Getting ready to buy your first home can be exciting as well as daunting — especially in a competitive market like the one in Missouri, where prices have been trending upward as of late. The Missouri Realtors Association reports that the average home price in The Show Me State came to $254,195 in January 2022, an 8.2 percent increase compared to the average sale price of $234,973 in January 2021.
To help provide affordable homebuying opportunities to residents in the state, the Missouri Housing Development Commission has special programs for first-time or repeat homebuyers, military veterans and those purchasing homes in designated target areas. Through the agency, you could be eligible for a low- or no-down-payment mortgage with a lower interest rate and down payment assistance.
Missouri first-time homebuyer loan programs
MHDC First Place Loan Program
The Missouri Housing Development Commission’s (MHDC) First Place Loan is for first-time homebuyers (or those who haven’t owned a home in the past three years) and veterans. The program comes with a competitive fixed rate, often below-market, which can apply to a conventional, FHA, VA or USDA loan.
First Place loans are available with or without a Cash Assistance Loan (CAL) to help with a down payment and closing costs. Non-CAL First Place loans have a lower interest rate than CAL First Place loans, however.
To qualify for a First Place Loan, you’ll need to meet MHDC purchase price and household income limits. The purchase price can be up to $311,979 for a single-family home or $399,448 for a duplex. In target areas, the maximum price is higher: $381,308 for a single-family home or $488,215 for a duplex.
Qualifying income limits, on the other hand, are determined by the location of the property and the number of people in your household. You can see a detailed income limit table on the MHDC website.
Most types of homes are eligible for this program, including single-family homes, one-half of a duplex or duplex (so long as you’re living in one of the units), semi-detached houses, condominiums, townhomes and some manufactured homes.
If you’re a military veteran, you don’t need to be a first-time buyer, but you do need a DD Form 214 or statement of service showing that you’ve served on active duty within the past 25 years.
MHDC Next Step Program
Designed for both first-time and repeat homebuyers, MHDC’s Next Step Program provides affordable mortgages with or without the CAL down payment and closing cost assistance. Conventional, FHA, VA and USDA loans are available through this program. You can also purchase most types of homes, as long as they fall within the purchase price limit of $381,308 (single-family home) or $461,046 (duplex).
The income limits for each county, which vary by household size, are available on the MHDC website. They are generally higher than the income limits of the First Place program, making a Next Step loan an option for first-time buyers who don’t meet the First Place criteria.
Missouri down payment assistance
MHDC First Place Cash Assistance Loan (CAL)
Borrowers who qualify for an MHDC First Place mortgage can receive down payment and closing cost assistance through one of the agency’s Cash Assistance Loans (CAL). The assistance, worth 4 percent of the mortgage amount, comes as a forgivable second mortgage that doesn’t need to be paid back as long as you stay in the home for 10 years.
MHDC Next Step Cash Assistance Loan (CAL)
Next Step mortgage borrowers can also receive a 4 percent Cash Assistance Loan to use http://mhdc.com/homes/cal/index.htmtoward a down payment or closing costs. As with the First Place CAL, this second loan is completely forgiven after 10 years as long as you stay in the home.
Other Missouri homebuyer assistance programs
Mortgage credit certificate (MCC)
Missouri’s mortgage credit certificate (MCC) allows first-time homebuyers and veterans to save money on their tax bill thanks to an income tax credit, usable for as long as they live in their home. The MCC in Missouri is worth 25 percent of your total annual mortgage interest. To qualify, you must meet the program’s income limits, and the home you’re buying must be no more than$311,979 (or $381,308 if in a targeted area).
Other first-time homebuyer loan programs
If you’re buying your first home in Missouri, be sure to check your eligibility for the many nationally-available loan programs designed to help first-time homebuyers. FHA loans, for example, can be easy to qualify for even if you have low credit or a small down payment. Military members and veterans could qualify for a VA loan with no down payment requirement. Those buying homes in certain rural areas can qualify for 100-percent financing with a USDA loan. You can find out how to qualify for these programs, and others, with Bankrate’s first-time homebuyer loans and programs guide.
For other Missouri homeownership programs, including by city, visit HUD.gov.
Get started
As you start your homebuying journey, take the time to compare the latest mortgage rates from a variety of Missouri mortgage lenders.
For details on any of the Missouri Housing Development Commission’s homebuyer programs, connect with a participating lender in your area by searching your zip code or city through the MHDC’s list of approved lenders.