St. Louis Mortgage Help

What is down payment assistance for home buyers?

Down payment assistance programs are programs that provide financial aid to home buyers who are struggling to save enough money for a down payment to purchase a home. These programs may be offered by state or local governments, non-profit organizations, or other groups. They can take the form of grants, low-interest loans, or a combination of both. Eligibility for these programs can vary, and may be based on factors such as income, location, or first-time home buyer status. In some cases, home buyers may be required to complete a homebuyer education course or meet other requirements in order to qualify. Some program also have income limit requirement to be eligible, it's important to check the specifics of the program you are looking into.

Why a home buyer may choose down payment help?

  1. Lack of savings: Saving for a down payment can be difficult, especially for first-time home buyers or those with low-to-moderate incomes. Down payment assistance can help bridge the gap and make it possible for a home buyer to purchase a home even if they don't have a large amount of savings.
  2. Lowering the costs of homeownership: By reducing the amount of money that a home buyer needs to save for a down payment, down payment assistance programs can lower the overall cost of homeownership. This can make it more affordable for a home buyer to purchase a home and can help to reduce the burden of mortgage payments.
  3. Increasing access to homeownership: Down payment assistance can help to increase access to homeownership for individuals who might not otherwise be able to purchase a home. This is particularly important for low-to-moderate income households, who are often the most in need of affordable housing.
  4. Building equity: By helping a home buyer to purchase a home with a smaller down payment, down payment assistance can help to build equity more quickly. This is important as it will give a better leverage to the home buyer in case of any financial hardship in future

Overall, down payment assistance can make homeownership more affordable and accessible for people who might not be able to purchase a home without assistance. It's important to check if there's any program available in your area and what is the requirements to be eligible for it.

It is also important to note that not every program will be suitable for everyone and it's important to consult with a professional and compare the different options before making a decision.

Who offers Down Payment Assistance in near me?

There are several ways to find and apply for down payment assistance programs:

  1. Contact a local housing authority or non-profit organization: Many state and local governments, as well as non-profit organizations, offer down payment assistance programs. Contacting a local housing authority or non-profit organization that specializes in homeownership assistance can provide you with information about programs available in your area.
  2. Check with your lender: Some lenders may offer down payment assistance programs or have information about programs available in your area. If you are going to want to consider down payment assistance these programs are tied along with your mortgage. It is your lender then who will need to be consulted.
  3. Look online: Many down payment assistance programs have information available on their websites. You can also search for programs by state or zip code on websites such as the U.S. Department of Housing and Urban Development (HUD) or the Federal Housing Administration (FHA).
  4. Consulting with a housing counselor: HUD-approved housing counselors can provide you with free or low-cost advice on buying a home, and can help you find down payment assistance programs that may be available to you.

When you find the program you are interested in, make sure you thoroughly read the eligibility requirements and understand the application process. You also want to check if the program is still active, funded and/or open to new applicant as some program have limited fund and open on specific time window. This is when an experienced and knowledgeable mortgage loan officer will pay dividends.

It's also important to keep in mind that some down payment assistance programs have income limits, and you may need to meet certain requirements such as completing a homebuyer education course, or having a certain credit score, it's important to check the specifics of the program you are looking into.

Down payment assistance can help buying a home more affordable

Down payment assistance can make buying a home more affordable by helping to reduce the amount of money that a home buyer needs to save for a down payment. By providing assistance with the down payment, these programs can help home buyers purchase a home that they may not have been able to afford otherwise.

Down payment assistance can make buying a home more affordable in several ways:

  1. Lowering the down payment: One of the main ways down payment assistance makes buying a home more affordable is by lowering the amount of money a home buyer needs to come up with for a down payment. This can make it easier for home buyers to save enough money for a down payment and can also help them qualify for a larger loan.
  2. Closing costs: Some down payment assistance programs also provide assistance with closing costs. These are the fees and expenses associated with buying a home, such as appraisal fees, title insurance and attorney fees. By helping with these costs, the down payment assistance can further reduce the amount of money the home buyer needs to come up with at closing.
  3. Lowering monthly payments: Down payment assistance programs that offer low-interest loans can help reduce the home buyer's monthly mortgage payment. This can make it easier for home buyers to afford the monthly payments and make homeownership more sustainable.
  4. Special loan programs: Some down payment assistance program work with special loan programs, such as FHA or VA loan, that are backed by government and have more lenient requirements for first-time buyers, such as lower credit score or lower down payment. This could help more buyers to qualify for the loan, and make homeownership more affordable.
  5. Grant program: Some down payment assistance programs offer grant that doesn't need to be repaid, this can help to reduce the overall cost of purchasing a home, and make it more affordable.

In general, down payment assistance can help home buyers bridge the gap between what they can afford and the cost of buying a home. It can also make homeownership more sustainable by reducing monthly payments, closing costs and overall costs of purchasing a home. However, it's important to check if there's any program available in your area, and what are the requirements to be eligible for it before starting the process.

State of Missouri Down Payment Assistance - MHDC

The Missouri Housing Development Commission (MHDC) is a state agency that works to create affordable housing opportunities for Missouri residents. They offer a variety of programs to help first-time homebuyers, move up home buyers, and low- to moderate-income families purchase a home. Some of the programs offered by the MHDC include:

First Place: This program provides down payment and closing cost assistance for first-time homebuyers, and offers competitive interest rates and reduced mortgage insurance requirements. There is a Cash Assistance portion of this program that will provide up to 4% of your loan amount to be used for your down payment and/or closing costs. There is a non-cash assistance portion that will provide a lower than market interest rate when you provide your own down payment.

