Homeownership Program FAQs
Below are answers to some of the most common questions we receive about having a new home built through the Housing Development Alliance. This page is meant to help you understand how our Homeownership Program works and what to expect along the way.
If you don’t see your question here – or would like help talking through your situation – please call 606-436-0497. Our staff is happy to help.
About HDA & the Program
About HDA & the Program
What is the Housing Development Alliance (HDA)?
The Housing Development Alliance (HDA) is a nonprofit affordable housing developer serving Eastern Kentucky. For more than 30 years, we’ve helped hundreds of individuals and families become homeowners and supported thousands more through home repairs, rentals, and housing counseling.
Our Homeownership Program is designed to help low-income families build and sustain long-term housing stability.
Eligibility & Readiness
What if I have bad credit?
You are not alone – and bad credit does not automatically disqualify you. HDA has certified housing counselors who can work with you to improve your credit and create a realistic path toward homeownership. While there’s rarely a quick fix, we’ll help you build a plan and take next steps.
Do I need to own land already?
No. You do not need to own land to qualify. If needed, the cost of purchasing land and preparing it for construction (such as water, septic, grading, or driveway access) can often be included in your total loan package.
Can I buy an existing house through HDA?
Most of our funding is designated for building new homes. However, we can refer you to other programs that may help with purchasing an existing home, and we’re happy to point you in the right direction.
Timeline & Process
How long does the homeownership process take?
Every situation is different, but most families should expect the full process – from application to move-in – to take about 10–12 months.
On average:
Loan preparation and qualification: ~3 months
Land purchase (if needed): ~2 months
Home construction: ~5 months
If additional credit or financial counseling is needed, the process may take longer.
Cost & Financing
What is the interest rate?
Interest rates vary depending on the funding sources used and your household income. Most HDA homeowners receive interest subsidies that lower their effective rate. While program rates may range higher, the average interest rate paid by HDA homeowners is typically between 1% and 3%.
How much will my monthly payment be?
We structure loans so monthly payments are affordable – generally around 20–30% of your gross monthly income. This payment usually includes property taxes and homeowner’s insurance.
Is a down payment required?
No cash down payment is required. Instead, homeowners contribute “sweat equity” by helping build their home or participating in other approved activities. If physical participation isn’t possible, alternative arrangements can be made.
How much does an HDA home cost?
The total cost of a new home varies depending on land, site work, and infrastructure needs. Homes are sold for no more than their appraised value, which is typically $150,000–$210,000 for a 3-bedroom home.
Are there other costs I should plan for?
Yes. Some costs – such as appliances, utility deposits, and insurance – are not always included in the mortgage. HDA offers matched savings and counseling support to help homeowners prepare for these expenses.
The Home Itself
How big will my house be?
Most HDA homes are 3-bedroom houses ranging from 1,000–1,250 square feet. The size and layout depend on household size, income, and accessibility needs.
What’s included in the home?
Your home will be move-in ready, with connections to utilities, a driveway, and sidewalk. You’ll have input on finishes like flooring, paint, siding, and fixtures so the home reflects your style and needs.
What about utility costs?
HDA homes are designed to be energy-efficient. Average electric bills (including heating and cooling) typically range from $120–$150 per month, depending on usage.
