UNOFFICIAL COPY 25 RS BR 198
Page 1 of 3
XXXX 2/18/2025 8:45 PM Jacketed
AN ACT relating to establishing a first-generation homebuyer trust fund and 1
program. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
SECTION 1. A NEW SECTION OF KRS CHAPTER 198A IS CREATED TO 4
READ AS FOLLOWS: 5
As used in Sections 1 to 3 of this Act: 6
(1) "First-generation homebuyer" means an individual: 7
(a) Who has not had sole ownership interest in residential real property; and 8
(b) Meets one (1) of the following conditions: 9
1. The individual's parents or legal guardians do not have any present or 10
previous ownership interest in any residential real property in any 11
state or territory of the United States or outside of the United States; 12
2. The individual was in foster care at any time; 13
3. The individual was an emancipated youth; or 14
4. The individual qualifies as a homeless youth or an unaccompanied 15
youth as those terms are defined in the McKinney-Vento Homeless 16
Assistance Act, 42 U.S.C. sec. 11434a; and 17
(2) "Principal residence" means an owner occupied single-family residence, duplex, 18
triplex, quadraplex, or unit in a multiunit residential structure in which the title 19
to each individual unit is transferred to the owner. 20
SECTION 2. A NEW SECTION OF KRS CHAPTER 198A IS CREATED TO 21
READ AS FOLLOWS: 22
(1) There is hereby established in the State Treasury a separate revolving account to 23
be known as the first-generation homebuyer trust fund. 24
(2) The fund shall consist of moneys received from state appropriations, gifts, grants, 25
federal funds, and all loan repayment, interest, or other return on the investment 26
of moneys in the fund. Separate accounts within the fund shall be established to 27 UNOFFICIAL COPY 25 RS BR 198
Page 2 of 3
XXXX 2/18/2025 8:45 PM Jacketed
designate origination of source for state appropriations, federal funds, and 1
moneys received from other sources. 2
(3) The fund shall be administered by the Kentucky Housing Corporation. 3
(4) Amounts deposited in the fund shall be used as provided in Sections 1 to 3 of this 4
Act. 5
(5) Notwithstanding KRS 45.229, any moneys remaining in the fund at the close of 6
fiscal year shall not lapse and shall be carried forward into the next fiscal year to 7
be used for the purposes set forth in Sections 1 to 3 of this Act. 8
SECTION 3. A NEW SECTION OF KRS CHAPTER 198A IS CREATED TO 9
READ AS FOLLOWS: 10
(1) The purpose of the first-generation homebuyer trust fund shall be to provide 11
financial assistance to eligible first-generation homebuyers in the 12
Commonwealth to gain an ownership interest in a principal residence. 13
(2) The Kentucky Housing Corporation shall: 14
(a) Use moneys from the first-generation homebuyer trust fund to make or 15
participate in the making of loans or grants; 16
(b) Operate a forgivable loan program to provide eligible first-generation 17
homebuyers financial assistance with the costs of acquiring an ownership 18
interest in single-family housing for principal residence. The loan program 19
shall: 20
1. a. Provide up to five thousand dollars ($5,000) as a forgivable loan. 21
b. Loan funds may be used for down payment, closing costs, 22
mortgage insurance, or interest rate buy-down. 23
c. The amount of down payment assistance shall be adjusted for 24
market conditions over time to accommodate the consumer price 25
index and inflation; 26
2. Be limited to applicants with a total household income equal to or less 27 UNOFFICIAL COPY 25 RS BR 198
Page 3 of 3
XXXX 2/18/2025 8:45 PM Jacketed
than one hundred twenty percent (120%) of the county median 1
income; 2
3. Require recipients to receive financial education and homebuyer 3
counseling available from the Kentucky Housing Corporation or the 4
Kentucky Financial Empowerment Commission under the direction of 5
the State Treasurer; and 6
4. Require recipients to occupy the purchased dwelling as their principal 7
residence for at least three (3) years; and 8
(c) Repayment of the loan shall be required if the property is sold within the 9
first three (3) years of ownership, converts to nonowner occupancy, or for 10
other reasons included in the loan document. 11
(3) Discrimination in the sale of, or otherwise making available or denying, a 12
dwelling funded under Sections 1 to 3 of this Act to any buyer because of race, 13
religion, sex, familial status, disability, or national origin is prohibited. 14
(4) The corporation shall submit a report to the Legislative Research Commission 15
beginning on October 1, 2026, on the disposition of the trust fund for the 16
previous fiscal year. The report shall also provide the impact of the down payment 17
assistance on the total housing costs of the program recipients, and any 18
information relevant to convey the costs and benefits of the loan program. 19