June is National Homeownership Month, and we’re pleased to join with Governor Laura Kelly in making the distinction official in Kansas. Homeownership strengthens families, stabilizes neighborhoods, builds communities, and fosters economic growth and prosperity.
KHRC’s First Time Homebuyer Program provides down payment and closing cost assistance for Kansans purchasing their first home. Homebuyers partner with our participating lenders to navigate the process. The program allows homebuyers to apply for a 0% interest loan for 15 or 20 % of the home’s purchase price. The loan is forgiven if the buyer remains in the home for 10 years.
To be eligible, applicants must be first time homebuyers or not have owned a home for three years and earn an income at or below 80% of their area’s median income. Homebuyers must make an investment of 2% but no more than 10% of the sale price from their own funds. The program operates in communities across the state, with the exception of Topeka, Lawrence, Wichita, Kansas City, and Johnson County.
We reached out to our longtime lending partners at First Bank Kansas to get their perspective on the process and the impact of the program.
“It truly is helping people start the dream of owning their home,” said Melinda Foster, a Salina Loan Officer.
KHRC provides training to get lenders up to speed on the program regulations and processes. “The lending process is very similar for all first-time purchasers,” Foster said. “Lots of things are happening at the same time, which allows us to still close within standard turnaround times.”
“There is a lot of information needed and forms signed by the borrower and seller, so the process has to be coordinated to get everything done in a timely manner,” said David Walters, Vice President and Branch Manager of First Bank Kansas in Abilene. “This program does have more requirements than most first time home purchases, but the borrower gets the benefit of generous 15-20% down payment in the form of a grant.”
First Bank officials stress that without assistance, many Kansans may not have the resources they need to purchase their first home. “Most first time buyers struggle to come up with enough cash for a minimum down payment, along with closing costs,” said Walters. “It helps put them in a better financial position, as their house payment is lower with this down payment assistance.”
Foster agrees. “Most homebuyers do not have large resources to put a lot of money down,” she said. “This grant helps them in so many ways.”
Beyond the homeowner benefits, Foster and Walters note that the program offers rewards for lenders as well. “It’s a tool for us to help qualify customers for a home loan,” Walters said of the program. “And also helps the customer buy that home in a financially smart way.”
Homebuyers hoping to take advantage of the program should do their research and start the process early.
“Talk to a home loan lender very early in the process,” said Walters. “They can provide borrowers with all the information needed to qualify them for a home loan, including minimum credit score, income requirements, minimum and maximum debt-to-income ratios, or down payment requirements. All this ‘up-front’ information will help them qualify the borrower for the program and let them know the loan amount and monthly house payment amount they’ll qualify for.”
“Every purchase is a success story,” Foster said. “It is so rewarding working with these homebuyers.”
Ready to purchase your first home? Contact a participating lender to start the process.
Interested in working with KHRC as a participating lender? Contact our team.
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 (HFA), administering essential housing and community programs to serve Kansans.