See programs you qualify for
Get Matched Free →By Tyler Thompson · Licensed Real Estate Agent · Updated April 11, 2026
Homebuyer Programs in Paducah, KY (2026)
Paducah is a western Kentucky city of about 27,000 residents located at the confluence of the Tennessee and Ohio Rivers in McCracken County. With a median home price around $185,000, Paducah offers affordable homeownership opportunities in a community recently named one of the best places to live in America. The Heart of Paducah Homebuyer Program through the Paducah Alliance of Neighbors provides forgivable mortgage assistance on newly constructed affordable homes for qualified first-time buyers. Buyers can also access Kentucky Housing Corporation programs offering up to $12,500 through the KHC Regular DAP and grants of $10,000 to $25,000 through the FHLB Cincinnati Welcome Home Program. Paducah-McCracken County Habitat for Humanity also builds affordable homes with zero-interest, 25-year mortgages for qualifying families. By combining local nonprofit and state programs, Paducah homebuyers can stack significant assistance toward homeownership.
State Programs in Kentucky
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| FHLB Cincinnati Welcome Home Program | Grant | Grants of $10,000 to $20,000; up to $25,000 for veterans, active-duty military, and surviving spouses | Yes | View → |
| KHC Affordable Down Payment Assistance (Affordable DAP) | Repayable Loan | Up to $7,500 | No | View → |
| KHC Regular Down Payment Assistance (DAP) | Repayable Loan | Up to $12,500 | No | View → |
- Type:
- Grant
- Amount:
- Grants of $10,000 to $20,000; up to $25,000 for veterans, active-duty military, and surviving spouses
- First-time only:
- Yes
- Type:
- Repayable Loan
- Amount:
- Up to $7,500
- First-time only:
- No
- Type:
- Repayable Loan
- Amount:
- Up to $12,500
- First-time only:
- No
Federal Programs
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| FHA Loans | Government-Insured Mortgage | Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026) | No | View → |
| Good Neighbor Next Door (HUD) | Government Property Sale Program | 50% discount off the list price of HUD-owned homes | Yes | View → |
| Home Possible Mortgage (Freddie Mac) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HomeReady Mortgage (Fannie Mae) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HUD $100 Down Program | FHA-Financed HUD REO Purchase | Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs. | No | View → |
| USDA Rural Development Loans | Government-Guaranteed Mortgage | 100% financing (no down payment required); loan amount up to appraised value | No | View → |
| VA Loans | Government-Guaranteed Mortgage | No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026) | No | View → |
- Type:
- Government-Insured Mortgage
- Amount:
- Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026)
- First-time only:
- No
- Type:
- Government Property Sale Program
- Amount:
- 50% discount off the list price of HUD-owned homes
- First-time only:
- Yes
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- FHA-Financed HUD REO Purchase
- Amount:
- Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs.
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- 100% financing (no down payment required); loan amount up to appraised value
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026)
- First-time only:
- No
Nonprofit Programs
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| Heart of Paducah Homebuyer Program | Forgivable Loan | Newly constructed homes at affordable prices with forgivable mortgage assistance | Yes | View → |
| Paducah-McCracken County Habitat for Humanity Homeownership Program | Zero-Interest Loan | Affordable home purchase with zero-interest, 25-year mortgage | No | View → |
- Type:
- Forgivable Loan
- Amount:
- Newly constructed homes at affordable prices with forgivable mortgage assistance
- First-time only:
- Yes
- Type:
- Zero-Interest Loan
- Amount:
- Affordable home purchase with zero-interest, 25-year mortgage
- First-time only:
- No
How to Apply
Step 1: Check your eligibility. For the Heart of Paducah Homebuyer Program, you need a household income at or below 80% of HUD Area Median Income for McCracken County, a credit score above 680, no more than $50,000 in assets, and a minimum household income around $33,000. For KHC programs, income limits vary by county and household size.
Step 2: Complete homebuyer education. Most programs require a HUD-approved homebuyer education course. ClearPoint Financial Solutions in Paducah at 877-877-1995 offers pre-purchase counseling. Kentucky Legal Aid in Paducah at 270-782-5740 also provides pre-purchase counseling services.
Step 3: Contact the Paducah Alliance of Neighbors. If you are interested in the Heart of Paducah Homebuyer Program, contact the Paducah Alliance of Neighbors to learn about current application windows and available homes in the Southside neighborhood revitalization area.
Step 4: Find a KHC-approved lender. Kentucky Housing Corporation works through participating lenders. Paducah Bank is a local KHC partner and also participates in the FHLB Cincinnati Welcome Home Program. Contact Rachel Worley at 270-575-5731 or Michele Luksic at 270-575-6647 at Paducah Bank for more information.
Step 5: Explore Habitat for Humanity. Contact Paducah-McCracken County Habitat for Humanity at 270-444-2060 or email info@paducahhabitat.org to learn about their homeownership program, which offers zero-interest, 25-year mortgages for qualifying families.
Step 6: Get pre-approved and find a home. Work with your KHC-approved lender to get pre-approved. The KHC Regular DAP offers up to $12,500 and the Affordable DAP offers up to $7,500 in down payment assistance.
Step 7: Submit your application and close. Your lender will guide you through the final application steps. Down payment assistance funds are applied at closing to reduce your out-of-pocket costs.
Frequently Asked Questions
How much down payment assistance can I get in Paducah?+−
Do I have to be a first-time homebuyer to qualify?+−
What is the Heart of Paducah Homebuyer Program?+−
Where can I get homebuyer education in Paducah?+−
How does Habitat for Humanity work in Paducah?+−
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