Kansas Housing Resources Corporation (KHRC) runs one of the more generous down payment assistance programs in the Midwest. The agency's First-Time Homebuyer Program provides eligible Kansans with a zero-interest loan equal to 15 or 20 percent of the home's purchase price, with the loan fully forgiven if the buyer stays in the home for 10 years. For first-time buyers struggling to save for a down payment, the program can make ownership possible years sooner than saving alone.

How the Program Works

The KHRC First-Time Homebuyer Program offers a second-lien loan layered on top of a conventional, FHA, VA, or USDA first mortgage. Key terms:

Zero percent interest. The loan accrues no interest while outstanding.
15 or 20 percent of purchase price. The exact percentage depends on income tier and other program settings.
Ten-year forgiveness. If the borrower occupies the home for 10 years, the loan is forgiven in full.
Repayment triggered by sale, refinance, or move. If the home is sold or refinanced or the borrower stops occupying the home before the 10-year mark, the outstanding balance becomes due, often on a prorated basis depending on how long the borrower has lived in the home.

The forgivable structure is a meaningful edge. Forgivable assistance functions more like a grant than a loan for buyers who stay put, and it keeps wealth inside the household rather than being paid back to the state.

Who Qualifies

KHRC's program rules focus on low- and moderate-income first-time buyers in most of the state. Core eligibility requirements include:

Income cap. Applicants must earn at or below 80 percent of the Area Median Income for the county.
First-time buyer status. Buyers cannot have owned a home in the previous three years, with exceptions for displaced homemakers, single parents, and owners of manufactured homes on leased land.
Own contribution. Buyers must bring 1 to 10 percent of their own funds to the purchase.
Homebuyer education. Completion of an approved homebuyer education course is required.
Primary residence. The home must be the buyer's primary residence.

Service Area

The program uses federal HOME Investment Partnership funds, which come with specific geographic rules. KHRC administers the program in most Kansas counties except for the city limits of Topeka, Lawrence, Wichita, Kansas City (Kansas), and Johnson County. Those jurisdictions receive their own direct HOME allocations and run parallel programs designed to fit local housing markets.

Buyers in excluded areas should look to those local programs:

Topeka. Operates its own home buyer programs funded in part by HUD
Lawrence. Runs HOME-funded homebuyer support through the city
Wichita. Offers homebuyer assistance through the city's housing division
Kansas City, Kansas. The Unified Government administers HOME assistance
Johnson County. County-level homebuyer programs exist for qualifying residents

How to Apply

Applicants do not apply directly to KHRC. Instead, they work through a participating lender that KHRC has approved to deliver the program. The flow typically looks like this:

Connect with a participating lender. KHRC maintains a list of lenders trained on the program. The lender reviews the buyer's finances, runs credit, and prequalifies for a first mortgage.
Complete homebuyer education. Approved courses cover budgeting, credit, mortgages, closing, and home maintenance.
Find an eligible home. The home must meet program price limits and pass standard lender inspections.
Submit the assistance application. The lender submits the paperwork for KHRC review.
Close the loan. KHRC funds the second lien at closing. The buyer brings their 1 to 10 percent contribution and closing costs.

What the Money Covers

KHRC's assistance funds can be used for the down payment and closing costs associated with the home purchase. Buyers do not receive a check directly. Instead, the lender uses the funds as part of the closing, and the lien appears on the title alongside the first mortgage.

Home Loan Guarantee for Rural Kansas

Alongside the main First-Time Homebuyer Program, KHRC administers a Home Loan Guarantee (HLG) for Rural Kansas. This program helps rural Kansans cover the gap between loan amounts and appraised values when building or renovating in qualifying counties. For households in smaller communities where appraisers rarely see recent comparable sales, the guarantee helps lenders approve loans that might otherwise fall short.

How the 15 to 20 Percent Compares

Most state down payment assistance programs offer 3 to 5 percent of purchase price. Forgivable assistance of 15 to 20 percent is unusually generous. On a $180,000 home, 20 percent is $36,000, enough to cover a conventional loan's full down payment and eliminate private mortgage insurance on the first mortgage. That is a meaningful change in monthly payment and long-term wealth accumulation.

Combining With Other Help

Kansas buyers can sometimes combine KHRC's program with other assistance, such as:

Mortgage Credit Certificates. Federal tax credit that reduces annual federal tax liability based on mortgage interest paid
Federal Home Loan Bank grants. Matching funds for qualified homebuyers through participating member banks
Employer-assisted housing. Some Kansas employers offer matching down payment help to employees
Community land trust programs. Specific to certain neighborhoods

Each combination requires careful review. Lenders familiar with KHRC's program can help sort out what layering is allowed.

What Buyers Should Plan For

Buyers using the program should plan for several realities:

Timeline. Adding a second lien and running through KHRC review can add time to closing. Build that into the contract.
Stay-in-home commitment. Forgiveness requires 10 years of occupancy. Buyers who expect a job relocation or lifestyle change should think carefully about whether this program fits.
Refinance considerations. Refinancing the first mortgage may trigger repayment, even if the buyer is still in the home. Read the fine print before signing.
Documentation. Expect to produce income, asset, and credit documentation typical of a mortgage application.

Why It Works

The KHRC program works because it addresses the hardest barrier to ownership for many Kansans: cash at closing. A household with steady income and decent credit can often carry a mortgage payment. What they lack is the five-figure check needed to meet down payment and closing cost requirements. The First-Time Homebuyer Program provides that check as a forgivable loan, turning a years-long saving slog into a single closing meeting.

For eligible Kansans outside the state's largest cities, this program is one of the strongest paths into ownership available anywhere in the country.

Kansas First-Time Homebuyer Program: Forgivable Down Payment Help