Buying a new home, even with Missouri’s low cost of living, is an expensive undertaking. In recognizing this fact, the state government of Missouri created the Missouri-Housing-Development-Commission (MHDC). Missouri down payment assistance programs include services for first-time home-buyers, military veterans, and those desiring to move to an urban area.
The “First Place” loan program is a service offered by the MHDC which provides cash assistance loans (CALs) for those needing money upfront for down payments as well as non-cash assistance loans (non-CALs). The interest rates on these loans are affordable: a 30 year fixed mortgage CAL starts at 4.25% and a non-CAL starts at 3.75%. In order to qualify for this program, individuals must be first-time home buyers.
Military veterans do not need to be first-time home buyers of Missouri order to qualify for a subsidized loan with a below-market interest rate. In order to qualify, veterans must be income-eligible and have good credit. The veteran must apply within 25 years after the date he or she was discharged from active duty service. Finally, veterans seeking financing will require a DD Form 214: A Certificate of Release or Discharge frm Active Duty along with a Statement of Service signed by the veteran’s commanding officer.
Finally, the MHDC provides individuals who have lost their homes in a disaster with cash assistance loans with up to 5% down payment. In order to qualify, individuals must be Missouri citizens affected by a severe weather disaster which caused the loss of their home. Individuals must be living in one of the 15 disaster-area counties in order to qualify for disaster down payment assistance and sign up with an affiliated lender.
Missouri Down Payment Assistance Programs
Cash Assistance Payment Program This Missouri down payment program offers first time home buyers a grant of 4.5 percent of the loan amount to use for Missouri down payment and closing costs. While no junk fees are allowed to be charged, lenders can apply standard closing costs.
Non Cash Assistance Payment Program This Missouri down payment program offers lower interest rates for Missouri borrowers in the First Place Program who do not require Missouri down payment assistance.
Regardless of which type of down payment program, you will first need a mortgage. Below are mortgages that require low or no down payments:
No Down Payment Mortgages – mortgages that require no down payment
USDA Rural Loan – the purpose of the Single Family Housing Direct Home Loan is to assist low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. There is no down payment. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
VA Home Loan – VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. There is no down payment as long as the sales price doesn’t exceed the appraised value.
Low Down Payment Mortgages – mortgages that require up to 3.5% down payment
FHA Mortgage Loan – the purpose of the FHA Home Mortgage Loan is to provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A down payment of just 3.5 percent is required and may consist entirely from “gift funds.” The credit score requirement is 580.
Home Possible® Advantage Mortgage – the purpose of the Home Possible® Advantage mortgage by Freddie Mac is to offer low down payments for low- to moderate-income homebuyers or buyers in high-cost or underserved communities. Down Payment can come from a variety of sources, including friends and family, employer-assistance programs and secondary financing.
The HomeReady™ Mortgage – the purpose of the HomeReady™ mortgage by Fannie Mae is to provide flexibility for applicants buy home with down payments as low as 3%, below market mortgage rates, co-borrower flexibility, additional income sources and reduced mortgage insurance costs.
More places to find assistance on down payment:
HUD Programs
The US Department of Housing and Urban Development (HUD) offers the following programs:
The Good Neighbor Next Door Program was created by U.S. Department of Housing and Urban Development (HUD) to help law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians buy homes. The biggest benefit of the Good Neighbor Next Door Program is the 50% discount of the home’s list price. The only catch is that the home owner must commit to live in the property for 36 months as their sole residence.
To learn more about the Good Neighbor Next Door Program, click here.
The Section 184 Indian Home Loan Guarantee Program is a mortgage for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. In 1992 Congress created this program to help Native American Communities with homeownership.
Section 184 loans helps borrowers buy homes with a low down payment and flexible underwriting. Moreover, the loan does not need to be used only on properties on native lands. Purchase of an existing home for single-family residences. Also allowed are new construction, rehabilitation, and refinance.
To learn more about Section 184, click here.
Missouri Housing Agencies
Missouri housing agencies are your best resource for down payment assistance programs. Through funding from HUD, the purpose of these agencies is to ensure that affordable housing is available for everyone.