MISSOURI FIRST TIME HOME BUYER
and DOWN PAYMENT ASSISTANCE
You have discovered the best resource for learning everything that is available to you in our State of Missouri for down payment assistance, first time home buyer programs, subsidized interest rates, zero down payment mortgage programs, low down payment programs and more!
Take the 2 Minute Pre-Qualification at the End!
DID YOU KNOW THAT THERE ARE OVER 60
DOWN PAYMENT ASSISTANCE PROGRAMS AVAILABLE IN THE STATE OF MISSOURI!
My name is Bob Rutledge, I have been a Mortgage Loan Officer for over 25 years, I live and work in Missouri and I have dedicated this website and my business to helping First Time Home Buyers and other home buyers to purchase a new home with less money out of their pockets. My hopes are that you will be educated to what is available to you, that you will ask questions, and that I can possibly go to work for you. There is a lot of information here for you and it will save you a lot of money!
FIRST TIME HOME BUYER MORTGAGE PROGRAMS
There are many mortgage programs that work very well with first time home buyers and when combined with down payment assistance they can provide many with exactly what is needed to get a new home buyer into a new home with less money and a great interest rate.
FHA: the Grandfather of Mortgage Programs, this mortgage program has been around since the Great Depression and was formulated to help people get a mortgage for a new home that banks would not. The FHA mortgage only requires a down payment of 3.5% and works very well with down payment assistance programs. If you can provide your own down payment it is very possible to be approved for a FHA mortgage with a middle credit score as low as 580 or higher. The FHA mortgage is more tolerant of higher debt to income borrowers and has easier underwriting guidelines than any of the other mortgage programs designed for first time home buyers. The FHA mortgage combines very well with down payment assistance programs, a credit score of 620 or higher is generally needed to combine FHA with a DPA Program. Because FHA will allow for a 6% seller concession to help home buyers with their closing costs the FHA mortgage becomes very affordable for many home buyers.
Home Possible and Home Ready, the two sides of conventional mortgages, Fannie Mae and Freddie Mac are now in competition with the FHA low down payment mortgage program, these home buyer programs are great for the higher credit score home buyer. Fannie Mae provides the Home Ready mortgage program and Freddie Mac provides the Home Possible program. Both of these programs allow for a 3% down payment and reduce mortgage insurance, the Freddie Mac Home Possible program has a no mortgage insurance options that helps to reduce your monthly payment. At times both of these mortgage programs can be combined with many down payment assistance programs. The interest rates on these program are very attractive and at times are lower than a conventional mortgage with larger down payments. The program is designed for lower income home buyers with income limits capped at 80% of the median income for the area your home will be located, credit score requirements are set at 640 or higher, and the debt to income ratio is recommended to be at 45% of you gross monthly income. If you are a home buyer with good or better credit and can provide your own down payment these are a great program.
USDA, this program is sometimes known as a Rural Development Mortgage, and is for low to moderate income households to purchase a home in rural areas outside of the more populated metro areas of Missouri. The USDA mortgage program provides 100% mortgages, no down payment, to qualified home buyers. I use this program a lot with home buyers who want to purchase a new home with little to zero money out of their pockets. With a no down payment requirement and multiple ways to help the home buyer with closing costs this program is my #2 favorite mortgage program. The USDA mortgage program generally requires a 640 or higher credit score but at times can be manually underwritten to a 620 or higher credit score. The debt to income ratio is a bit lower than most programs but exceptions to those guidelines are generally extended to well qualified home buyers. If you are looking to purchase a home outside the city limits and want to purchase a home with little to no money out of your funds, this is a great mortgage program.
VA, a mortgage program for those who have served in the United States Military and are eligible for this benefit through the Veterans Administration, this is my #1 favorite mortgage program because it serves the home buyer better than any mortgage program! The VA mortgage program has no credit score or debt to income requirement. There is no required minimum down payment until you get in the Jumbo price range or exceed your benefit. Qualifying for the VA mortgage can be quite easy, but the guidelines do assure the home buyer they are well qualified to own a home. You will need your DD214 and your Certificate of Eligibility for a VA mortgage. If you are a Veteran and are eligible for this great mortgage program, Thank You, and Congrats!
MISSOURI DOWN PAYMENT ASSISTANCE PROGRAMS
Did I mention that there are over 60 Down Payment Assistance programs available in and throughout the State of Missouri? Would you like to know what DPA programs are available to you?
If you are considering down payment assistance as a means to help you purchase a new home you need a Mortgage Lender that knows the programs, the good and the bad of the programs. Do you have to pay back the money? How do the programs work? DPA vs. Self Funded? Is DPA available to move up home buyers? What type of homes are eligible for down payment help? What are the interest rates? Can I refinance after I close? How do home buyers get down payment assistance? You need an experienced DPA Guide to wade through all your options. Not all lenders provide down payment assistance programs and not all lenders want to provide down payment assistance.
The top Down Payment Assistance program offer by the State of Missouri and is available all through our state. The Missouri Department of Housing Development or MHDC has multiple DPA programs and it can be very complicated, the training manual for lenders is 144 pages!
There are two MHDC First Time Home Buyer Programs, the Cash Assistance Loan (CAL) provides cash assistance up to 4% of the first mortgage to first time home buyers for down payment and closing costs. The Non-Cash Assistance Loan (Non-Cal) provides a MUCH lower interest rate to first time home buyers who do not need down payment and closing cost assistance.
