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Missouri First-Time Homebuyer Programs   

If you are a first-time buyer looking to purchase a home in Missouri, you should know that your state offers multiple programs that can help you navigate an often overwhelming process.

These programs aim to meet a variety of needs and address common hurdles that new homebuyers face, such as coming up with the down payment and other upfront costs and maximizing purchasing dollars.

In this guide, we will cover:

Missouri first-time homebuyer programs

Missouri’s first-time homebuyer programs are funded by the Missouri Housing Development Commission (MHDC). However, the loans are administered and facilitated by private lenders that the MHDC certifies.

The state offers three main programs with options that provide multiple avenues of assistance to buyers. The programs are aimed at low-to-moderate-income households, so they have purchase price and income limits.

In January 2019, we researched the latest information on the first-time homebuyer programs in Missouri, which included reviewing the Missouri Housing Development Commission guidelines. Here’s what first-time homebuyers in Missouri need to know.

Eligibility for Missouri assistance

Homebuyers who wish to take advantage of Missouri’s first-time homebuyer programs will need to meet the eligibility criteria established by the MHDC. Each lender may have additional guidelines and requirements.

  • Must be first-time homebuyers (this includes new homebuyers and buyers who have not owned a home in the past three years)
  • Minimum credit score of 620 (varies by lender and mortgage type; some lenders may require higher minimum scores)
  • Debt-to-income ratio of 45% or less (also dependent on lender)
  • Maximum home purchase price of $271,164 for a single-family home or $347,178 for a duplex (in targeted areas, higher limits apply: $331,423 for a single-family home and $424,329 for a duplex)
  • Buyer must occupy the home within 60 days of closing
  • Home must be owner-occupied throughout the life of the loan
  • Homes purchased must be located outside of the 100-year floodplain

Note: You can check current mortgage rates for Missouri here.

First Place Loan program

Missouri’s First Place Loan program helps make homeownership more affordable by offering buyers competitive interest rates. Additionally, the program has two parts, providing buyers the flexibility to choose an option that meets their needs.

Features

  • Low mortgage rates
  • FHA, VA, USDA and Fannie Mae conventional, 30-year loans are eligible
  • Additional interest rate reduction if property is in a “targeted area” (areas identified by the MHDC as economically distressed)
  • Higher income limits if property is in a targeted area

Loan program has two options that provide additional features:

Cash Assistance Loan (CAL)

  • Down payment and closing cost assistance: Homebuyers can receive a forgivable second mortgage up to 4% of the loan amount to be used for the down payment or toward closing costs.
  • Second mortgage is forgiven if the borrower stays in the home for 10 years (partially forgiven between years five through 10).

Non-Cash Assistance Loan (Non CAL)

  • Further interest rate reduction is available for borrowers who do not take out a CAL.

Eligibility

  • Annual household income must be less than established limits. The maximum income limit ranges between $66,400 and $92,000, depending on family size and county. (For properties in targeted areas, the maximum income limit ranges between $79,680 and $112,000.)
  • Eligible properties include single-family homes, duplexes, semi-detached homes, condos, townhomes or manufactured homes permanently attached to a foundation.
  • If purchasing a duplex, the property must be at least five years old.

Next Step program

The Next Step program is open to new buyers as well as non-first-time buyers and provides assistance with some border parameters. Like the First Place Loan program, this program has two parts.

Features

  • Low mortgage rates
  • FHA, VA, USDA and Fannie Mae conventional, 30-year loans are eligible
  • Additional interest rate reduction if property is in an “opportunity area” (designated areas with low poverty rates, higher education and higher income)
  • Can be combined with tax credit program (detailed below)
  • Slightly higher income limits than the First Place Loan program for non-targeted areas

Loan program has two options that provide additional features:

Cash Assistance Loan (CAL)

  • Down payment and closing cost assistance: Homebuyers can receive a forgivable second mortgage up to 4% of the loan amount to be used for the down payment or toward closing costs.
  • The second mortgage is forgiven if the borrower stays in the home for 10 years (partially forgiven between years five through 10).

Non-Cash Assistance Loan (Non CAL)

  • Further interest rate reduction is available for borrowers who do not take out a CAL.

Eligibility

  • Both first-time buyers and non-first-time buyers are eligible.
  • Annual household income must be less than established limits, which range between  $79,680 and $112,000, depending on family size and county.
  • Eligible properties include single-family homes, duplexes, semi-detached homes, condos, townhomes or manufactured homes permanently attached to a foundation.
  • If purchasing a duplex, the property must be at least five years old.

Mortgage credit certificate (MCC) program

Features

  • Federal tax credit of 25% of the annual mortgage interest paid (not to exceed $2,000 or the borrower’s tax liability); this dollar-for-dollar tax credit lasts for the life of the loan
  • Can be combined with the Next Step program for a greater tax credit:
    • 35% if used with the Next Step CAL program
    • 45% if used with the Next Step Non-CAL program

Eligibility

  • Annual household income must be less than established limits, which range between  $66,400 and $92,000, depending on family size and county. (For properties in targeted areas, maximum income limits range between $79,680 and $112,000.)
  • Purchase price may not exceed $271,164 ($331,423 in targeted areas).
  • The property can be a single-family home, one-half duplex, semi-detached, condo, townhome or a manufactured home permanently attached to a foundation (duplexes are not eligible).

How it works

To apply for any of the MHDC’s first-time homebuyer programs, you will need to contact a certified lender directly. You can search for certified lenders in your area on the MHDC’s page.

You can also check your eligibility for the programs before contacting lenders.

Expect to have the following documentation available when you are ready to apply:

  • A list of all debts and credit cards (including names and addresses of companies account numbers, unpaid balances and monthly payments)
  • Name and address of employer(s)
  • Copies of federal income tax returns for the past three years
  • A copy of your most recent pay stub(s)
  • Copies of divorce decrees, if applicable, and any other documents relating to circumstances that affect your financial status

National first-time homebuyer programs

In addition to the programs offered by the MHDC, Missouri residents can access federal first-time homebuyer programs. Agencies offering such assistance include the FHA, Fannie Mae and Freddie Mac, the USDA and the VA. The programs are designed to make homeownership more accessible by allowing lower down payments or by having flexible borrower criteria. Review and compare national programs in this guide.


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