Missouri first-time homebuyer grants and down payment assistance (2026)

Two MHDC loans, one 4% second mortgage

Each program comes in two versions. The DPA version gives you a second loan equal to 4% of the first mortgage for the down payment and closing costs. The non-DPA version skips the second loan in exchange for a rate typically 0.25 to 0.50 point lower ⁠²⁠³. Eligible first loans are 30-year FHA, VA, USDA Rural Development, Fannie Mae HFA Preferred and Freddie Mac HFA Advantage purchase loans ⁠²⁠³.

The 4% is figured on the total first loan, including FHA’s upfront mortgage insurance premium or a VA or USDA funding fee ⁠². On a $250,000 total loan, that is $10,000. It cannot pay any part of a real estate commission ⁠².

The price of the DPA is a higher rate. On MHDC’s rate notice effective Sept. 30, 2026, a First Place government loan cost 7.375% with DPA and 7.000% without. In a targeted census tract the same loan cost 5.875% with DPA and 5.500% without. Next Step government loans were 8.250% with DPA and 7.500% without. Rates change without notice ⁠⁸.

Who counts as a first-time buyer under First Place

First Place is limited to first-time buyers and qualified veterans. Under the manual revised Oct. 5, 2026, you are a first-time buyer if, in the past three years, you have not had an ownership interest in a principal residence and have not claimed a mortgage interest or real estate tax deduction on Schedule A ⁠². Instead of tax returns, the lender checks all three credit bureau reports for recent homeownership (Form 520) ⁠².

The manual also covers these cases ⁠²:

• Rental property. Owning rental property does not disqualify you if you never lived in it during the three years and took no Schedule A deductions. The rent counts as income.
• Divorce. Missouri law treats a spouse as an owner of the other spouse’s property. If you were married within three years to someone who owned the home you lived in, you are not a first-time buyer.
• Veterans. Veterans not dishonorably discharged who have not used this exception before qualify, with a DD Form 214.
• Targeted areas. Buyers in a federally targeted census tract do not need to be first-time buyers.

Next Step has no first-time rule ⁠³.

2026 income and price caps by Missouri metro

MHDC uses one page of limits for both programs. Income limits come from HUD’s FY 2026 figures, effective May 1, 2026, and price caps from IRS Rev. Proc. 2026-23, effective May 6, 2026 ⁠⁴. Next Step uses the same, higher column as targeted areas ⁠⁴.

Scroll the table sideways to see every column.

Bates, Callaway, Moniteau, Cooper and Howard counties, and the Sullivan city part of Crawford County, are left out of the metro rows and use the “all other areas” limits ⁠⁴.

The purchase price cap is the same everywhere in Missouri: $566,354 for a one-family home and $725,146 for a two-family home under First Place. Next Step and targeted areas allow $692,211 and $886,289 ⁠⁴.

Income counts more than the borrowers. It includes a spouse who lives in the home and any other family member who will live there and be secondarily liable on the mortgage. A non-occupying co-signer’s income does not count ⁠².

Finding your area. Missouri’s targeted areas are census tracts where at least 70% of families earn 80% or less of the statewide median. As of 2026 there are no designated areas of chronic economic distress ⁠⁷. The current tract list, effective Jan. 8, 2024, covers tracts in 35 counties and St. Louis City. It includes 27 tracts in Jackson County, 22 in St. Louis City, 16 in St. Louis County and 11 in Greene County ⁠⁷. Find an address’s tract number with the FFIEC geocoder linked from MHDC’s Targeted Areas page; lenders’ system also checks it automatically ⁠²⁠⁷.

How the 4% second loan shrinks after year five

MHDC’s manual says plainly that the DPA is not grant money but a second loan, forgivable after 10 years ⁠²⁠³:

• Years 1-5: nothing is forgiven. If you sell or refinance, you repay the full 4%.
• Years 6-10: the balance drops by 1/60 each month. If you sell 7.5 years after closing, 30 of the 60 monthly reductions have passed and about half is still owed.
• After year 10: the second loan is fully forgiven, as long as you still live in the home and kept the original first loan.

MHDC will not subordinate its second loan. A refinance means paying it off, so ask the first-lien servicer for a payoff figure ⁠². You must move in within 60 days of closing and keep the home as your primary residence ⁠².

Recapture tax (First Place). Because First Place is bond-financed, you may owe a federal recapture tax. It applies only if three things happen together: you sell within nine years, you sell at a net profit, and your income that year exceeds the limit on Form 555. The tax is capped at the lesser of 6.25% of the loan’s highest principal or half the gain ⁠². Refinancing alone does not trigger it ⁠⁵. The Next Step manual has no recapture section, but MHDC’s Next Step flyer says its loans “may be subject” to recapture. Ask your lender which applies to your file ⁠³⁠⁶.

