If you’re renting in Kansas, you’re likely enjoying a relatively low cost of living compared to the rest of the U.S. However, you might be surprised to learn that the state’s average home sale price jumped to over $240,000 at the beginning of 2021 — a more than 14 percent increase from 2020, according to the Kansas Association of Realtors.
There’s no need to feel overwhelmed by that price tag, though. The Kansas Housing Resources Corporation (KHRC), the state’s primary housing agency, offers down payment assistance that could help you affordably plant roots in the state.
Kansas down payment assistance
KHRC First-Time Homebuyer Program
KHRC offers a down payment assistance program for first-time homebuyers called the First-Time Homebuyer Program (this isn’t a contest for creativity, after all). The program aims to address one of the biggest challenges of becoming a homeowner: coming up with enough money to cover a down payment and closing costs.
KHRC’s assistance, a second loan with no monthly payments, can help you cover between 15 percent and 20 percent of the home’s purchase price. Your income determines what amount you qualify for:
- 20 percent – If your household income is 50 percent or less of the area median income where you’re buying, you can qualify for a loan for 20 percent of the purchase price.
- 15 percent – If your household income is between 50 percent and 80 percent of the area median income, you can qualify for a loan for 15 percent of the purchase price.
There’s plenty of incentive to stay in the home you buy, because if you live there for 10 years, the loan will be completely forgiven.
There are other requirements, too:
- No minimum credit score, but you’ll need to be approved for a 30-year conventional, FHA, VA or USDA loan for at least the first 80 percent of the home’s purchase price
- You must contribute at least 2 percent of your own funds to the purchase
- Your annual income can’t exceed 80 percent of the area median income where you’re buying
- The home you’re buying can’t exceed maximum purchase price amounts, which vary based on county
There’s a notable exception to this program: If you’re buying a home in Topeka, Wichita, Lawrence, Kansas City or Johnson County, you’ll need to look for other options. KHRC’s assistance is only available to buyers outside these areas.
Local homebuyer assistance programs
Depending on where you’re looking to buy, you might be able to find other assistance programs that can make your first home purchase more affordable.
As one of the biggest cities in Kansas, Topeka, for example, might be on your short list. If so, it’s worth considering the Topeka Opportunity to Own (TOTO) program, which grants first-time homebuyers up to $30,000 to repair a home, under a few conditions:
- A minimum down payment of $1,000
- A maximum purchase price of $75,000
- Eight hours of homebuyer and home maintenance education courses
- An income less than 80 percent of the area median income ($62,150 for a family of four)
Help is also available in Leavenworth, with the city making a big push to attract first-time homebuyers since more than half of its residential properties are rentals. If you meet income limits, you might be eligible for up to $8,000 in grant funding for your home purchase. To keep the funds free and clear, all you’ll need to do is stay in the home for at least five years.
Wichita’s HOMEownership 80 Program is another option that can help you secure a loan for your down payment and closing costs, with half of the loan able to be forgiven if you stay in the home for a certain period of time (five years for loans under $15,000, and 10 years for loans over $15,000). You’ll need to meet a few key requirements:
- Contribute at least $1,000 to the purchase
- Have an annual income under certain limits ($55,500 for a family of four)
- Complete a homebuyer education course
- Home must cost $95,500 or less
Other first-time homebuyer loan programs
In addition to exploring state and local homebuying assistance options, be sure to use Bankrate’s guide to first-time homebuyer loans and programs to see what you can qualify for on a national level.
For other Kansas homeownership programs, including by city, visit HUD.gov.
Before you apply for a loan to buy your first home, compare mortgage rates to get a good sense of what banks, credit unions and other types of mortgage lenders in Kansas are charging. While you’re looking at lenders, take a look at your credit and financial situation, too: Check your credit score so you have an idea of how you’ll appear as a borrower, and take steps to improve it if needed.