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First Time Homebuyer Programs in Missouri

First Time Home Buyer Missouri Guide ➡️ | Missouri First Time Home Buyer Grants, Loans + More

Last Updated on: 31st May 2023, 07:06 am

A first time home buyer is someone who hasn’t bought a home in the past three or more years. If you’re a first time home buyer in Missouri, consider utilizing a Missouri first time home buyer program to make purchasing a home more affordable. Plenty of programs are available in Missouri, ranging from down payment assistance to home loans and closing cost assistance.

If you’re a first time home buyer, the process of getting a home loan, finding the perfect place, and getting your offer accepted can feel like an intimidating process. But working with a highly-recommended real estate agent and top-rated loan officer will help make the home-buying process in Missouri seamless and straightforward.

First Time Home Buyer Tax Credits & Down Payment Assistance in Missouri

In the state of Missouri, there is a Mortgage Credit Certificate (MCC) that is through the Missouri Housing Development Commission, which helps the borrower “directly convert a portion of the mortgage interest paid by the borrower into a non-refundable federal tax credit,” according to the online brochure. But it’s essential to note that there is a $2,000 maximum credit allowed in a year for the Missouri first time home buyer tax credit.

First Place Loan

First Place Loan is best known for having the option for a forgivable down payment as well as closing cost assistance, but they also provide plenty of affordable loan options for first time home buyers in Missouri. Some requirements are necessary when it comes to qualifying for this program. You’ll need to have a credit score of 640 and will have to move into the house within 60 days. You will also need to meet income limit requirements, stay below the 50% debt-to-income ratio, and be a first time home buyer.

Under the First Place Loan, there are two options:

  • One is a cash assistance loan. This option is where you can receive a forgivable down payment loan (up to 4%) by adding a second mortgage to your home. After ten years, the loan will be forgiven, but if you move out of the house before then, you will have to pay back what you owe. Each year after five years until the 10th year, the loan will be reduced by 1/60th.
  • The second option is a non-cash assistance loan, which is perfect for those who have the money for the downpayment and closing costs but want to reduce their overall loan interest rate.

When it comes to the property types that are eligible for the down payment and the first time homebuyer loan includes single-family houses, duplexes (minimum five years old), semi-detached houses, condos, townhouses, and manufactured homes (only ones on permanent cement foundation).

Only qualified and certified lenders can offer the First Place Loan, so Missouri created an online database that you can search by city or zip code.

The First Place Loan was created by the Missouri Housing Development Commission program, so they can help more people afford to purchase their own homes. This down payment assistance Missouri program is perfect for first time home buyers and is a beneficial tool to give people more access to real estate, helping to reduce homelessness. Plus, the First Place Loan is great for first time home buyers in Missouri with lower credit scores.

Missouri Housing Development Commission, 920 Main St #1400, Kansas City, MO 64105, (816) 759-6600

First Time Home Buyer Loans in Missouri

One of the ways to speed up the process of getting a home loan is by getting pre-approved by a bank or the lender you plan on working with, and just a reminder, a loan will need to be paid back within a set amount of time, whereas a grant does not need to be repaid.

There is a difference between preapproved and prequalified. If you are prequalified, this will give you a sense of what you’d be able to afford but not a guarantee of being approved for the loan. If you’re pre approved, you’ll come prepared with the necessary paperwork and documents, like proof of income, income-to-debt ratio, your credit score, and how much you can afford for the down payment. And if approved, the bank will give you a letter stating that you received approval up to a certain price.

It’s recommended to follow the 28/36 rule, where your Principal, Interest, Taxes, and Insurance (PITI) doesn’t go higher than 28% of your net income, and your overall total expenses aren’t above 36% of your take-home pay. Following this process allows the lender to see what you can afford.

Next Step Program

Whether you’re a first time home buyer in Missouri or a non-first-time home buyer, the Next Step Program is available to anyone that makes too much money for the First Place Program but would still benefit from the assistance for a downpayment and closing cost.

