Kansas offers a bit of everything: the urban energy of Kansas City, the college town vibe of Lawrence or the calm of somewhere on the open prairie. Compared with other parts of the U.S., the state offers relatively affordable housing, too. The average home sale price here was nearly $269,000 at the close of 2021, according to the Kansas Association of Realtors. If you’re a first-time homebuyer in the state, start with the Kansas Housing Resources Corporation (KHRC). The state’s primary housing agency offers down payment assistance that could help you affordably purchase and own a home.
Kansas down payment assistance
KHRC First-Time Homebuyer Program
KHRC offers a down payment assistance program for first-time homebuyers, appropriately called the First-Time Homebuyer Program. The program aims to address one of the biggest hurdles standing in the way 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; in most counties, the limit is $124,000, but there are some exceptions that range all the way to $198,000 in Pottawatomie County
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 helps first-time homebuyers secure between $20,000 and $30,000 to repair a home, under a few conditions:
- A minimum down payment of $500
- A maximum purchase price of $75,000
- 12 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, provided you can cover half the down payment cost. To keep the funds free and clear, all you’ll need to do is stay in the home for at least five years.
Other first-time homebuyer loan programs
In addition to exploring state and local homebuying assistance options, use Bankrate’s guide to first-time homebuyer loans and programs to see what you can qualify for on a national level.
If you’re serious about buying a home in Kansas, mortgage rates are on the rise, so you might want to start comparing options now to get a good sense of what banks, credit unions and other types of mortgage lenders in the state are charging. If you see a good rate, lock it in so you don’t miss out.
If the current seller’s market feels overwhelming and you decide to wait to buy a home, there is some help on the way this summer. Starting in July 2022, first-time homebuyers in Kansas can open a dedicated savings account to save for a home purchase with interest-free tax benefits.