Central Kentucky banks invest in new housing while helping more buyers afford a home
With economic development studies finding shortages of housing in Central Kentucky — and everywhere else in the nation, banks are improving lending options toincrease the supply. Photo furnished
Central Kentucky financial institutions are proactively creating strategies to strengthen the housing market, which the broader business community says is vital to long-run success — adequate housing being a prerequisite for meeting the workforce needs all community are chasing.
Banks far and wide are making moves, led in dollar terms by Chase Bank, the nation’s largest and a significant Kentucky operator, which recently committed to lend $750 billion toward uplifting the housing market, especially affordable housing.
In Lexington, a city-commissioned study earlier this year estimated a current need for 8,000 more single-family homes and 14,000 rental units.
One of the most significant local initiatives began in 2023 when five banks, led by Central Bank, pooled $3 million to buy a 12-acre tract in north Lexington that been Transylvania University’s baseball field for the purpose of developing what they hope eventually will be 200 affordable housing units.
Stock Yards, Traditional, Republic and Community Trust banks also participated, and they got input from five
local developers: AU Associates, Winterwood, Habitat for Humanity, Urban League of Lexington and Lexington Housing Authority. The strategy has created a special revolving capital pool that helps the builders finance construction as they go.
A similar statewide version of this collaborative model is currently in development.
“This pilot project shows what’s possible when local banks work together on a shared community need,” said Dan Mason, president of Traditional Bank. “We’re looking at how to scale that same model statewide.”
Beyond this project, Mason said, Traditional:
• Is an active buyer of low-income housing tax credits (LIHTC), a key financing tool that helps developers build and preserve affordable rental housing.
• Routinely provides construction financing for low-income housing developments across its footprint.
• Partners with Lexington Habitat for Humanity, contributing volunteer labor, homebuyer education support, and direct financial donations.
Ziegler
Todd Ziegler, Republic Bank Central Kentucky market executive, immediately references the five-bank Affordable Housing Fund in discussing his institution’s efforts.
“In addition to community partnerships, Republic participates in a variety of programs designed to make homeownership more attainable for low- to moderate-income borrowers,” Zeigler said. “These include Federal Home Loan Bank programs offering competitive mortgage rates, Neighborhood Housing Program financing, down payment assistance programs providing up to $6,000 for qualifying borrowers, financing support for Habitat for Humanity homeowners, and Kentucky Housing Corporation (KHC) bond programs.”
Republic also offers the Federal Home Loan Bank’s Welcome Home Program, which provides grant funding to eligible homebuyers for down payment and closing costs, and hosts first-time homebuyer education classes to help prospective homeowners navigate the purchasing process with confidence.
“Republic Bank is actively engaged in expanding access to homeownership and supporting affordable housing initiatives across Kentucky and our broader footprint,” Zeigler said.
PNC Bank, which has the largest deposit market share in Kentucky, deploys lots of equity and debt capital through its PNC Multifamily Capital to support development and preservation of affordable homes for low-income families, seniors, people with disabilities and formerly homeless individuals.
Kentucky is home to PNC Multifamily Capital’s national leader, as well as a robust team of bankers who specialize in this vital scope of work, both locally and nationally, the bank said in a statement to Business Lexington.
PNC Multifamily Capital’s impact largely comes to life through Low-Income Housing Tax Credit (LIHTC) equity investments, which are deployed through both direct investments and syndicated funds to institutional investors.
This summer PNC announced that Lexington’s Malabu Manor is among the developments financed through its LIHTC Fund 104. Malabu Manor will serve seniors and include resident services focused on stability, connection to community resources and ongoing engagement.
Byrd
“As the largest bank in Kentucky, PNC is committed to doing our part to increase housing supply and protect the affordability of existing housing,” Kristen Byrd, PNC regional president for Kentucky, said at the 2026 Kentucky Affordable Housing Conference in Lexington in August.
PNC is putting equity and capital toward development and preservation of affordable rental housing across urban centers, suburban neighborhoods and rural communities, she said.
“An overarching premise that has guided our work in this important space is that addressing the housing affordability challenge requires ongoing multi-stakeholder collaboration, innovation and investment,” Byrd said. “I am encouraged by what is possible when we collaborate to maximize our collective impact. Each community has distinct needs, and the most effective approaches are those shaped by local insight and experience.”
Community banks like Forcht Bank support Kentucky homeownership by making lending decisions locally and invest directly in the communities it serves, said Kimberly Bussell, Forcht marketing director.
While large national institutions can commit resources on a scale that differs significantly from community banks, local banks have a meaningful impact through relationship-based lending and education, support for builders and developers, and helping families achieve homeownership one loan at a time, Bussell said.
On its mortgage side, Traditional Bank has developed a proprietary loan program aimed at solving affordability barriers for first-time and lower-income buyers.
“Affordability is one of the biggest barriers facing today’s homebuyers,” said Chris Waford, Director of Mortgage Lending at Traditional Bank. “Our HJW Opportunity Home Loan Program is designed to remove some of those traditional roadblocks while still setting borrowers up for long-term success.”
The HJW Opportunity Home Loan Program is designed specifically for low- to moderate-income borrowers and includes:
• No minimum credit score requirement
• Little to no down payment required
• Affordable fixed-rate financing
• Flexible underwriting for borrowers who may not fit conventional guidelines
• Compatibility with most down-payment assistance programs used across the industry
• Built-in homebuyer education to prepare borrowers for the responsibilities of ownership
In addition to the HJW program, Traditional partners with several outside organizations to connect qualifying buyers with down-payment assistance funds, including the Federal Home Loan Bank, Community Ventures, and Louisville Metro. Depending on eligibility, qualifying homebuyers can receive up to $50,000 in down-payment assistance through these partnerships.
“By combining affordable financing with responsible, flexible underwriting and borrower education, we’re working to create more opportunities for sustainable home ownership in the communities we serve,” Waford said.