First-Time Homebuyer Programs in Missouri

The down payment on a new home often presents the biggest hurdle for first-time homebuyers. In Missouri, where the average home value is $247,482, a down payment of $49,496 is needed to avoid private mortgage insurance.

Fortunately, there are first-time homebuyer programs available in Missouri to help you achieve homeownership. Additionally, some mortgages allow first-time homebuyers to put less down on a home, though these typically have income requirements and require mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

Missouri First-Time Homebuyer Programs

Missouri offers grants and loans to help first-time homebuyers cover both down payment and closing costs. We compiled the first-time homebuyer programs Missouri Housing Development Commission (MHDC) offers to help you find the best option for your particular needs and situation.

First Place Program

The First Place Program from MHDC provides affordable mortgage financing for first-time homebuyers or qualified veterans with interest rates lower than typical market rates. It also offers a forgivable second loan for down payment and closing costs, up to 4% of the total mortgage amount. This second loan is 100% forgivable after 10 years if the borrower maintains the mortgage and continues occupying the home. The program supports FHA, VA, USDA and conventional loans, but refinanced mortgage loans are not eligible.

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ELIGIBILITY REQUIREMENTS

To qualify for the First Place Program, you must meet specific eligibility requirements:

  • Applicants must be first-time homebuyers or qualified veterans
  • A minimum credit score of 640, with a debt-to-income ratio of 45% or less
  • Higher debt-to-income ratios, up to 50%, are allowed for FHA and government-sponsored loans if the applicant has a minimum credit score of 680
  • Household income must fall within the established limits for the area
  • The property must be an eligible primary residence within Missouri, and the purchase price cannot exceed the program limits
  • Next Step Program

    The Next Step Program is designed for both first-time and repeat homebuyers who exceed the income limits of the First Place Program. It offers higher income and purchase price limits, making it a good option for buyers with higher earnings. The program provides a 30-year fixed-rate mortgage and offers up to 4% of the loan amount in forgivable down payment assistance. This second loan is forgivable over a 10-year period if the borrower stays in the home. Homebuyers with sufficient savings can opt for a lower interest rate without down payment assistance, reducing monthly mortgage payments.

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    ELIGIBILITY REQUIREMENTS

    To qualify for the Next Step Program in Missouri, you must meet specific eligibility requirements:

    • Applicants must be first-time or repeat homebuyers who exceed the First Place Program income limits
    • A minimum credit score of 640, with a debt-to-income ratio of 45% or less
    • Debt-to-income ratios up to 50% are allowed for FHA and government-sponsored loans with a minimum credit score of 680
    • Household income must fall within the established limits for the area
    • Eligible properties must meet purchase price limits and be used as the borrower’s primary residence.

    Missouri Mortgage Credit Certificate (MCC)

    With the Mortgage Credit Certificate (MCC), eligible borrowers can claim a tax credit of up to 45% of their annual mortgage interest, up to a maximum of $2,000 per year. This credit effectively reduces their tax liability, lowering the overall cost of owning a home. MCCs can be paired with the Next Step Program, providing additional savings through lower interest rates and potential down payment assistance. The credit can be applied every year as long as the borrower remains in the home and maintains the mortgage, making it a long-term benefit for qualifying buyers. This program applies to various mortgage types, including FHA, VA, USDA and conventional loans.

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    ELIGIBILITY REQUIREMENTS

    To qualify for the Missouri Mortgage Credit Certificate (MCC) program, you must meet specific eligibility requirements:

    • Applicants must be first-time homebuyers or qualified veterans
    • A minimum credit score of 640, with a debt-to-income ratio of 45% or less
    • Debt-to-income ratios up to 50% are allowed for FHA and government-sponsored loans, provided the borrower has a minimum credit score of 680
    • Household income must be within the limits established for the property location
    • Eligible properties must fall within established purchase price limits and be used as the borrower’s primary residence

    Missouri First-Time Homebuyer Programs by City

    Aside from statewide first-time homebuyer programs in Missouri, city-specific programs are available to help you pursue homeownership in a city of your choosing. Check out the table below for some of the cities in Missouri that provide first-time homebuyer programs for potential residents.

    City
    First-Time Homebuyer Program

    Blue Springs

    Blue Springs provides up to $3,000 in down payment and closing cost assistance for purchasing a residential housing unit within the city corporate limits. To be eligible for Blue Springs' First Time Home Buyer (FTHB) program, your annual household income must be at or below 80% of the median income adjusted for household size in Jackson County, as determined by the U.S. Department of Housing and Urban Development.

    Springfield

    Springfield offers down payment and closing cost assistance of up to $9,000 for first-time homebuyers or certain displaced persons purchasing their primary residence in the city. The assistance is available in the form of a deferred loan with no interest and no monthly payments, forgiven over a ten-year period as long as it remains the borrower's primary residence. Qualifications include meeting purchase price limits and prequalifying for a qualified first mortgage from a participating lender.

    St. Louis

    The HomeSTL Homebuyer Assistance Program in St. Louis provides homebuyer assistance in the form of a forgivable loan with 0% interest and no monthly payments for up to 15 years. The loan funds can be used for closing costs, down payment, permanent interest rate reduction, prepaid and/or principal reduction. To qualify, you must be a first-time homebuyer with an income at or below 80% of the area median income (AMI) purchasing a home in St. Louis.

    Zero-Down-Payment Loan Programs in Missouri

    Zero-down-payment loan programs in Missouri allow you to purchase a home without putting money down. USDA and VA loans are two government-backed options that come with no down payment.

    USDA Loans

    USDA loans are a viable option for homebuyers planning to purchase in rural areas. The U.S. Department of Agriculture issues the USDA loan through its Rural Development Guaranteed Housing Loan program. These loans cater to low-to-moderate-income individuals who aspire to own a home but may not have the means for a traditional loan.

