Kansas First-Time Home Buying Assistance Programs for 2024

Kansas First-Time Home Buying Guide

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    By Kim Franke-Folstad

    (Last Updated – 03/2024)

    Though their housing market is generally known for being more affordable than most, first-time homebuyers in Kansas have faced a slight rise in housing prices over the last year. Inventory is low. And in some markets the competition for available homes can be fierce.

    According to Redfin, the median selling price of a home in Kansas was $290,300 in January 2024, a 2.6% increase in 12 months. In some areas, such as Leavenworth, Shawnee, and Leawood, the price increases were greater than 20%.

    Fortunately, buyers who are struggling with the costs of purchasing their first home in Kansas may be able to get financial help through programs offered by the state and some cities. There also are longstanding federal programs that may improve a buyer’s chances of success.

    Recommended: First-Time Homebuyer Guide

    Who Is Considered a First-Time Homebuyer in Kansas?

    The definition of first-time homebuyer is broader than many think. For most programs offered in Kansas and elsewhere, applicants are considered first-time homebuyers if they haven’t owned a home for the past three years. If you’re looking for a home mortgage loan, as virtually all first-time buyers are, they’re worth a look.

    3 Kansas Programs for First-Time Homebuyers

    There are three statewide programs for first-time homebuyers in Kansas who might need help with obtaining an affordable loan and/or coming up with a down payment.

    The programs were established to assist low- to moderate-income buyers, which means participants must meet certain income limits as well as other financial requirements. There also may be purchase price limits.

    Statewide programs include:

    1. Kansas Housing Resources Corporation First-Time Homebuyer Program

    The Kansas Housing Resources Corporation First-Time Homebuyer Program offers income-eligible applicants a no-payment second mortgage to help cover their down payment and closing costs. The loan is completely forgiven after 10 years if the home remains the buyer’s primary residence. It’s available in 18 Kansas counties (but not in Topeka, Lawrence, Wichita, Kansas City, and Johnson County).

    Benefits and qualifications include:

    •   If borrowers remain in the home as their principal residence for 10 years, the loan is forgiven

    •   Assistance amount is income-based (20% of purchase price if household income is 50% or less of area median income; 15% of purchase price if household income is between 50% and 80% of area median income)

    •   Available to eligible first-time homebuyers, displaced homemakers, single parents who have full or joint custody, and some mobile home owners

    •   No minimum credit score, but must be approved for 30-year first mortgage (conventional, FHA, VA, or USDA)

    •   Buyers must contribute at least 1% (but no more than 10%) of home’s purchase price from their own funds

    •   Home cannot exceed purchase price limits ($143,000 in most counties)

    You can check out the program’s brochure or call 785-217-2025 with questions.

    A participating lender can help you get started.

    2. KansasDPA Program

    The KansasDPA Program offers qualifying first-time and repeat homebuyers a 30-year fixed-rate mortgage paired with a grant for their down payment or closing costs. Borrowers can choose from several different first mortgage types, including conventional, FHA, VA, and USDA loans.

    Benefits and qualifications include:

    •   2% to 5% grant based on first mortgage type

    •   Most home types qualify, including single-family detached home, duplex (one unit must be owner-occupied), condominiums, townhomes, and manufactured homes

    •   Available for new and existing homes

    •   Income generally cannot exceed $128,380, though the number is higher in select counties

    •   Minimum credit score of 640

    To find the name of a participating lender or see if your lender offers the KansasDPA, you can call 720.673.3948 or 720.673.3955.

    3. Homeownership Set-Aside Program

    FHLBank Topeka runs the Homeownership Set-Aside Program to assist very low-, low-, and moderate-income first-time homebuyers with their down payment, closing costs, and repair costs. The assistance comes in the form of a five-year forgivable grant. Buyers must repay the grant if they sell their home or refinance their first mortgage within five years.

    Benefits and Qualifications Include:

    •   Grant of $2,500 to $15,000

    •   Available to FHLBank mortgage customers only

    •   Household income cannot exceed 80% of area median income

    •   Reservations accepted on a first-come, first-served basis; subject to FHLBank member limits through Nov. 30, 2022

    More information: Go to Homeownership Set-aside Program (fhlbtopeka.com) or call 866-571-8155.

    To apply, contact an FHLBank member.

    Recommended: Understanding Mortgage Basics

    Other Kansas Homebuyer Programs by Location

    If you’ve already decided which Kansas community you’d like to make your home, you also may want to research local first-time homebuyer assistance programs.

