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 seamless, turnkey solution for local partners. All you have to do is provide your contribution and set your program parameters. KHC handles the rest:
- 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
Participants retain control over how their contributions are utilized. You can customize your restricted pool by selecting from a list of targeted parameters:
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 (typically structured as 20% for the down payment to eliminate mortgage insurance requirements, and 5% for closing costs or additional down payment).
- Zero Monthly Burden: SAM second mortgages are structured as 0% interest with no monthly payment.
- Deferred Repayment: Borrowers repay the SAM principal and a pro-rata share of the home's appreciation only at the time of a triggering event (sale of the home, refinance, payoff of the first mortgage, foreclosure events, or any refinancing that causes a servicing transfer).
- Homebuyer Education: Borrowers must complete required SAM homebuyer education.
- Annual Disclosure: Borrowers must receive an annual disclosure about repayment.
- 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 $300,000:
- 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 Partner 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.