The Cash Assistance Program provides qualified first time home buyers a 4% second mortgage of the loan amount to be used for down payment and/or closing costs. The second mortgage is a 10 year repayable cash assistance, the first 5 years you will pay back all the funds provided to you if you refinance or sell your home. After the first 5 years the amount you would owe if you sell or refinance diminishes every month by 1/60th of the about owed until it is gone. The second mortgage has no required monthly payment and no interest accrues on the second mortgage. BONUS: MHDC dictates exact closing costs to lenders, title companies, and real estate agents, NO JUNK FEES ALLOWED you and everyone that closes with an MHDC program is charged the by the same standards of the program.
The Non-Cash Assistance Loan provides first time home buyers who do not need down payment and/or closing costs help a significantly lower interest rate that can be applied to your FHA, Conventional, VA, or USDA mortgage. These interest rates are well below what the mortgage marketplace is generally providing to home buyers. These interest rates always well below the interest rates than provided for those those who use the CAL program. I use the NON CAL subsidized interest rates to help home buyers afford more home because of the significantly lower interest rate. Keep in mind, this portion of the MHDC program does not provide down payment and/or closing cost assistance. BONUS: NO JUNK FEES ALLOWED, MHDC will dictate closing costs with this program as well.
Qualifying for the MHDC Down Payment Assistance Program must be provided by an MHDC approved lender. The program requires a 640 or higher middle credit score for all borrowers. The program is designated for moderate or lower income households, though in some areas that income limit is over $100,000 annual income, household income is determined by family size and location of the house. The debt to income ratio for this program is a strict 45%, no exceptions. You do not have to be a first time home buyer but there are more options available if you are a first time home buyer. The properties financed can be single?family
detached homes, one?half duplex, semi?detached
homes, condominiums, townhomes, or
manufactured homes on a permanent
foundation. Duplexes are eligible, provided one
unit is owner?occupied and the units are at least
five years old.
IS THERE MORE DOWN PAYMENT ASSISTANCE?
Yes, there is quite a bit left! There are many local municipality, county, and regional provided down payment assistance programs, as I mentioned there are over 60 DPA programs and MHDC only offers a portion of what you could be eligible for. Click the down payment assistance button below you can find what DPA is available to you in the area you are considering for your new home.
WHAT ABOUT MORTGAGE CLOSING COSTS?
Down payment is what most home buyers are saving for when they are wanting to purchase a new home but what many miss is that there are going to be closing costs associated with purchasing that new home and the mortgage you will need. There are lender fees and costs that are part of your closing costs, plus title fees, inspections, home owner's insurance, setting up your escrow account to pay for taxes and insurances, the cost of the appraisal, per diem interest, and a few more items that will make up your total closing costs. Depending on the mortgage program, if there is down payment assistance, and the loan size closing costs could range from 3 to 6 percent of the sales price of your new home! Of course you can save for the closing costs, but there are other ways to have those closing costs paid for you.
All mortgage programs allow for what is referred to as seller concessions to help a home buyer with the payment of their closing costs, these seller concessions are negotiated by you or your real estate agent during the time you are providing an offer on the home. It is very common, even in a seller market, in Missouri for sellers to provide seller concessions to a home buyer. FHA, VA, and USDA will allow up to 6% of the sales price for a seller concession and all conventional mortgage programs will allow up to a 3% seller concession. Keep in mind that the seller concession can only be used for your closing costs and nothing else.
As you mortgage lender we can provide a lender credit that will help you with reducing your closing costs, the amount that a lender can provide you in a lender credit is not as much as you would get with a seller concession. the most I have every provided to a home buyer was a 2% lender credit to help with closing costs. Lenders provide a lender credit through offering a higher interest rate to you and using the premium they receive to be provided to you at the time of closing. In a time when interest rates are very low using a lender credit becomes very useful. I will mention here that with some down payment assistance programs a lender credit is impossible to provide due to the guidelines of the DPA program.
There is one mortgage program that will allow you to roll in the closing costs into your mortgage, the USDA Rural Development mortgage program. If you house appraises for higher than the asking price it becomes very possible to use that additional value in your home to increase the loan amount to pay for some if not all of your closing costs.
When it is possible a combination of seller concession and lender credit has served many home buyers very well to reduce or pay for all closing costs for you as the home buyer.
WOULD YOU LIKE TO KNOW HOW TO BUY A NEW HOME
WITH ZERO MONEY OUT OF POCKET?
I specialized in helping new home buyers purchase their next new home with little to no money out of their pockets. Why do I specialize in little to no money out of pocket home purchases? Because in many instances new home buyers purchase a new home and use up all or a large portion of their savings and resources when there are better alternatives. Having some or all of those saved funds available not for the new home purchase but for the new home after closing can make a big difference for many home buyers. I read a recent report that stated that the average home buyer will spend $8,000 to $10,000 within the first year of purchasing a new home. I know that is why, per Housing Wire, that the biggest regret of new homeowners is that they don't have enough savings after closing because it all went to down payment and closing costs. I try to help alleviate that regret!
Learn more about the Missouri ZERO Program
I AM A FIRST TIME HOME BUYER AND DOWN PAYMENT ASSISTANCE SPECIALIST I CAN HELP YOU PURCHASE A NEW HOME WITH LITTLE TO NOTHING OUT OF YOUR POCKET!
Hi, I am Bob Rutledge with New American Funding a progressive and customer oriented Mortgage Company. I have been a Mortgage Loan Officer for over 2 Decades, I have closed 1000s of mortgage, I also have experience as a Mortgage Underwriter. I specialize in First Time Home Buyer Programs, Renovation and Construction Mortgages, and knowing the best mortgage options, programs and guidelines to provide the best to my clients. I concentrate on making more options available to home buyers! When we work together you will find that I answer all questions, sometimes before they are asked. I prefer to be available to you as much as my family and life will allow, I am accessible to you via my cell, text, or email, or you can come and visit at my office. You will never wonder if I left you.
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