The City of Paducah has applied for funds and administered a Homebuyer Program in the city since 1996. The program serves potential homebuyers who have incomes under 80% of the area median income. The homebuyer must be creditworthy and able to get a bank mortgage to supplement the funds from Kentucky Housing Corporation and HUD's HOME program.
The funds are distributed according to income and financial need in the form of a partially paid and partially forgiven second mortgage, so the potential buyer must obtain a bank mortgage for the remainder. Once pre-approved by a local lender, the applicant will meet with the Grants Administrator to discuss possible lots available and to assess the housing needs of the household. The Grants Administrator arranges special interest rates, long term fixed financing, reduced closing costs, escrow accounts for taxes and insurance, maximum loan to value ratio, and other perks for the buyers through local lenders. A city lot is donated for the construction. The Grants Administrator and the Construction Manager will work with the homebuyer to select an affordable and adequate-sized home, approve all the plans, provide weekly inspection of the construction process and act as liaison between the contractor and homebuyer. All homes will be built to local, state and funding source's building codes. A down payment is required. The amount will vary according to affordability. Homebuyer training is required and provided to each recipient.
Currently all housing funds are being targeted in the Fountain Avenue project area.