Missouri First-Time Home Buyer Programs of 2021

Missouri First-Time Home Buyer Programs of 2018

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If you're a first-time home buyer in Missouri, the state has programs to help you achieve your dream of homeownership. The Missouri Housing Development Commission, or MHDC, offers mortgage programs for first-time home buyers, with and without down payment assistance. You can qualify as a first-time buyer if you haven't owned a primary residence for three years.

The first-time home buyer requirements are waived for veterans, active-duty military and people buying homes in economically disadvantaged areas.

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Min. Credit Score

620

Min. Credit Score

620

Min. Credit Score

620

Min. down payment

3%

Min. down payment

3%

Min. down payment

3%

National first-time home buyer programs

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

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MHDC highlights and eligibility requirements

HIGHLIGHTS

  • Some programs offer down payment assistance.

  • Loans can be used to buy most kinds of residences.

  • Interest rates for some loan programs are below market.

  • Qualified first-time home buyers can obtain mortgage credit certificates.

ELIGIBILITY

  • Income and purchase price limits vary by loan program, location of the home and household size.

  • Meet minimum credit score requirements.

  • Home has to be a primary residence in Missouri.

Missouri home buyer assistance programs

First Place Loan Program

Best for:

Low mortgage rates, down payment assistance

What you need to know:

The First Place loan program comes in two varieties: with down payment assistance and without. The program without down payment assistance offers below-market interest rates on mortgages for first-time home buyers. Interest rates are usually a quarter to half a percentage point lower than rates of First Place loans with cash assistance. In one recent check-in, the rate was three-quarters of a percentage point lower.

First Place Loan Program With Cash Assistance

Best for:

Down payment assistance, closing cost assistance

What you need to know:

The First Place cash assistance loan is for first-time home buyers who meet income limits. It provides down payment assistance of 4% of the loan amount, which can be used to pay down payment and closing costs. The assistance is a forgivable second mortgage without monthly payments. This second mortgage is forgiven after 10 years if the borrower keeps the loan and the home is still the borrower’s primary residence. After the first five years have passed, 1/60th of the loan is forgiven every month for the next five years.

Next Step

Best for:

Low mortgage rates

What you need to know:

The Next Step program is primarily for home buyers who earn too much to qualify for First Place loans, or who buy homes at prices above the cutoff for the First Place loan program. Next Step has limits on income and purchase price, but those limits are higher than First Place. In addition, Next Step is available to repeat home buyers as well as first-timers.

Next Step Cash Assistance Loan

Best for:

Low mortgage rates, down payment assistance, closing cost assistance

What you need to know:

Home buyers getting Next Step loans don’t have to get down payment assistance if they don’t need it. But borrowers do have the option of accepting assistance of 4% of the loan amount, which can be used to offset down payment and closing costs. As with the First Place program with cash assistance, the down payment help is a second mortgage without monthly payments. It is forgiven after 10 years if the borrower keeps the loan and continues to use the home as a primary residence. After the first five years, 1/60th of the loan is forgiven each month for the next five years.

Mortgage Credit Certificate

Best for:

Tax credit

What you need to know:

First-time home buyers who meet income limits can obtain mortgage credit certificates from the MHDC. Borrowers can get an annual credit of up to $2,000 against federal income taxes. Income and purchase price limits apply.

Your next step

Visit the MHDC's homeownership programs page for a list of loan programs, with links to details about each.

Find a list of mortgage rates for each program, updated daily.

Then, contact a participating lender. MHDC maintains a list of certified lenders, which is available on the lender locator page.

More from NerdWallet

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Min. Credit Score

620

Min. Credit Score

620

Min. Credit Score

620

Min. down payment

3%

Min. down payment

3%

Min. down payment

3%

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