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Missouri First-Time Home Buyer Programs of 2018

Aug. 3, 2018
Finding the Right Mortgage, Mortgages
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.

National first-time home buyer programs

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

Best for

Low credit score

Low down payment

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

 

» MORE: Requirements for getting an FHA loan

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

 

USDA loans

National program

Best for

Low down payment

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

 

MHDC highlights and eligibility requirements

HIGHLIGHTS

  • Some programs offer down payment assistance.
  • Loans can be used to buy most kinds of residences, except for mobile homes.
  • Federal Housing Administration (FHA), Department of Veterans Affairs (VA), U.S. Department of Agriculture (USDA) and conventional loans are available, all with 30-year terms and fixed rates.
  • Interest rates for some loan programs are below market.
  • First-time home buyers who meet income limits can obtain mortgage credit certificates. Borrowers can get an annual credit of up to $2,000 against federal income taxes. Income and purchase price limits apply.

ELIGIBILITY

  • Income limits vary by loan program, location of the home and household size.
  • Minimum credit score of 620.
  • Maximum total debt-to-income ratio of 45%.
  • Home has to be a primary residence in Missouri.

» MORE:  25 tips for first-time home buyers

Missouri home buyer assistance programs

First Place Loan Program

State program

Learn more

at MHDC

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 Loan Program With Cash Assistance

State program

Learn more

at MHDC

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

 

Next Step

State program

Learn more

at MHDC

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

 

Next Step Cash Assistance Loan

State program

Learn more

at MHDC

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,

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

» MORE: Best Missouri mortgage lenders

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