Louisville Metro Down Payment Assistance Program

Temporarily closed to new applications

Louisville Metro Government – Office of Housing & Community DevelopmentKYFirst-Time Homeowner

Funding: Zero percent interest second mortgage covering up to 20 percent of the home purchase price, capped at 40000 dollars, to be used for down payment and closing costs; a portion is typically forgiven after 15 years of continuous occupancy and the remainder is due upon sale or transfer, subject to equity.0% interest partially forgivable second mortgage loanRolling (paused)Deadline: Scope: Localstate

Updated: Dec 5, 2025

Summary

Louisville’s Down Payment Assistance Program is one of Kentucky’s most generous local homebuyer initiatives, offering an interest-free second mortgage of up to 20% of the purchase price (maximum $40,000) to help income-qualified buyers cover down payment and closing costs on primary residences in the Louisville Metro area.

Benefits

down payment assistanceclosing cost assistanceforgivable loan

Who Can Apply

individualfirst-time homebuyerlow- to moderate-income homebuyer

Eligible Locations

Existing or newly constructed owner-occupied homes in the Louisville Metro area, Kentucky, purchased by income-eligible households.

Eligibility

Low- to moderate-income buyers purchasing an existing or newly constructed primary residence in the Louisville Metro area, with household income at or below 80% of area median income, minimum savings of about $2,000, no unpaid collections or undischarged bankruptcies, and liquid assets below roughly $15,000; applicants must be pre-approved for a qualifying first mortgage, complete HUD-certified homebuyer education, meet purchase-price limits (generally in the $260,000–$340,000 range for single-family homes and $300,000–$400,000 for duplexes), and must not have owned a home within the previous 12 months.

Full Description

Administered by Louisville Metro’s Office of Housing & Community Development, the Down Payment Assistance Program is designed to close the affordability gap for working households that can afford a mortgage payment but lack enough cash for a down payment and closing costs. Qualified buyers earning no more than 80% of local area median income can receive a 0% interest second mortgage sized at up to 20% of the home’s purchase price, capped at $40,000, which can be layered with a primary FHA, VA, USDA, or conventional loan. The assistance is structured to be homeowner-friendly: borrowers make no monthly payments on the DPA loan, half the balance is typically forgiven after 15 years of continuous owner-occupancy, and the remainder is repaid only when the home is sold or transferred, subject to available equity. To qualify, households must purchase an existing or newly constructed home in the Louisville Metro area, complete HUD-approved counseling, show at least about $2,000 in savings, avoid unpaid collections or recent bankruptcies, and meet purchase-price caps that vary by property type. While recent notices indicate that new applications are temporarily paused as funds are reallocated, the program remains a key reference point for Louisville down payment assistance and may reopen as future funding cycles are approved.

Verification & Details

Status: Temporarily closed to new applications

Source: louisvilleky.gov

Official source → louisvilleky.gov

Apply on official siteUpdated Dec 5, 2025

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