Work with KHC to Create a Local SAM Program
Kentucky Housing Corporation (KHC) is actively working with municipalities, foundations, and nonprofits interested in contributing to the Shared Appreciation Mortgage (SAM) program to create their own restricted pool of funds.
The "Plug and Play" Advantage
Choosing KHC's SAM program provides a turnkey solution for those who wish to set up a housing fund in their community. You provide your contribution and set your program parameters. Homebuyers work with a KHC-approved SAM lender from our statewide lender network. Once closed, KHC services the mortgage.
- No Exhaustive Setup: Skip the extensive legal structuring and program research.
- No Fund Management: We administer the restricted pool on your behalf.
- Turnkey Deployment: Instantly leverage KHC’s existing, statewide lender network to deploy your funds.
- Zero Backend Administration: KHC handles all ongoing loan and mortgage servicing.
Note: Funder contributions to the SAM program are not tax-deductible.
Customize Your Restricted Pool
Participating entities may select from a list of customizations for their restricted pool:
Program Details
The SAM program provides a powerful tool to close the affordability gap for your targeted homebuyers. The program features:
- Generous Assistance: Available funding of up to 25% of the purchase price as a subordinate mortgage typically structured as 20% for the down payment to eliminate mortgage insurance, and 5% for closing costs.
- Zero Monthly Burden: SAM second mortgages are structured as 0% interest with no monthly payment.
- Deferred Repayment: At the time of repayment, the borrower will owe the initial principal amount plus a proportional share of the future appreciation of the property. No payment is due until the property is sold, refinanced, the first mortgage is paid in full, or other repayment triggering event.*
- Homebuyer Education: Borrowers must complete required SAM homebuyer education and recieve an annual disclosure as a reminder of the repayment requirements.
- Development Incentive: Provides a tool to incentivize new homeownership development.
- Wide Range of Property Types: Eligible properties can include newly constructed single-family residences (including those with an accessory dwelling unit), owner-occupied duplexes, and manufactured homes placed on a permanent foundation and converted to real property.
How Far Does Your Contribution Go?
The impact of your restricted pool depends on the number of homebuyers you wish to assist.
$200,000 Purchase Price
Assuming an average purchase price of $200,000:
- Borrowers save $308-518 per month.
- A SAM mortgage covering 25% of the purchase price equals $50,000 per homebuyer.
- A $1,000,000 contribution will assist 20 homebuyers in your target demographic.
| Terms | Conventional HFA First + SAM Second ¹ | Conventional HFA First + DPA Second ² | FHA MRB First + DPA Second ³ |
|---|---|---|---|
| Interest Rate | 6.625% | 6.625% | 5.75% |
| Base Loan Amount | $160,000 | $194,000 | $193,000 |
| MI Upfront Premium | N/A | N/A | $3,377 |
| Total Loan Amount | $160,000 | $194,000 | $196,377 |
| Monthly Principal/Interest | $1,024.50 | $1,242.20 | $1,146 |
| Monthly MI | N/A | $202.41 | $88.46 |
| First Mortgage Payment (P/I/MI) | $1,024.50 | $1,444.61 | $1,234.46 |
| Second Mortgage Payment | Deferred | $97.23 | $97.23 |
| Total Monthly Payment (First and Second Mortgage) | $1,024.50 | $1,541.84 | $1,331.69 |
Based on a $200,000 purchase price, 660 credit score. Taxes and insurance excluded.
1 - Conventional HFA First Mortgage with SAM Second Mortgage; 20% down payment plus closing costs.
2 - Conventional HFA First Mortgage (3% down payment and Charter MI) with $12,000 DPA Second Mortgage.
3 - FHA Mortgage through MRB Funding (3.5% down payment) with $12,000 DPA Second Mortgage.
$250,000 Purchase Price
Assuming an average purchase price of $250,000:
- Borrowers save $359-609 per month.
- A SAM mortgage covering 25% of the purchase price equals $62,500 per homebuyer.
- A $1,000,000 contribution will assist 16 homebuyers in your target demographic.
| Terms | Conventional HFA First + SAM Second ¹ | Conventional HFA First + DPA Second ² | FHA MRB First + DPA Second ³ |
|---|---|---|---|
| Interest Rate | 6.625% | 6.625% | 5.75% |
| Base Loan Amount | $200,000 | $242,500 | $241,250 |
| MI Upfront Premium | N/A | N/A | $4,222 |
| Total Loan Amount | $200,000 | $242,500 | $245,472 |
| Monthly Principal/Interest | $1,280.62 | $1,552.75 | $1,432.51 |
| Monthly MI | N/A | $202.41 | $110.57 |
| First Mortgage Payment (P/I/MI) | $1,280.62 | $1,792.33 | $1,543.08 |
| Second Mortgage Payment | Deferred | $97.23 | $97.23 |
| Total Monthly Payment (First and Second Mortgage) | $1,280.62 | $1,889.56 | $1,640.31 |
Based on a $250,000 purchase price, 660 credit score. Taxes and insurance excluded.
1 - Conventional HFA First Mortgage with SAM Second Mortgage; 20% down payment plus closing costs.
2 - Conventional HFA First Mortgage (3% down payment and Charter MI) with $12,000 DPA Second Mortgage.
3 - FHA Mortgage through MRB Funding (3.5% down payment) with $12,000 DPA Second Mortgage.