    Even if you can’t find assistance in your chosen location, it may be helpful to check back occasionally for new offers. Some first-time homebuyer programs base their opportunities (and deadlines) on the funds they expect to become available. If their funding runs out, they may press pause. Local programs include:

    City of Leavenworth Home Ownership Program

    Leavenworth’s Home Ownership Program provides up to $8,000 in grant funding for first-time buyers purchasing a home in the city. The program is funded through a Community Development Block Grant administered through the U.S. Department of Housing and Urban Development (HUD) and is therefore subject to federal guidelines and rules. For information about the program, you can check out the web page .

    City of Topeka Opportunity to Own (TOTO) Program

    Topeka’s Department of Neighborhood Relations Housing Services Division administers the TOTO first-time homebuyer assistance program. The program, which was created to help low-income families purchase their first home in the city, provides homebuyer counseling and education as well as down payment assistance and money to help with home repairs.

    For information on qualifications and benefits, check out the program’s website . Or contact Housing and Credit Counseling Inc. at 785-234-0217.

    City of Wichita HOMEownership 80 Program

    Wichita’s HOMEownership 80 Program provides assistance to qualified low- to moderate-income first-time buyers purchasing newly constructed single-family homes developed by its community housing development organizations. The program offers a 0% interest, deferred-payment second loan for a down payment and closing costs. For more information on benefits and eligibility requirements, you can go to the program’s web page .

    How to Apply to Kansas Programs for First-Time Homebuyers

    Follow the links under each program for participating lenders or other contacts.

    Federal Programs for First-Time Homebuyers

    Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

    The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

    Federal Housing Administration (FHA) Loans

    The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

    In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 50% in some cases, vs. a typical 45% maximum for a conventional loan.

    Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.

    FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

    Freddie Mac Home Possible Mortgages

    Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

    The Home Possible mortgage is for buyers who have a credit score of at least 660.

    Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

    Fannie Mae HomeReady Mortgages

    Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

    For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .

    Fannie Mae Standard 97 LTV Loan

    The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

    Department of Veterans Affairs (VA) Loans

    Active-duty members of the military, veterans, and eligible family members may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

    Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

    Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.

    Native American Veteran Direct Loans (NADLs)

    Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.

    US Department of Agriculture (USDA) Loans

    No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

    The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site .

    HUD Good Neighbor Next Door Program

    This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

    First-Time Homebuyer Stats for 2024

    Ever wonder where you fit amid the mix of buyers who are out there shopping for their first home or first in a while? Here are some stats:

    •   Percentage of buyers nationwide who are first-time buyers: 32%

    •   Median age of first-time homebuyers: 35

    •   Median home price in Kansas: $290,300

    •   Median gross rent: $986 per month

    •   66.9% of Kansas housing units were owner-occupied

    •   Average credit score in Kansas: 723

    Additional Financing Tips for First-Time Homebuyers

    In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:

    •  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past three years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

    •  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

    •  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

    •  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

    •  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.

    •  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

    •  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

    The Takeaway

    Income-qualified first-time homebuyers in Kansas have a number of mortgage and down payment assistance options to aim for. Other first-time buyers in Kansas can shop for a fitting mortgage on their own.

    Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

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    Should I take first-time homebuyer classes?

    First-time homebuyer classes are required for many government-sponsored loan programs. And even if you aren’t seeking a government-sponsored loan, a class can demystify the homebuying process and smooth your path to finding a home and applying for a mortgage.

    Do first-time homebuyers with bad credit qualify for homeownership assistance?

    Yes, in many cases they do. Government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications.

    What credit score do I need for first-time homebuyer assistance in Kansas?

    There is no minimum credit score requirement for the Kansas Housing Resources Corporation First-Time Homebuyer Program. The minimum score for the KansasDPA Program is 640. Requirements may vary from one local program to the next, and some may use criteria other than credit scores to determine a borrower’s eligibility.

    Is there a first-time homebuyer tax credit in Kansas?

    No. The Kansas Housing Resources Corporation doesn’t offer a mortgage credit certificate program at this time.

    Is there a first-time veteran homebuyer assistance program in Kansas?

    The Kansas Housing Resources Corporation First-Time Homebuyer Program and Kansas DPA Program offer a VA loan to eligible borrowers.

    What is the average age of first-time homebuyers?

    The median age is 35, according to the National Association of Realtors®.

    Photo credit: iStock/TriggerPhoto

    *SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

    ¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

    †Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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