Lexington Proposes Loan Program for First-Time Buyers
Eligible local residents may soon receive second mortgages to cover 25% of home purchase costs.
Updated on Oct. 28, 2026 in Residential
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Lexington Mayor Linda Gorton has proposed a new $1 million shared appreciation loan program to support first-time homebuyers in Fayette County. The initiative provides second mortgages to help lower-income households reduce monthly costs and achieve homeownership.
Why it matters
This program addresses rising housing costs by lowering the financial barrier for first-time buyers with household incomes at or below 80% of the median. By utilizing a shared appreciation model, the city aims to help families secure homes that would otherwise be unaffordable.
The program offers a second mortgage covering up to 25% of the home purchase price. To qualify, participants must complete a homeownership counseling program and reside in Fayette County, with funding currently limited to an estimated 15 to 20 recipients.
The players
Linda Gorton
The Mayor of Lexington who introduced the proposal to assist local first-time homebuyers.
Lexington-Fayette Urban County Council
The local government body that allocated $1 million in funding for the homeownership initiative.
Kentucky Housing Corporation
A state agency partnering with the city to administer the new loan program and provide oversight.
The details
The program functions by providing a zero-interest, zero-monthly-payment second mortgage to eligible buyers. Upon the future sale, refinancing, or foreclosure of the property, the homeowner repays the original principal along with a portion of the home's appreciation. The city manages this initiative in partnership with the Kentucky Housing Corporation to ensure lower-income households can manage their monthly mortgage obligations.
Timeline
October 27, 2026: Lexington Mayor Linda Gorton proposed the shared appreciation loan program.
The Home Front
Lexington joins a growing number of municipalities implementing shared appreciation models to stabilize housing costs for residents. This program marks a significant expansion of local efforts to address home affordability in the current market.
Potential buyers should research the Kentucky Housing Corporation's guidelines to see if their income level meets the 80% median threshold. If you are considering this program, prepare by identifying local homeownership counseling courses required for future participation.
The takeaway
This program offers a path to homeownership for eligible residents by deferring loan repayment until the home is sold or refinanced. Keep your household financial documents and proof of income organized to be ready if you decide to apply once the application window opens.
Further reading
For additional context on buying property in the area, visit the Lexington Residential section.
Source note: This article includes information reported by Wkyt.
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Do you support your local government using shared appreciation loans to help first-time homebuyers?