    USDA loans offer several benefits, including no down payment requirements and competitive interest rates. They are designed to make homeownership accessible to those in eligible rural areas. The loans cover 100% of the purchase price, reducing the financial burden on the homebuyer. Additionally, the interest rates are often lower than conventional loans, making monthly payments more manageable.

    To qualify for a USDA loan, certain eligibility requirements must be met. Your property must be 2,000 square feet or below and located in a USDA-eligible rural area with a population of less than 35,000. Additionally, you must meet specific income limits, which vary by location. For instance, in Barry County, MO, the income limit for a four-person household is $57,200, while in Camden County, MO, it is $65,350. Understanding these requirements can determine if a USDA loan is the right fit for your homebuying needs.

    VA Loans

    VA loans are a financing option issued by the U.S. Department of Veterans Affairs for eligible veterans, service members, and their families. These loans help those who have served in the military purchase homes with favorable terms.

    One of the main benefits of VA loans is the no-down payment requirement, which can make homeownership more accessible. Additionally, VA loans do not require private mortgage insurance (PMI), reducing monthly costs. They also typically offer lower interest rates compared to private loans. As of November 2024, the APR for a 15-year fixed-rate VA loan in Missouri is 6.21%, while a 30-year fixed-rate loan stands at 6.36%.

    To qualify for a VA loan, you must meet specific eligibility criteria, including length of service, duty status and character of service. Additionally, you must meet certain income limits that vary by location. A valid Certificate of Eligibility (COE) is also required to apply for a VA loan.

    Low-Down-Payment Loan Programs in Missouri

    First-time homebuyers in Missouri can take advantage of low-down-payment loan programs that allow them to finance their home with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

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      Conventional Loans

      Conventional loans are popular among homebuyers due to their flexibility and lower down payment options. They come in two main types: conforming, which adheres to Freddie Mac or Fannie Mae guidelines, and non-conforming, which exceeds those limits. Depending on the lender, you can secure a mortgage with a 3% down payment. However, if you put down 20% or less, you'll need to pay private mortgage insurance. Eligibility for conventional loans requires a minimum credit score of 620 and a debt-to-income ratio of 43% or lower.

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      FHA Loans

      FHA loans help achieve homeownership by following Federal Housing Administration policies. In Missouri, the mortgage limits for 2024 are $766,550 for single-family homes and $981,500 for two-family properties. You need a minimum credit score of 500 and a 3.5% down payment to qualify for FHA loans. Keep in mind that if your down payment is less than 20%, private mortgage insurance is required.

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      FHA 203(k)

      FHA 203(k) loans combine the cost of renovations into the mortgage, making it a great option for those looking to buy and renovate a home. They come in two main types: standard and limited. You can obtain a mortgage with a 3.5% down payment. Eligibility requires a credit score between 500 and 580 and a front-end debt-to-income ratio of 31% or less. While not limited to first-time homebuyers, you can't have two FHA loans at the same time.

    FHA vs. Conventional Loan: Which Is Right for You?

    FHA loans and conventional loans are frequently compared as they are the two most common types of mortgages available. FHA loans require a minimum down payment of 3.5%, while conventional loans can require as low as 3% for first-time homebuyers. However, conventional loans typically demand higher credit scores and stricter debt-to-income ratio requirements than FHA loans.

    As of November 2024, the APR for a 15-year fixed-rate conforming loan in Missouri is 6.12%. In contrast, the APR for a 15-year fixed-rate FHA loan is 8.09%. The APRs on FHA loans can be higher due to additional fees and costs associated with borrowing money on government-backed loans.

    You can use our FHA vs. conventional loan calculator below to compare FHA and conventional mortgage programs and determine the best option for you.

    FHA vs. Conventional Loan Calculator

    Compare FHA and conventional mortgage programs to better understand your loan opportunities in Missouri.

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    Financial AnalysisFHAConventionalDifference
    Monthly Payment (First Year)FHA$0Conventional$0Difference$0
    Upfront Costs FHA$0Conventional$0Difference$0
    Total 30-Year CostFHA$0Conventional$0Difference$0
    Total 5-Year CostFHA$0Conventional$0Difference$0
    Monthly Mortgage Insurance (First Year)FHA$0Conventional$0Difference$0
    Down PaymentFHA$0Conventional$0Difference$0
    Calculator results are rounded to the nearest whole dollar.
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    RECOMMENDED CREDIT SCORES FOR FIRST-TIME HOMEBUYERS

    Qualifying for first-time homebuyer programs often involves meeting minimum credit score requirements, which vary depending on the loan program. Conventional loans typically require a credit score of 620, while government-backed loans like FHA loans may accept a minimum score as low as 500.

    In Missouri, the average credit score in the third quarter of 2023 was 714, according to Experian. This suggests that many residents are well-positioned to qualify for both conventional and FHA loans. Understanding the credit score landscape can help determine your eligibility and plan your homebuying journey effectively.

    FAQ: First-Time Homebuyer Programs in Missouri

    We have answered frequently asked questions about first-time homebuyer programs in Missouri to help you find the best option and move closer to achieving homeownership.

    Does Missouri have first-time homebuyer programs?

    What qualifies me as a first-time homebuyer in Missouri?

    Can you buy a house in Missouri with no down payment?

    Who can help me with my down payment on a house in Missouri?

    Additional Resources for First-Time Homebuyers in Missouri

    Explore additional MoneyGeek resources for first-time homebuyers in Missouri to help you with the homebuying process.

    About Zachary Romeo, CBCA


    Zachary Romeo, CBCA headshot

    Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

    Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.


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