Kansas First-Time Homebuyer Programs
Kansas provides substantial assistance to first-time homebuyers to help them with down payments and closing costs. These programs allow low- and middle-income families to become homeowners in the Sunflower state. Learn more about the first-time homebuyer programs and how you can qualify for one.
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First-time homebuyer programs in Kansas
First-time homebuyers can find down payment assistance (DPA) programs through the Kansas Housing Resources Corporation (KHRC) and several other municipal, statewide or private organizations. Qualified first-time homeowners and, in some cases, repeat buyers, may qualify for assistance but there are strict income requirements and some assistance loans are time-restricted — meaning that you must live in your home for a specific number of years before the loan is forgiven.
Kansas Housing First-Time Homebuyer Program
Individuals living at or below 80% of their area’s median income (AMI) may be eligible for a 0% interest loan of 15% or 20% of the home’s total purchase price. Applicants must be first-time buyers or not have owned a property for three years. Potential homebuyers need to make a down payment of 2% to 10%. However, if you use this program, you must remain in the home for 10 years before selling or refinancing, or you’ll be expected to repay the loan’s balance. This program is open to Kansas residents in 18 counties, excluding Johnson County, Kansas City, Lawrence, Topeka and Wichita.
Requirements
- You must earn 80% at or below the median income in your county
- You will need to be approved for a mortgage with a participating KHRC lender
- There is no credit score necessary, but you will have to qualify for a mortgage
- You must purchase an existing home
- Home may not be in Johnson County, Kansas City, Lawrence, Topeka and Wichita
Pros and cons
| Pros | Cons |
|---|---|
Zero-interest loan Forgiven, if you stay in the home for ten years No minimum credit score | Not available statewide Must make at least a 2% down payment Must purchase an existing home |
KansasDPA
KansasDPA is a statewide down payment assistance program. Prospective first-time or repeat homebuyers may qualify for a 30-year fixed-rate mortgage along with this payment assistance grant, which covers up to a percentage of the purchase price to help pay closing or down payment costs. You must meet various qualifying criteria, including a credit score of at least 640, and like most statewide assistance programs, you will need to use an approved lender.
Note: Actual availability of the KansasDPA program may vary based on market conditions.
Requirements
- Minimum credit score of 640
- Maximum income of 140% of AMI; amounts vary by county
- You’ll need mortgage preapproval with a KansasDPA-approved lender
Pros and cons
| Pros | Cons |
|---|---|
Grant does not need to be repaid New and existing homes approved for purchase Can use a conventional or government mortgage | Must meet credit score threshold Subject to income limits by county |
FHLBank Topeka Homeownership Set-Aside Program
The Homeownership Set-aside Program (HSP) from FHLBank Topeka provides funds to help qualified homebuyers cover down payments, closing costs and repair assistance. Household income must be 80% or less of the AMI, and you must live in Colorado, Kansas, Nebraska or Oklahoma to qualify for the program. The funds are in the form of a forgivable loan with a five-year retention rate which means that you must live in your home for at least five years for the loan to be forgiven. Amounts from $2,500 to $7,500 are available to qualified applicants, but you must apply through FHLBank Topeka partners.
Requirements
- You must live in Colorado, Kansas, Nebraska or Oklahoma to qualify for this program
- You must live in the purchased home for five years
- You must apply for this annual program before it closes at the end of November
- Your income cannot exceed the threshold
- You must complete a homebuyer education course
Pros and cons
| Pros | Cons |
|---|---|
Forgivable grant up to $7,500 Can access a variety of mortgage products Designed to help low-to-moderate income buyers | Must live in one of the four approved states Must work with an FHLBank Topeka member for loan Must remain in the home for five years or will have to pay back grant money |
CDBG Homeownership Application
The city of Leavenworth, Kan. provides grants up to $8,000 to help low- and moderate-income first-time homebuyers. To qualify, you’ll need to have a qualifying income (per HUD guidelines), not have owned a home for five years and provide one-half of the down payment required by the mortgage program.
Requirements
- You must meet the income guidelines adopted by HUD for low-to-moderate income
- You must live or plan to buy in Leavenworth, Kan.
- You must be preapproved for the purchase of a home by a bank or mortgage company with a fixed-rate loan
- The home must be valued at $168,000 or less
- You cannot have owned a home in over five years
Pros and cons
| Pros | Cons |
|---|---|
Up to $8,000 in assistance available Grant funds do not have to be paid back Preference given to Leavenworth, Kan. residents | Maximum home purchase valued up to $168,000 Cannot have owned a home in five years Must meet HUD-adopted income guidelines Must be preapproved for a mortgage from an approved lender |
Kansas first-time homebuyer qualifications
Requirements for Kansas first-time homebuyer programs vary by program, but common requirements include a credit score of 640, income relative to the AMI, maximum home purchase prices and residing in specific counties or regions.
→ 1. Get preapproved for a mortgage from a preapproved lender. Most homebuyer assistance programs in Kansas require you to obtain a mortgage from a list of approved lenders. For example, the KHRC maintains a list of participating lenders. Each lender may have their own credit and application requirements, as well as a unique qualification and approval process.
→ 2. Locate a home in an approved area. Some programs are reserved for specific counties in Kansas, only. For example, you cannot participate in the Kansas Housing First-Time Homebuyer Program if you live in Kansas City, Lawrence, Topeka, Wichita or Johnson County homes.
→ 3. Take a homeownership education course. Some programs require a homebuying education as a prerequisite for approval. For example, to take advantage of Leavenworth’s grant assistance, you must provide lenders with a certificate showing you passed a homebuying education course with a score of 70%.