There are different options for the loan types, but you can get it through the Missouri Home Development Commission (MHDC), Conventional, Veteran, or FHA. And you can pair this program with the credit certificate program for Missouri.

This loan is forgivable after living in the house for 10 years. To qualify for the Next Step Program, you need to meet the minimum 640 credit score, be within the purchase limits based on your income, move into the house within 60 days, and be below the 50% debt-to-income ratio.

Conventional 97

You might be wondering what a Conventional 97 loan is – it’s your normal Freddie Mac and Frannie Mae home loan that is an excellent option for first time home buyers in Missouri. With this type of loan, you can borrow up to 97% of the home value, so you only have to come up with the 3% for the down payment. To qualify, you need to have a 620+ credit score.

FHA Loan

For Missouri first time home buyers, the FHA loans give you the ability to pay as low as 3.5% for the down payment while giving you a fixed rate for 15, 20, or 30 years. You will need to have a FICO (credit score) of 620 or above to qualify for this first time home buyer loan in Missouri, and you also can’t have filed for bankruptcy in the last four years, or you’ll have to wait to apply.

Veteran Home Loan

Veteran home loan programs are on a mission to help Veterans and Service members to be able to afford a home. You are not required to provide a downpayment for this home loan. Plus, you can use it throughout your life (meaning it’s not just good for one home), you’ll have lower interest rates, and no private mortgage insurance (PMI) is required.

First Time Home Buyer Programs in St. Louis

Here is a great first time home buyer program in St. Louis.

Individual Development Account Program

The Community Action Agency of St. Louis County offers a program to help individuals get prepared to become homeowners, and after completing the program, they are eligible to apply for down payment assistance (only for first time home buyers). Depending on the city, you usually can see between $3,000-$5,000, but it’s different for everyone. You are required to meet an income limit (can’t be above 80% of the median income for St. Louis County), and the loan has to be a fixed-rate mortgage.

How Much Does It Cost to Buy a House In Missouri?

In the state of Missouri, the median home price is $298,900, and on average, homes stay on the market for around 39 days. The Missouri housing market is somewhat competitive; when it comes to the most competitive areas in Missouri and the median home prices, they are the following:

  • Des Peres: $920,500
  • Glendale: $600,000
  • St Peters: $290,000
  • St George: $104,500
  • Kirkwood: $445,116
  • Arnold: $253,000
  • Barnhart: $240,000
  • Pevely: $147,500
  • St. Louis: $210,000

Buying a home for the first time is both exciting and stressful, but it’s really not as difficult as it might seem. When it comes to purchasing a piece of real estate, it’s a significant commitment and requires having a proper budget to ensure you can afford everything that comes with owning a home. In your budget, you need to consider the cost of property taxes, maintenance, closing costs, utilities, and homeowners insurance. To help ensure you can continue to afford your home, take a look at the affordability calculator.

Missouri First Time Home Buyers FAQs

What is a first time home buyers program?

A first time home buyer program in Missouri gives individuals and families the possibility to own a home when they otherwise amy not qualify for a mortgage based on their income. There are some requirements for Missouri first time home buyer programs, which include meeting the income limits, having a 620+ credit score, and meeting the individual requirements that the down payment programs or loan programs require. If you receive a grant, you don’t have to repay anything, but for a loan, you will need to pay it back.

What programs are available for first time home buyers in Missouri?

A few of the first time home buyer programs in MO are First Place Loan, Next Step Program, Conventional 97, FHA, Veterans Home Loan, and the Individual Development Account Program.

Are first time home buyer programs worth it?

At the end of the day, Missouri’s first time home buyer programs are worth it because it allows more families and individuals to be home owners.

Are you interested in purchasing a home in the state of Missouri? Federal Companies is an award-winning moving company with 107+ years of experience, 5 locations, 200,000+ customers served, and 200+ highly trained employees. Once you have the home and are ready to move in, we are here to help make your transition seamless. Our highly-recommended, reliable, professional, and trustworthy crew members will be there for you every step of the way! Call us today at 800-747-4100 for a free estimate!


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