-family detached home, duplex, condominium or townhome

How it works

The Kansas Housing Assistance Program, co-sponsored by Sedgwick and Shawnee counties, offers up to 5% of a new home’s purchase price in the form of a grant. This helps buyers increase their down payment or afford closing costs. Low-income buyers can receive an additional subsidy of up to $2,500 to offset or reduce expenses.

To begin the application process, reach out to a participating lender. They will work with the program to help set up your grant.

National first-time homebuyer programs

First-time homebuyers aren’t limited to the options available through the Kansas government. A number of national programs aid buyers, helping them increase their down payment, afford closing costs or reduce their tax liability. To learn more about the programs available nationally, visit LendingTree’s guide to first-time homebuyer programs.

 

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