$300,000 Purchase Price
Assuming an average purchase price of $300,000:
- Borrowers save $413-712 per month.
- A SAM mortgage covering 25% of the purchase price equals $75,000 per homebuyer.
- A $1,000,000 contribution will assist 13 homebuyers in your target demographic.
| Terms | Conventional HFA First + SAM Second ¹ | Conventional HFA First + DPA Second ² | FHA MRB First + DPA Second ³ |
|---|---|---|---|
| Interest Rate | 6.625% | 6.625% | 5.75% |
| Base Loan Amount | $240,000 | $291,000 | $289,000 |
| MI Upfront Premium | N/A | N/A | $5,066 |
| Total Loan Amount | $240,000 | $291,000 | $294,566 |
| Monthly Principal/Interest | $1,53.75 | $1,865.30 | $1,718.01 |
| Monthly MI | N/A | $287.50 | $132.69 |
| First Mortgage Payment (P/I/MI) | $1,536.25 | $2,150.80 | $1,851.70 |
| Second Mortgage Payment | Deferred | $97.23 | $97.23 |
| Total Monthly Payment (First and Second Mortgage) | $1,536.25 | $2,248.03 | $1,948.93 |
Based on a $300,000 purchase price, 660 credit score. Taxes and insurance excluded.
1 - Conventional HFA First Mortgage with SAM Second Mortgage; 20% down payment plus closing costs.
2 - Conventional HFA First Mortgage (3% down payment and Charter MI) with $12,000 DPA Second Mortgage.
3 - FHA Mortgage through MRB Funding (3.5% down payment) with $12,000 DPA Second Mortgage.
$400,000 Purchase Price
Assuming an average purchase price of $400,000:
- Borrowers save $525-909 per month.
- A SAM mortgage covering 25% of the purchase price equals $100,000 per homebuyer.
- A $1,000,000 contribution will assist 10 homebuyers in your target demographic.
| Terms | Conventional HFA First + SAM Second ¹ | Conventional HFA First + DPA Second ² | FHA MRB First + DPA Second ³ |
|---|---|---|---|
| Interest Rate | 6.625% | 6.625% | 5.75% |
| Base Loan Amount | $320,000 | $388,000 | $386,000 |
| MI Upfront Premium | N/A | N/A | $6,755 |
| Total Loan Amount | $320,000 | $388,000 | $395,755 |
| Monthly Principal/Interest | $2,049 | $1,865.30 | $1,718.01 |
| Monthly MI | N/A | $287.50 | $132.69 |
| First Mortgage Payment (P/I/MI) | $2,049 | $2,860.58 | $2,486.44 |
| Second Mortgage Payment | Deferred | $97.23 | $97.23 |
| Total Monthly Payment (First and Second Mortgage) | $2,049 | $2,957.81 | $2,583.67 |
Based on a $400,000 purchase price, 660 credit score. Taxes and insurance excluded.
1 - Conventional HFA First Mortgage with SAM Second Mortgage; 20% down payment plus closing costs.
2 - Conventional HFA First Mortgage (3% down payment and Charter MI) with $12,000 DPA Second Mortgage.
3 - FHA Mortgage through MRB Funding (3.5% down payment) with $12,000 DPA Second Mortgage.
Ready to Work with KHC?
If you are ready to make a high-impact contribution to housing in your area without the administrative burden, we are ready to help.
A member of KHC's staff will contact you shortly after submission.
Additional Resources
Key Terms
- Principal (P) - The initial amount of money borrowed for a loan, excluding interest and additional fees.
- Interest (I) - he cost charged by a lender for borrowing money, typically expressed as an annual percentage rate (APR).
- Mortgage Insurance (MI) - An insurance policy required by lenders to protect them in case of borrower default, typically required when a down payment is less than 20%.
- Charter MI: Charter MI is mortgage insurance coverage offered by Fannie Mae and Freddie Mac for homebuyers at or below 80% of the AMI. This coverage is significantly discounted compared to standard mortgage insurance.
- First Mortgage - The primary loan used to purchase a home. Borrowers will make regular monthly payments (principal and interest) on this primary loan.
- Second Mortgage - A secondary, subordinate loan taken out in addition to the first mortgage. The SAM program is structured as a deferred-payment second mortgage.
- Down Payment Assistance (DPA) Program - A program through KHC structured as a repayable secondary loan, repayable over a 15-year term. DPA provides up to $12,500 toward down payment and closing costs.
- Conventional HFA - A standard, non-government-insured first mortgage offered through a Housing Finance Agency (HFA), like KHC. KHC utilizes eligible programs like Freddie Mac’s HFA Advantage and Fannie Mae’s HFA Preferred.
- FHA MRB - A first mortgage insured by the Federal Housing Administration (FHA) and funded through KHC's Mortgage Revenue Bond (MRB) program.
- *Repayment Trigger Event - A repayment trigger event as it relates to the KHC SAM program includes sale of the property, cash-out refinance of the first mortgage, payoff first mortgage loan, payoff subordinate loan principal balance, rate/term refinance resulting in transfer of servicing from KHC, first mortgage loan becoming due and payable for any reason including but not limited to acceleration by the holder of the first mortgage loan or the filing and recording of a foreclosure complaint.
For informational purposes only. Participants must sign a participation agreement.