If you're a Missouri resident you'll be happy to know there is a moderate amount of assistance to help first time home buyers purchase their first property. Programs range from down payment assistance to closing cost assistance to low-interest mortgages. Like most states, the resources for these programs come from federal grants, state funds, and private programs. If you're a first time home buyer in Missouri your real estate agent and mortgage lender should be fully informed about what's available in your state.
Missouri Housing Development Commission
In Missouri, the government entity responsible for safe and affordable housing is known as the Missouri Housing Development Commission (MHDC). This commission was established by the Legislature some years ago to fulfill a three-pronged mission aimed at maintaining the state's housing. Since their inception they have invested more than $4 billion in rehabilitation, construction, and assistance for home buying. At the present time the MHDC offers only one program for first time home buyers.
This program is known as the "First Place" Loans program, and it provides two types of loans specifically to first-time buyers who meet certain requirements. Veterans who apply for specific VA loans are also eligible to take advantage of this program. Repeat buyers and investors are automatically ineligible.
Cash Assistance Loan
The first type of loan under the First Place program is known as a cash assistance loan. This is a mortgage which essentially makes two loans to the first time home buyer. The first loan is the principal mortgage which covers the purchase price of the property. The second loan is considered a secondary mortgage and is cash assistance to be used toward down payment and closing costs.
The nice thing about the secondary loan is that it is a forgivable, five-year receding loan. That means it does not need to be paid back if the home buyer maintains the house as his primary residence for at least five years. If, for some reason, he must leave the home prematurely, the secondary loan must be paid off but there is no interest charged.
Non-Cash Assistance Loan
The second type of loan is known as the non-cash assistance loan and is designed for first time home buyers who do not need assistance with down payment or closing costs. As an incentive to use this program these loans come with a lower interest rate and lower monthly payments. Furthermore, banks are not allowed to charge any junk fees in order to increase their profits. That restriction also applies to the cash assistance loan as well.
Conditions and Requirements
Regardless of which loan program a first time home buyer chooses, there are some conditions and requirements common to both. First of all, both first time home buyer programs can be used in conjunction with a variety of standard loans including FHA, Freddie Mae, VA, and USDA Rural Development loans. Loans must be original, that is to say they cannot be refinanced or secondary mortgages. The only exception to this rule is loans that are being converted from construction to permanent status.
Income restrictions apply across the board and will include all sources of income for all residents living in the home. Income limits may be raised in targeted areas in order to facilitate ownership in areas previously suffering from natural disasters. Lastly, for the purposes of this program first time home buyers are defined as those who have never owned a home or who have not owned an interest in a principal residence anytime within the previous three years.
County and Local Programs
Missouri residents also have access to a list of county and local programs that may be administered by government agencies or private institutions. The HUD website currently lists several of these programs, although it can't be said for sure that their information is up-to-date. Nonetheless, they are listed below.
- Columbia Enterprise Development Corporation (EDC) Home Ownership Assistance Program (HOP)
- Columbia Home Investment Partnership Program (HIPP) $5000 Loan
- Columbia Home Investment Partnership Program (HIPP) Additional Assistance Loan
- Springfield West Central Neighborhood Alliance Down Payment/Closing Cost Assistance Program
- St. Louis (City & County) St. Louis Reinvestment Corporation Closing Cost Grant Assistance (CCGA)
- St. Louis (City and County) St Charles County Catholic Commission on Housing First Time Homebuyer Program (FTHP)
- St. Louis County 1st Home Down Payment and Closing Cost Loan Program (CCLP)
- St. Louis Grant Down Payment Assistance Program (DPA)
- St. Louis Homebuyers Assistance Program (HAP)
- St. Peters Home Ownership Program (HOP)
- St. Louis International Institute Saint Louis IDA Home Purchase (IDA)