First Time Home Buyer Loans Missouri

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The state of Missouri offers programs to assist first-time homebuyers in realizing their dream of becoming homeowners. For first-time homebuyers, the Missouri Housing Development Commission (MHDC) offers mortgage programs with and without down payment assistance. If you haven’t owned your primary residence for three years, you may be eligible to qualify as a first-time buyer.

Veterans, active military members, and people purchasing homes in economically underprivileged areas are exempt from the first-time home buyer requirements.

National first-time home buyer programs

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that is not federally guaranteed or insured. For first-time buyers or those with lower incomes, conventional mortgages that meet Fannie Mae and Freddie Mac requirements allow down payments as low as 3%. Conventional loans, as opposed to FHA loans, enable borrowers to eventually cancel their mortgage insurance or avoid it entirely if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U. S. The Department of Veterans Affairs aids in the purchase of homes by service members, veterans, and surviving spouses. In addition to offering competitive interest rates and frequently requiring no down payment or mortgage insurance, VA loans are particularly forgiving. Although there isn’t a set minimum, most lenders who work with the VA demand scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

For many first-time homebuyers with low credit scores, this is the go-to program. The Federal Housing Administration accepts only three percent as a down payment. 5% for those with credit scores of 580 or higher. Although the FHA will insure loans for borrowers with credit scores as low as 500, a score that low requires a 10% down payment. An FHA loan must have mortgage insurance, which cannot be cancelled, for the duration of the loan.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a mortgage that requires no down payment for qualified rural and suburban home buyers. USDA loans are issued by the U. S. Through the USDA Rural Development Guaranteed Housing Loan Program, the Department of Agriculture There are income limitations, which vary by region. Application processing is expedited for those with credit scores of 640 or higher. Those with lower scores must adhere to stricter underwriting requirements.

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MHDC highlights and eligibility requirements

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

Best for:

Low mortgage rates, down payment assistance

What you need to know:

There are two versions of the First Place loan program: one with down payment assistance and one without. For first-time homebuyers, the program without down payment assistance offers mortgages at below-market interest rates. The interest rates on First Place loans with cash assistance are typically between a quarter and fifty basis points lower. The rate was three-quarters of a percentage point lower in a recent check-in.

First Place Loan Program With Cash Assistance

Best for:

Down payment assistance, closing cost assistance

What you need to know:

First-time home buyers who meet the income requirements are eligible for the First Place cash assistance loan. It offers 4% of the loan amount in down payment assistance, which can be used to pay the down payment and closing costs. The assistance is a forgivable second mortgage without monthly payments. If the borrower continues to make payments and the property remains their primary residence after ten years, this second mortgage is forgiven. Following the initial five years, 1/60th of the loan is forgiven each month for the following five years.

Next Step

Best for:

What you need to know:

The Next Step program is primarily for homebuyers who make too much money to qualify for First Place loans or who pay more for their homes than what is required for First Place loans. The income and purchase price restrictions for Next Step are higher than those for First Place. Additionally, both first-time and repeat homebuyers can use Next Step.

Next Step Cash Assistance Loan

Best for:

Low mortgage rates, down payment assistance, closing cost assistance

What you need to know:

If a buyer of a home receives a Next Step loan, they are not required to receive down payment assistance. However, borrowers do have the choice to accept 4% of the loan amount in assistance, which can be used to lower down payments and closing costs. The down payment assistance is provided through a second mortgage without monthly payments, similar to the First Place program with cash assistance. If the borrower maintains the loan and uses the property as their primary residence after ten years, it is forgiven. After the initial five years, each month for the following five years, one-sixth of the loan is forgiven.

Mortgage Credit Certificate

Best for:

What you need to know:

Mortgage credit certificates are available from the MHDC for first-time homebuyers who meet the required income thresholds. An annual credit of up to $2,000 is available to borrowers against their federal income taxes. Income and purchase price limits apply.

Your next step

Visit the MHDCs 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.

NASB: NMLS#400039	New American Funding: NMLS#6606	AmeriSave: NMLS#1168
NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.	NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.	NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.
Learn More	Learn More	Learn More
Min. Credit Score 620	Min. Credit Score 620	Min. Credit Score 620
Min. down payment 3%	Min. down payment 3%	Min. down payment 3%

FAQ

Does Missouri have a first-time homebuyer program?

The First Place Loan from the Missouri Housing Development Commission (MHDC) is for first-time homebuyers and veterans who haven’t owned a home in the previous three years. The program offers a competitive fixed rate that is frequently below the market and is applicable to conventional, FHA, VA, or USDA loans.

What credit score do you need to buy a house in Missouri?

You must have a credit score of at least 620 in order to be approved for a conventional mortgage and purchase a home in Missouri. You might still be eligible for an FHA loan even if your credit score is lower than that.

Which loan is best for first-time home buyers?

FHA loans are great for first-time homebuyers because you can put down as little as three percent of the purchase price in addition to paying lower upfront loan costs and having fewer credit requirements. 5%. 4 FHA loans cannot exceed the statutory limits described above.

How do I buy a house with no money down in Missouri?

USDA mortgages For qualified buyers in rural and suburban areas, a USDA mortgage requires no down payment. USDA loans are issued by the U. S. Through the USDA Rural Development Guaranteed Housing Loan Program, the Department of Agriculture