4 min read
Kentucky has two different kinds of down payment help, and they work nothing alike. Kentucky Housing Corporation’s Down Payment Assistance is a loan you repay. The Welcome Home Program, run by the Federal Home Loan Bank of Cincinnati, is a grant that does not have to be repaid if you stay in the home. Confusing the two, or assuming either one has no strings attached, is the fastest way to be surprised at closing or years later.
KHC’s Down Payment Assistance is a loan, not a grant
Kentucky Housing Corporation’s own program page is direct about this: KHC’s Down Payment Assistance (DPA) provides up to $12,500 toward your down payment and closing costs, in $100 increments, structured as a secondary loan repayable over a 15-year term.
That means the assistance shows up as a second loan behind your first mortgage. You make a payment on it, on top of your regular mortgage payment, for up to 15 years. It is not a discount and it is not forgiven for staying in the home. It has to be paired with a KHC first mortgage, and you have to meet KHC’s purchase price and income limits to qualify.
Interest rates and program details on KHC’s DPA can change, so confirm the current rate and terms with a KHC-approved lender rather than relying on a figure that may already be out of date by the time you read this.
The Welcome Home Program is a grant, with conditions
The Welcome Home Program is a separate program entirely, run by the Federal Home Loan Bank of Cincinnati rather than by the state. It offers grants between $10,000 and $20,000 toward down payment and closing costs for income-eligible homebuyers.
The word grant is accurate, but it comes with a real condition. Every home assisted with Welcome Home funds carries a five-year retention mechanism recorded in the deed. If you sell, refinance, or change ownership within five years of closing, the program can require you to repay all or part of the grant. Stay in the home past that five-year mark, and the grant is genuinely yours with no repayment.
The Welcome Home Program is not something Zen Door or any real estate brokerage runs. It has to be applied for through a participating FHLB Cincinnati member lender, and reservations open on a specific date each year and close once the year’s funds are reserved, which typically happens quickly. The Federal Home Loan Bank of Cincinnati’s own site confirmed the 2026 program window has already closed for the year.
What the two programs have in common
Both programs are administered through approved lenders, not directly by a state office or by Zen Door. Both are aimed at income-eligible buyers, and both have their own separate income limits that a lender will check against. Neither one is automatic. You have to ask for it, and you have to work with a lender who participates in the specific program.
Why this matters locally
A participating FHLB Cincinnati member lender does not have to be a national bank, and not every lender in the four counties offers every program. The Welcome Home Program’s 2026 window has already closed, with funds reserved on a first-come, first-served basis until they run out. If you want to be positioned when the 2027 window opens, reach out to Zen Door and we can help connect you with lenders in our network who participate in the Welcome Home Program, so you are ready to move quickly once funds become available again.
What to ask your lender
Before you assume either program will cover your down payment, ask your lender three things: which of these programs, if any, they actually offer, what the current income and purchase price limits are for your household size and county, and whether the assistance is a loan you will repay or a grant with a retention period attached. The answers change your monthly payment and your long-term math differently depending on which program applies.
Start the conversation before you shop
Both programs require a qualifying first mortgage from a participating lender, so the conversation about down payment assistance needs to happen before you are deep into house hunting, not after you have found the house. A KHC-approved lender or an FHLB Cincinnati member institution can tell you within one conversation whether either program fits your situation.
Thinking about buying in Central Kentucky?
We can help you figure out which program, if any, fits your situation
Reach out and we will connect you with Welcome Home Program lenders in our network before the 2027 window opens.
