Lexington Proposes Shared Appreciation Loans for Buyers
The program offers first-time buyers up to 25% of a home purchase price through interest-free second mortgages.
Updated on Oct. 28, 2026 in Residential
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Lexington Mayor Linda Gorton has proposed a new shared appreciation loan program designed to help first-time buyers in Fayette County. The city-funded initiative aims to increase homeownership access for lower-income households.
Why it matters
By providing interest-free second mortgages with no monthly payments, this program seeks to lower the barrier to entry for potential buyers in a challenging housing market. It specifically targets households earning up to 80% of the median income.
The program features $1 million in total funding projected to assist 15 to 20 first-time homebuyers in Fayette County. Eligible participants can receive a second mortgage covering up to 25% of the home purchase price.
The players
Linda Gorton
The Mayor of Lexington who proposed the local shared appreciation loan program.
Kentucky Housing Corporation
A state agency that will partner with the city to administer the loan program.
Lexington-Fayette Urban County Council
The local governing body that approved the $1 million in funding for the program.
The details
The program works by issuing an interest-free second mortgage that requires no monthly payments, significantly lowering the initial cost burden for qualifying buyers. When the owner eventually sells, refinances, or forecloses on the property, they must repay the original principal plus a share of the home's appreciation. Participants must complete a required homeownership counseling program and meet income limits set at 80% of the area median.
Timeline
Mayor Linda Gorton proposed the loan program on October 27, 2026.
Money Landscape
Lexington's proposal follows a documented trend of municipalities adopting shared appreciation models to expand homeownership opportunities. This approach marks a shift from traditional down payment assistance toward equity-sharing structures intended to keep public funds revolving.
If you are a prospective first-time homebuyer in Fayette County with an income at or below 80% of the median, this program could offer a way to reduce your monthly mortgage obligations. Discuss the long-term trade-offs of shared appreciation loans with a qualified financial professional to see if this fits your goals.
The takeaway
This program offers a unique path to ownership by deferring repayment until a property is sold or refinanced. Keep an eye on future announcements from the city to determine when the application window opens and to confirm your eligibility status.
Further reading
Learn more about local property initiatives in the Residential section.
Source note: This article includes information reported by Wkyt.
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