Credit, DTI and the fees MHDC lets lenders charge

Credit and DTI. The minimum FICO score is 640, or 660 for a manufactured home on a permanent foundation. On FHA, VA and USDA loans, the debt-to-income cap is 45% with a 640-679 score and 50% at 680 or higher. Conventional HFA loans allow 50% DTI at 640 ⁠². Lenders may set stricter minimums, and the master servicer, U.S. Bank, can change these rules ⁠².

Fees. MHDC caps what a Certified Lender may charge ⁠²:

• Origination fee: up to 1% of the first loan
• Application, processing or underwriting fee: up to $1,100
• Loan funding fee: $275
• Tax service fee: $84

Document preparation, commitment, technology and similar “junk” fees are banned. If a lender overcharges, MHDC requires a refund to you ⁠²⁠⁵.

Combining with other help. You may add city, county or other government DPA, but its lien must sit third, behind MHDC’s second loan. Seller-funded programs such as Nehemiah are prohibited, and so is an interest-bearing second mortgage from a for-profit company ⁠².

Homebuyer education: what MHDC does and does not require

Both Oct. 2026 manuals say MHDC does not require a homebuyer education course; lenders follow the master servicer’s rules or their own ⁠²⁠³. Your loan type may still require one. For example, Fannie Mae requires homeownership education for purchases above 95% loan-to-value when all borrowers are first-time buyers ⁠¹². City programs set their own rules: HomeSTL requires a course from its approved list of HUD-approved providers ⁠¹³⁠¹⁴.

The MCC that Missouri stopped listing in 2026

Through December 2025, MHDC’s homebuyer page listed three programs, including a Mortgage Credit Certificate ⁠¹⁰. MHDC’s November 2025 flyer set the credit at 25% stand-alone, 35% with a Next Step DPA loan, or 45% with a Next Step non-DPA loan. The credit was capped at $2,000 a year ⁠⁹. As of Oct. 20, 2026, the homebuyer page lists only First Place and Next Step ⁠¹. The Lender Resources page posts manuals for those two only ⁠¹¹, and the First Place manual bars pairing a First Place loan with an MCC ⁠². Treat the Missouri MCC as unavailable for new purchases unless MHDC announces a new round.

St. Louis and Springfield city money, and Kansas City’s gap

• St. Louis, HomeSTL. The St. Louis Development Corporation paid $40,000, or $50,000 for a home in a HUD Qualified Census Tract. It was a 0% deferred second mortgage forgiven after 5 to 10 years ⁠¹⁴. It was open to first-time buyers in the City of St. Louis at or below 80% of AMI: $63,600 for one person, $81,750 for three and $90,800 for four (HUD figures effective May 1, 2026) ⁠¹⁴. As of Oct. 20, 2026, SLDC is no longer accepting reservations because all funds were reserved on Aug. 31, 2026. The waitlist covered only closings by Sept. 30, 2026 ⁠¹³.
• Springfield, Down Payment Assistance Loan Program. Up to $9,000 with no interest and no payments, forgiven over 10 years while the home stays your primary residence. It is HUD-funded, for first-time buyers and certain displaced persons at or below 80% of Springfield’s median income. The price cap is $214,000, and the home must be inside city limits ⁠¹⁵. Get pre-qualified for a first mortgage first ⁠¹⁵.
• Kansas City. We could not confirm on an official city page a Kansas City, Missouri down payment program open to the general public on Oct. 20, 2026. Buyers in the Kansas City MSA can still use MHDC loans at the metro income limits shown above ⁠⁴.

Getting an MHDC loan through a Certified Lender

1. Pick the program

   First-time buyers and qualified veterans under the First Place income limit start there. Repeat buyers, and first-time buyers over the limit, use Next Step. Buying in a targeted tract waives the first-time rule ⁠²⁠³⁠⁷.

2. Check your limit

   Find your county’s row on MHDC’s 2026 limits page. Add up income for everyone who must be counted, not just the borrowers ⁠²⁠⁴.

3. Find a Certified Lender

   Use MHDC’s Lender Locator. Mortgage brokers and some lenders cannot offer MHDC loans ⁠⁵⁠¹¹.

4. Gather documents

   MHDC asks you to bring a list of all debts with balances and monthly payments, your employers’ names and addresses, recent pay stubs, and any divorce decree. Veterans also need a DD-214 ⁠²⁠⁶.

5. Sign a purchase contract, then lock

   The lender can lock an MHDC rate only after both buyer and seller have signed the contract. The loan must close and be submitted within 60 days of the lock ⁠².

6. Complete any required course

   Ask your lender whether your loan type or a layered city program needs a certificate ⁠²⁠¹².

7. Close and keep the papers

   Keep the second-loan note and, for First Place, Form 555, the Notice of Potential Recapture Tax. You will need both if you sell or refinance within 10 years ⁠².

Funds are reserved first come, first served ⁠⁶. If one lender declines you, try another Certified Lender. MHDC takes program questions at [email protected] ⁠². Other states’ programs are compared on the first-time homebuyer grants page, and other Missouri help is on the Missouri page.