FRANKFORT, Ky. (April 11, 2008) – Kentucky Gov. Steve Beshear today signed House Bill 373, which doubles the debt ceiling of Kentucky Housing Corporation (KHC), the commonwealth’s housing finance agency. This increase from $2.5 billion to $5 billion will enable the agency to assist at least 25,000 additional households with safe, secure home mortgage loans.
Prior to this legislation, KHC nearly hit its debt ceiling, which would have severely limited the corporation’s ability to offer home loans to Kentucky households. KHC’s homeownership programs primarily serve first-time home buyers with at or below-market-rate home loans at a 30-year, fixed-interest rate. The increased ceiling will allow KHC to continue serving Kentuckians for the next five to 10 years.
“Purchasing a home is an American dream,” said Gov. Beshear. “This bill will continue to allow Kentucky families and individuals to purchase a home with a loan from KHC that they know they can trust.”
The increased debt limit is especially important in today’s housing market when Kentuckians need a reliable place to borrow money for a home mortgage. According to the National Mortgage Bankers Association’s National Delinquency Survey for the fourth quarter of 2007, the average foreclosure rate for all loans in Kentucky was 2.32 percent; KHC’s foreclosure rate was 1.12 percent. The considerably low rate is attributed to KHC’s sound lending and servicing practices and secure loans.
“The signing of this bill ensures that KHC will be able to continue to offer responsible home mortgages to the people of Kentucky,” said KHC Interim Chief Executive Officer Rick McQuady. “Kentucky Housing, with its partners, will continue to meet the state’s need for affordable homeownership.”
In addition to home mortgages, KHC offers down payment and closing cost assistance, homeownership education and financial counseling. Kentuckians who receive a loan from KHC work with one of 225 lending partner banks and mortgage companies located in communities throughout the state. Since its creation in 1972, over 82,000 Kentucky households have become homeowners by obtaining a KHC loan.
Representatives Mike Denham, D-Maysville; and Jim Wayne, D-Louisville sponsored HB 373. Both the House and Senate unanimously passed the bill.
Kentucky Housing Corporation, the state housing finance agency, was created by the 1972 General Assembly to provide affordable housing opportunities. As a self-supporting, public corporation, Kentucky Housing offers lower-than-market rate home mortgages, housing production financing, homeownership education/counseling, rental assistance, housing rehabilitation and supportive housing programs for special needs populations.