Getting ready to buy your first home can be exciting as well as daunting — especially in the competitive market of Missouri, where prices have been trending upward as of late.

To help provide affordable homebuying opportunities to first-time buyers 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 down payment assistance (more on that below). No-assistance First Place loans have a lower interest rate than First Place loans paired with down payment help.

To qualify for a First Place Loan, you’ll need to meet MHDC purchase price and household income limits. The home’s purchase price can be up to $481,176 for a single-family home. In target areas, the maximum price is higher: $588,104 for a single-family home.

Qualifying income limits, on the other hand, are determined by the location of the property and the number of people in your household.

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 down payment assistance. The program includes conventional, FHA, VA and USDA loans. You can also purchase most types of homes, as long as they fall within the purchase price limits by property type.

The income limits for each county, which vary by household size, 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 down payment assistance

Borrowers who qualify for an MHDC First Place or Next Step mortgage can receive up to 4 percent of the mortgage amount in a forgivable second mortgage. This second mortgage doesn’t need to be paid back as long as you stay in the home for 10 years.

Other Missouri homebuyer assistance programs

Mortgage credit certificate (MCC)

A mortgage credit certificate (MCC) allows first-time homebuyers and veterans to save money by claiming mortgage interest as a federal tax credit, usable for as long as they live in their home. The MCC in Missouri is worth up to $2,000 per year.

Other first-time homebuyer loan programs

In addition to Missouri state homebuying programs, consider any of these nationally available first-time homebuyer loan programs, including:

  • FHA loans – If you have a lower credit score or limited savings, consider an FHA loan. These loans are widely available, have a minimum credit score of 580 and require a down payment as little as 3.5 percent.
  • VA loans – If you’re a member of the military or veteran, you could qualify for a VA loan, which doesn’t require a down payment.
  • USDA loans – USDA loans don’t have a down payment requirement, but are only available to borrowers buying in a USDA-eligible rural area. You typically need a credit score of 640 or higher to qualify.
  • Good Neighbor Next Door program – This HUD program has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price.

Get started

Now that you know some options available to first-time homebuyers in Missouri, you’re ready to get started with your home purchase. Here are some next steps:

  • Do your homework. For details on any of the Missouri Housing Development Commission’s homebuyer programs, connect with a participating lender in your area.
  • Work on your credit score. It’s the most important factor in determining your mortgage rate, so focus on boosting your number.
  • Compare lenders. Regardless of which program you choose, it’s important to shop around for mortgage offers. Interest rates are always changing, so if you find a rate that’s especially competitive, be sure to lock it.