Missouri Down Payment Assistance and First-Time Homebuyer Programs

There are plenty of reasons aspiring home buyers are moving to Missouri to buy their new home. Missouri has a relatively low cost of living, so that means more bang for your buck for your new home and your new lifestyle. The median sale price of a home in Missouri is below $250,000. Furthermore, Missouri has an active arts and music scene, specifically in its big cities like St. Louis and Kansas City. Outside of the big cities, you can enjoy plenty of natural beauty as well.

If you are looking to buy a home in the Show-Me state, you will need funds for down payment and closing costs. Good news, there are several down payment assistance programs and home loans that can give you $10,000 or more to buy your new home.

Looking for assistance in the city of Columbia?

This page lists all of the assistance available to Missouri homebuyers, including statewide and local resources. If you’re looking for information about down payment assistance in the city of Columbia only, you can find local information here.

Down payment assistance programs in Missouri

Homebuyers in Missouri are eligible for several down payment assistance programs, at the national, state and local levels. These programs are designed to help you become a home owner–even with rising home prices and interest rates–by helping with your down payment, saving money on closing costs, helping you find a lower interest rate or a tax credit. Here are some of the programs available in Missouri.

MHDC First Place Loan

The Missouri Housing Development Commission sponsors several programs for Missouri homebuyers. The MHDC First Place loan program is a great down payment assistance program for first time home buyers and veterans who are looking to become homeowners. To take advantage of MHDC loan program, you’ll need to work with one of their certified lenders. Stairs Financial can help match you with a lender that’s right for you.

Down payment assistance: Up to 4% of the mortgage amount

Assistance type: Forgivable second mortgage (10 year forgivable loan)

Sponsor: MHDC

Income limits: Up to $117,875 in Kansas City area, $115,575 in St. Louis area, $107,180 in Columbia area, $100,625 in Jefferson area, $98,440 in all other areas

Purchase price limit: $481,176 ($616,111 for 2-family residence)

Minimum borrower contribution: None

Loan requirements: 

• Initial 30-year purchase loans
• FHA loans, VA loans, or USDA loans
• FNMA HFA Preferred Conventional or Freddie Mac HFA Advantage Conventional
• Refinanced mortgage loans are not eligible. Exceptions are construction-to-permanent loans and bridge loans with an initial term of less than 24 months.

Eligible borrowers:

• First-time homebuyer or Veteran
• Minimum credit score of 640 (however, loans are subject to federal compliance requirements and may have minimum credit scores greater than 640—lenders reserve the right to be more restrictive)
• Debt-to-income ratio of 45% or less
• Debt-to-income ratios up to 50% or less for FHA and Government Sponsored Entities (minimum credit score of 680 with these circumstances)

MHDC Next Step Loan

The MHDC Next Step program is similar to the First Place program, but there’s no first time home buyer requirement. Furthermore, there are higher income limits and purchase price limits, so if you don’t qualify for First Place but you still want a down payment loan program that can provide closing cost assistance, you could still qualify for Next Step.

Down payment assistance: Up to 4% of the mortgage amount

Assistance type: Forgivable second mortgage (10 year forgivable loan)

Sponsor: MHDC

Income limits: Up to $143,500 in Kansas City area, $140,700 in St. Louis area, $130,480 in Columbia area, $122,500 in Jefferson area, $119,840 in all other areas

Purchase price limit: $588,104 ($753,024 for 2-family residence)

Minimum borrower contribution: None

Loan requirements: 

• Initial 30-year purchase loans
• FHA loans, VA loans, or USDA loans
• FNMA HFA Preferred Conventional or Freddie Mac HFA Advantage Conventional
• Refinanced mortgage loans are not eligible. Exceptions are construction-to-permanent loans and bridge loans with an initial term of less than 24 months.

Eligible borrowers:

• Minimum credit score of 640 (however, loans are subject to federal compliance requirements and may have minimum credit scores greater than 640—lenders reserve the right to be more restrictive)
• Debt-to-income ratio of 45% or less
• Debt-to-income ratios up to 50% or less for FHA and Government Sponsored Entities (minimum credit score of 680 with these circumstances)

MHDC Mortgage Credit Certificate

Tax credits are an important way to manage your monthly housing costs as a home buyer. The MHDC Mortgage Credit Certificate lets first time home buyers claim a tax credit on their federal tax return for a portion of mortgage interest paid during a tax year, reducing their mortgage expenses. Missouri home buyers can combine the MHDC Mortgage Credit Certificate with the Next Step program as well.

Tax Credit: Up to $2,000

Assistance type: Federal tax credit

Sponsor: MHDC

Income limits: Up to $143,500 in Kansas City area, $140,700 in St. Louis area, $130,480 in Columbia area, $122,500 in Jefferson area, $119,840 in all other areas

Purchase price limit: $588,104 ($753,024 for 2-family residence)

Minimum borrower contribution: None

Loan requirements: 

• Initial 30-year purchase loans
• FHA loans, VA loans, or USDA loans
• FNMA HFA Preferred Conventional or Freddie Mac HFA Advantage Conventional
• Refinanced mortgage loans are not eligible. Exceptions are construction-to-permanent loans and bridge loans with an initial term of less than 24 months.

Eligible borrowers:

• First-time homebuyer or Veteran
• Minimum credit score of 640 (however, loans are subject to federal compliance requirements and may have minimum credit scores greater than 640—lenders reserve the right to be more restrictive)
• Debt-to-income ratio of 45% or less
• Debt-to-income ratios up to 50% or less for FHA and Government Sponsored Entities (minimum credit score of 680 with these circumstances)

City of Columbia Homeownership Assistance Program

The City of Columbia sponsors its own Homeownership Assistance Program for buying within Columbia city limits. It’s designed for first time home buyers and displaced homemakers (primary caregivers who are unemployed).

Down payment assistance: $5,000-$10,000

Assistance type: 10 year Forgivable loan (0% interest)

Sponsor: City of Columbia

Income limits: $52,200 (family of 1), $74,550 (family of 4)

Purchase price limit: Up to $482,000 (different limits by bedrooms for existing homes and new builds)

Minimum borrower contribution: $500

Eligibile borrowers:

• First time homebuyers or displaced homemakers
• Must complete homebuyer education course
• Buyer(s) must have an average combined credit score not less than 600
• Buyer(s) cannot have more than $15,000 in readily available resources
• Prior to receiving city funds, the buyer is required to sign a Deed of Trust, Promissory Note, and Borrower’s Agreement to prevent the leasing, subleasing or selling of their home for a minimum of ten years

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.