Escrow and Insurance

Homeowner’s insurance (hazard insurance) is a requirement of your mortgage with Kentucky Housing Corporation (KHC). It protects your property from loss. Generally, the amount of insurance must be enough to cover the cost to replace the house or unpaid principal amount of the loans secured by the property. Homeowner’s insurance will be paid through your escrow account. The payment will be made in full regardless of the amount. Your escrow account will be analyzed annually in January and if too much was collected, an escrow refund check will be issued. If there is a deficit in your account, your mortgage payment may increase to cover the difference.

Proof of Insurance

Proof of Insurance was provided at the time of closing. If you change your insurance carrier, please send us the updated contact information to ensure payments are made to the proper carrier.

Forced Placed Insurance

If KHC receives notice your property is not covered by homeowner’s insurance and we are unable to contact you to discuss coverage options, we are required to place coverage on the property. This is called Forced Placed Coverage. The premiums could be higher, which can impact your mortgage payment after your loan goes through the escrow analysis period in January.

Flood Insurance

Flood insurance is required for properties located in federally-mandated Special Flood Hazard areas. This term is used by the Federal Emergency Management Agency (FEMA) in the National Flood Insurance Program (NFIP) to refer to the land area covered by the floodwaters of the base or 100-year flood – an area of land that has an approximate 1 percent probability of a flood occurring on it in any given year. Flood insurance will be paid for though your escrow account, if applicable.

Private Mortgage Insurance

Some of our conventional loans have mortgage insurance that is required if you have less than 20 percent equity (or down payment) in your home. It protects the mortgage lender from losses if a customer is unable to make loan payments and defaults on the loan.

Additional mortgage term life and disability insurance information are available upon request.