Louisville Metro Down Payment Assistance Program

Take a $250,000 existing home in Louisville, under the $260,000 cap and close to the $260,000 median price in our Louisville data. A four-person household earning $75,000 is under the $79,200 income limit. If the lender's first mortgage covers $220,000, or 88% of the price, the $30,000 gap is 12% of the price. That fits under both the 20% ceiling and the $30,000 maximum, so Metro could fund the full $30,000 if underwriting supports it.

Estimated closing costs in Louisville run $5,000 to $8,000. The handbook encourages a 2% buyer contribution, or $5,000 here, which covers the low end, plus a $76 recording fee. Seller-paid closing costs can cover the rest, but no cash back is allowed. Because $30,000 triggers the 10-year term, $3,000 is forgiven each year from year six through ten, leaving $15,000 due at sale.

If the home sits in a historically redlined neighborhood, the buyer can also apply to REVERT, the Louisville Affordable Housing Trust Fund program offering up to $50,000 in forgivable repair funding. Metro's handbook allows REVERT development funds alongside Metro DPA. If REVERT is accepting applications, that could mean up to $80,000 in combined help, with $30,000 toward buying the home and up to $50,000 toward fixing it.

The clearest stacking option is REVERT, the Louisville Affordable Housing Trust Fund's redlining mitigation program, which offers up to $50,000 in forgivable funding to repair or rebuild homes in historically redlined neighborhoods (loutrustfund.org/revert, 502-637-5372). Metro's handbook explicitly allows REVERT development funds with Metro DPA and moves the Metro inspection earlier for those buyers. Streamlined 203(k) and VA renovation loans also work, with construction costs up to $35,000 and the Metro cap rising to $40,000.

REVERT's separate down payment assistance, capped at 20% of the price or $30,000, cannot be combined with Metro DPA or any other DPA processed through Metro. Kentucky Housing Corporation's $12,500 DPA requires a KHC first mortgage and must stay in second lien position, so Metro would have to accept third position; confirm with both before relying on it. Questions go to the DPA program at (502) 574-1974 or DPAHomebuyer@louisvilleky.gov.

The FY27 handbook dropped the old $500 minimum buyer contribution, so the 2% down payment is now encouraged rather than required. Seller-paid closing costs written into the contract can cover the $5,000 to $8,000 estimated closing costs. Buyers with no debt, $4,000 in the bank and a year in their job can stretch to a 32% front-end ratio.

The Louisville Metro program's biggest strength is size and cost. Up to $30,000 at 0% interest with no monthly payment is more than double KHC's $12,500, which is repaid at 4.75% over 15 years. Half of the Metro loan is forgiven after 5 or 10 years, and the other half is limited to net proceeds when you sell. It is open to repeat buyers who have not owned a home in the past 12 months, and up to $10,000 in medical collections will not disqualify you.

The biggest limitation is the $260,000 cap on existing homes, which matches Louisville's $260,000 median and sits below Jeffersontown's $285,000. Funding is first-come, first-served, the fall 2026 window can close on short notice, and an eligibility letter does not reserve money. The 45-day eligibility review, weekly board approval, Metro inspection and 30-business-day processing make it slower than a lender-run program. Buyers above 80% AMI or shopping above the cap should look at KHC's $12,500 DPA instead.