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Understanding First-Time Home Buyer Programs in Kansas

There are several programs for first-time home buyers to take advantage of in Kansas. If you don’t want to leave money on the table, it always pays to do your research and understand the different available programs. We’ll cover some of the most popular options in this short guide.

Homeowner Set-Aside Program

The Homeowner Set-Aside Program is offered through the Affordable Housing Program and offers up to $5,000 in matching funds for the down payment and closing costs of your first home.

Applicants must be first-time home buyers, provide a $500 down payment, complete a home buyer education course, stay in the home for at least 5 years, and have an annual household income at or below $53,040 for 1–2 persons or $60,996 for households with 3 or more.

The Homeowner Set-Aside Program is not for everyone. Homes may be located in either rural or urban areas of Kansas, but limited grant funds are available, and non-occupying co-borrower and/or co-owners are not permitted.

In addition, the loan will not close until confirmation of income approval has been received, no cashback may be received at closing, and no debt may be paid off at closing.

For those who can qualify, the Homeowner Set-Aside Program is an excellent vehicle to assist buyers with their journey to homeownership.

HOMEownership 80 Program

The City of Wichita's HOMEownership 80 Program provides first-time home buyers with funds that can help cover the down payment and closing costs on their first home. This local program is funded by a federal grant from the US Department of Housing and Urban Development (HUD).

Similar to other down payment assistance programs, applicants must be able to meet all qualifications and be under a purchase contract to receive funds. There are certain areas that your home's address must fall under to be eligible for this program, and buyers must be willing to complete an educational homeownership training session.

Note that income verification is required before the loan closing, and a prequalification appointment with a local lender is always a good idea.

FHA & VA Loans

FHA loans are open to all first-time and repeat home buyers, while VA loans are exclusively for veterans and active-duty military (and, in some cases, surviving spouses). Both of these loans are government-backed and were created to provide access to homeownership for families who otherwise might not qualify for a conventional loan.

The FHA loan program works by allowing applicants to offset their risk to the lender by paying an additional monthly or annual cost known as mortgage insurance. For this reason, FHA loan requirements are not as stringent as those associated with other types of home loans. FHA loans allow buyers to complete their home purchase with a down payment of just 3.5%.

However, while the minimum credit score required for an FHA loan is quite generous, a lower credit score may trigger the need to put more than 3.5% down. On the other hand, VA loans don't require any down payment at all, typically have a lower interest rate, and also do not utilize mortgage insurance.

Although FHA loans and VA loans are not limited to just first-time home buyers, they are a great option for those looking to purchase their first home with little to no cash to put down.

Rural Development Loans

Rural Development Loans are a common financing option in Kansas. As the name suggests, this program is designed for home purchases in designated rural areas. It offers first-time buyers access to financing with a low-interest rate and no down payment.

The loan does not require a very high credit score, making qualification very accessible to most home buyers. Prospective homeowners will need to be sure to look for properties that fall within the eligible USDA rural areas.

KHRC First-Time Home Buyer Program

Another popular option is the Kansas Housing Resources Corporation (KHRC) First-Time Homebuyer Program. This program allows qualified applicants to benefit from a 0% interest loan that will cover their entire down payment — all the way up to 20% of their home’s purchase price! Best of all, this loan is forgiven for homeowners who stay in their homes for more than 10 years.

Applicants must not have owned a home within the last 3 years, reside in one of the 18 counties where the program is available, and have an annual income at or below 80% of their area's median income. (The program is unavailable in Topeka, Lawrence, Wichita, Kansas City, or Johnson County.)

Kansas Housing Assistance Program

Last but not least, the Kansas Housing Assistance Program allows home buyers to receive a low-interest, 30-year fixed-rate mortgage with a down payment assistance grant. In this case, the program will cover up to 5% of the home’s purchase price. Applicants must also have a minimum credit score of at least 640 and fall within income and purchase price limits.

First-Time Home Buyers: Apply With Credit Union of America

At Credit Union of America, we offer a variety of home loans, including Rural Development (RD) loans, FHA and VA loans, the Homeownership Set-Aside Program, and conventional loans with 3% down.

Getting a home loan with CUA is convenient and easy. Our local underwriters offer flexible programs to meet your needs.

Click below to learn more!


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