Missouri Homebuyer Incentive Programs
$34,000
About the Programs
First Place
Down Payment Assistance for qualified first-time homebuyers and Veterans.
The First Place Program helps potential first-time homebuyers or qualified Veterans save money by offering mortgage financing with interest rates that are lower than regular market rates. For homebuyers with limited savings, the program provides the option for Cash Assistance to be used for down payment and closing costs.
Loans are provided by Certified Lenders for any eligible property in the State of Missouri. All interest rates and allowable closing costs are set by the Missouri Housing Development Commission with no minimum down payment or minimum loan amounts.
First Place With Down Payment Assistance
Not only can first-time homebuyers* receive lower rates, qualified homebuyers are eligible to receive a 100% forgivable second loan equal to 4% of the total mortgage amount to help with down payments and closing costs. The second loan will be forgiven if the borrower stays in the home and maintains the original loan for ten years. After year five, the second mortgage will begin diminishing by 1/60 every month until year 10 when it will be completely forgiven.
First Place Without Down Payment Assistance Loans
Qualified first-time homebuyers* may opt to use the First Place Program without Down Payment Assistance to save even more money by lowering their initial interest rates. Typically, these loans are .25% to .50% below the rates offered with Down Payment Assistance. Non-Down Payment Assistance Loans are best for buyers who have adequate funds to pay down payment and closing costs but are looking to save more money with better rates.
Eligible Loans
- Initial purchase loans
- FHA, VA, or USDA-Rural Development
- FNMA HFA Preferred Conventional or Freddie Mac HFA Advantage Conventional
- 30-year loans
- Refinanced mortgage loans are not eligible. Exceptions are construction-to-permanent loans and bridge loans with an initial term of less than 24 months.
Next Step
The Next Step Program gives potential first-time and repeat homebuyers outside the First Place Program income limits the edge they need to purchase their first home. Next Step loans have higher income and purchase price limits than the MHDC First Place Loan Program. A great option for first-time buyers with higher incomes. For potential homebuyers with limited savings, the program provides the option for Cash Assistance to be used for down payment and closing costs. Loans are provided by Certified Lenders for any eligible property in the State of Missouri. All interest rates and allowable closing costs are set by the Missouri Housing Development Commission with no minimum down payment or minimum loan amounts.
Cash Assistance Loans
Not only can homebuyers receive lower rates, qualified homebuyers are eligible to receive a 100% forgivable second loan equal to 4% of the total mortgage amount to help with down payments and closing costs. The second loan will be forgiven if the borrower stays in the home and maintains the original loan for ten years. After year five, the second mortgage will begin diminishing by 1/60 every month until year 10 when it will be completely forgiven.
Non-Cash Assistance Loans
In many instances, qualified first-time homebuyers may opt for a Non-Cash Assistance Loan to save more money by receiving lower interest rates and lower monthly payments. Typically, these loans are .25% to .50% below the rates offered with Cash Assistance (subject to market trends). Non-Cash Assistance Loans are best for buyers who have adequate funds to pay down payment and closing costs who are looking to save more money over time.
Mortgage Credit Certificates (MCC)
Some borrowers may be able to pair their Next Step Loan with an MCC to save money over time. An MCC allows a homeowner to receive a federal tax credit for a portion of their mortgage interest. Pairing a Next Step loan product with an MCC can put up to $2,000 a year back into your pocket. A borrower must be a first time homebuyer, meeting income and purchase price limits, and meet minimum credit score requirements.
Eligible Loans
• Initial purchase loans
• FHA, VA, or USDA-Rural Development
• FNMA HFA Preferred Conventional or Freddie Mac HFA Advantage Conventional
• 30-year loans 2 | P a g e
• Refinanced mortgage loans are not eligible. Exceptions are construction-topermanent loans and bridge loans with an initial term of less than 24 months. Talk to a certified lender to help you decide the best loan type for you.
Eligible Borrowers
Eligible borrowers must meet credit score, debt-to-income ratio thresholds, and be within eligible household income ranges. Minimum eligibility requirements include:
• First-time homebuyer or qualified Veteran*
• Minimum credit score of 640 (subject to change)
• Debt-to-income ratio of 45% or less for FHA, VA, and USDA-RD (up to 50% DTI is allowable with a credit score of 680 or above for these loans)
• Debt-to-income ratios up to 50% or less for Freddie Mac and Fannie Mae HFA loan programs
• The total gross annual household income must be within the established limits (vary by area)
• Loans are subject to federal compliance requirements and may have minimum credit scores greater than 640—lenders reserve the right to be more restrictive
Total gross annual household income is calculated using all sources of income for all borrowers and household members living, or intending to live in the home including, but not limited to wages, overtime, bonuses, child support, alimony, commissions; and earnings from a second job; business and investments.
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