→ 4. Meet income and property requirements. Since many down payment assistance programs are intended to serve low- to moderate-income families in Kansas, you may need to demonstrate that your income meets specific standards relative to the area median income (AMI). Most programs come with income limits — like earning 80% or below of the AMI.
→ 5. Meet payback requirements before selling or refinancing your new home. Many first-time homeowner programs in Kansas are forgivable loans with retention rates of five or 10 years. If you take out a forgivable mortgage, you must live in the home for a specific number of years. If you sell or refinance before the term is up, you risk having to pay back the loan balance.
→ 6. Be a first-time homebuyer or have not owned a home in the last five years. Kansas homebuyer assistance programs do not allow repeat buyers to participate if they have owned a home within five years of applying for assistance.
Understanding Kansas first-time homebuyer down payment assistance
Most homebuyer assistance is offered through forgivable loans or cash grants. However, a deferred payment loan is another form of help for cash-strapped homebuyers who qualify.
Deferred second mortgage
A deferred second mortgage is a second lien on your home, usually in the form of a 0% interest loan that you pay off when you sell or refinance your home. The funds you receive would be put towards a down payment or closing costs.
Forgivable second mortgage
Most homebuying assistance programs in Kansas are a “forgivable second mortgage” for qualified applicants. Like a deferred second mortgage, a forgivable second mortgage is also a second lien on your house, but if you stay in the home without refinancing (or selling) for a specified number of years, then the loan is forgiven. These types of loans typically have 0% interest and no payments due. Funds can be used to pay a down payment or closing costs on your first home.
Grant
A housing grant is usually used to cover closing costs or provide funds for a down payment. Unlike a forgivable mortgage, it is not a second lien. Grants typically do not need to be repaid.
Mortgage credit certificate
The Kansas Housing Resources Corporation does not offer a mortgage tax credit certificate program.
Most of the homebuyer assistance programs in Kansas follow the eligibility rules based on HUD’s median income limits or require your income to be at or below 80% of the county’s median income. In addition, some programs are area-specific or available to limited counties. Remember, if your loan terms are linked with a retention period, don’t plan on leaving or refinancing your home until it ends.
How much of a down payment do I need to buy a house in Kansas?
If you qualify for the state’s first-time homebuyer program, you will only need to pay 2% of the asking price, and some loans, like VA and USDA loans, do not even require down payment funds. If you qualify for an FHA loan, the minimum down payment is 3.5%, while some lenders for conventional loans may only ask homebuyers for a 3% payment.
Can I qualify for down payment assistance in Kansas?
To qualify for assistance programs in Kansas, you usually must meet the following criteria:
→ Be a first-time homebuyer or have not owned a home in the last three to five years, depending on the program
→ Remain in the home for five to 10 years, depending on the program
→ Fall below the income limits as outlined in the program
→ Take a homebuyer education course, depending on the program
→ Qualify for a loan with a participating lender
→ Buy in an approved area or county, depending on the program
How do I apply for Kansas first-time homebuyer down payment assistance?
You can access down payment assistance programs through a nonprofit or another organization offering them. You can also contact preapproved lenders who may help guide you through the loan process.
Other first-time homebuyer loan programs
Conventional loans
Conventional mortgages often have strict requirements and higher loan limits than government programs. If you want to go the route of a conventional loan, try the Fannie Mae HomeReady® and Freddie Mac Home Possible® programs. You only need 3% for a down payment and offer lower mortgage insurance premiums than FHA loans.
FHA loans
These loans are a good choice for first-time buyers because FHA loans only call for a credit score of 580 or higher and you only need to put down 3.5% for a down payment. Be aware that some Kansas programs call for a credit score of at least 640, so you may not be eligible for an FHA if you want to use a state-sponsored program.
VA loans
The U.S. Department of Veterans Affairs (VA) guarantees VA loans to active service members and veterans. These mortgages require no down payment, have no limit on the amount you can borrow, and do not require mortgage insurance. Any funds you receive from homebuyer assistance programs could be used for closing costs or other related fees
USDA loans
These loans from the U.S. Department of Agriculture (USDA) aim to help low- and middle-income families become homeowners. The loans don’t require a down payment, but USDA loans have their own income limits to qualify, plus the home you purchase must be in a rural location.
What are the best first-time homebuyer loans?
The best first-time homebuyer loans depend on your financial situation. If you plan on using any homebuyer assistance programs in Kansas, your first step is qualifying for a mortgage. Below are some of the best loan options for first-time homebuyers.
| First-time homebuyer loan | Recommended for |
|---|---|
| Conventional mortgage loan | Buyers with good credit and at least 3% of the asking price in cash |
| FHA mortgage loan | Buyers with credit 580 or above, who may not qualify for down payment assistance grants |
| VA mortgage loan | If you are in the military or retired and don’t have money for a down payment |
| USDA | Low-to-moderate income buyers who want to purchase a home in a rural area |
Home price trends in Kansas’s major areas
Monthly mortgage payments increased significantly year over year in many Kansas counties. For homebuyers in Shawnee County, home to the capital city of Topeka, the median home value is $178,610 in the third quarter of 2022. This translates to a mortgage payment of $925 per month, higher by $348 year over year. In Douglas County, which includes the popular college town of Lawrence, the median home value is $269,286 in the third quarter of 2022, translating to a mortgage payment of $1,394, up $495 from 2021.
Is there a first-time homebuyer tax credit in Kansas?
No. There is not a first-time homebuyer tax credit in Kansas.
What are the current mortgage rate trends in Kansas?
As of December 28, 2023, the national average mortgage rate for a 30-year fixed loan is 6.61%, according to Freddie Mac. You can view rates specific to your city in Kansas at the LendingTree mortgage rates page.