Next Step: This program was built for move up home buyers AND first time home buyers that have higher income levels than what the First Place guidelines allow. Next Step  provides down payment and closing cost assistance, and offers competitive interest rates and reduced mortgage insurance requirements. There is a Cash Assistance portion of this program that will provide up to 4% of your loan amount to be used for your down payment and/or closing costs. There is a non-cash assistance portion that will provide a lower than market interest rate when you provide your own down payment.

MCC: The Missouri Homeownership Preservation (MHP) Tax Credit program, also known as the Missouri Homeownership Opportunity (MCC) program, provides a tax credit to first-time homebuyers who purchase a home within the state of Missouri and meet certain income requirements.

Minimum required credit score for MHDC is 640 or higher.

There are income limits for each program depending on household size and area.

Limited to primary residences only, single family, 2 family, condos, and manufactured homes. 

Purchase price limits.

Cash assistance will be in the form of a second mortgage. The second mortgage will be forgiven if the borrower stays in the home/loan for ten years. The second mortgage will diminish after year five by 1/60 every month until year ten when it will be completely forgiven. No additional monthly payment required.

It's important to note that the MHDC program are not direct loans, but rather they are programs that work in partnership with participating and approved lenders. Not all lenders offer or provide the MHDC Down Payment Assistance programs.

Down payment assistance in the St. Louis area.

St. Louis City, St. Louis County, St. Charles County, and Jefferson County

The St. louis area is a hot bed for down payment assistance, along with having MHDC available to all home buyers in the area there is down payment assistance program operated through St. Louis County that is utilized by St. Louis City, St. Louis County, Jefferson County, and St. Charles county to provide down payment assistance for home buyers.

You will work hand in hand with your lender and one of several providers of the down payment assistance. The providers are, Beyond Housing, Better Family Life, The Housing Partnership, or NECAC. 

  • Must be a first-time homeowner, except in St. Charles County.
  • Must complete the Homebuyer Education Program and one-on-one counseling, resulting in a “Homeownership Ready” status. 
  • Must be at or below maximum gross household income limits, determine by household size.
  • Must have secured a fixed-rate mortgage on the purchased home.
  • Home must pass first-time homebuyer inspection.
  • Sales Price Limits apply
  • Assistance provided is a zero percent interest and 5-year forgivable loan with no monthly payment required.

Available Down Payment Assistance Per Household: (as of this writing)

  • St. Louis City Down Payment Assistance $3500
  • St. Louis County Down Payment Assistance $6000
  • City of Florissant Down Payment Assistance $5,000
  • St. Charles County Down Payment Assistance $10,000
  • City of O'Fallon Down Payment Assistance $10,000
  • Jefferson County Down Payment Assistance $5,000

Note: It is possible to stack this Down Payment Assistance Program on top of MHDC to provide a larger down payment for your new home. 

Down Payment Assistance in and around Kansas City, Springfield, Columbia, and other areas of Missouri

The other areas of Missouri do not have the wealth of down payment assistance programs as in the St. Louis Area. There will always be available the First Place and Next Step Down Payment Assistance offered through MHDC. There are some smattering of local down payment assistance programs available in Columbia, Blue Springs, Independence and in the Springfield area but many times these programs are lacking funds, come and go, or the MHDC program is the best available. 

In-House Down Payment Assistance Programs 

CHENOA Down Payment Assistance

Some lenders have their own in-house down payment assistance, many do not have down payment assistance program at all. One of the better in-house programs is offered through the CHENOA Down Payment Assistance program.

The Chenoa Fund Down Payment Assistance Program (DPA) is a second mortgage loan for eligible borrowers who meet income, purchase price and other program guidelines, as established by HUD and the Chenoa Fund. The DPA is intended to assist borrowers who lack the funds necessary to make a conventional down payment. The Chenoa Fund DPA is available to first-time homebuyers and repeat homebuyers who meet certain income and purchase price limits. The program is offered through participating lenders, and borrowers are required to complete a homebuyer education course as a condition of program eligibility.

The Chenoa Fund Down Payment Assistance Program has certain rules and guidelines that borrowers must meet in order to be eligible for the program. Some of these include:

  1. Purchase price limits: The purchase price of the home must fall within certain limits, as established by the program.

  2. Income Limits

  3. First Time Home Buyer or Repeat Home Buyer

  4. Primary Residence Only

  5. Minimum of 600 Credit Score for all borrowers

  6. Home Buyer Education may be required

  7. Single Family, Condo, Manufactured, or townhouse

It's important to note that these rules and guidelines may vary depending on the specific program and the participating lender, so it's a good idea to check with a participating lender for the most up-to-date information.

Bob Rutledge Mortgage Loan Officer and Down Payment Assistance Expert.

I have have been a mortgage loan office since 1995 and I specialize in helping home buyers with down payment assistance, purchasing a new home with little to no money out of pocket, and making that next home purchase more affordable.

I would welcome the opportunity of speaking with you to answer all your questions, feel free to email me at or if you would like to set up an appointment follow this link LET'S TALK.

If you would like to take about 3 minutes of your time to fill out my Down Payment Assistance Pre-Qualification I will gladly respond within 1 to 2 business days with a complete analysis of what down payment assistance programs are available to you, what mortgage programs are best for what you want, and how to make it all work for you. Click on this link GET DPA and I will have answers to you very soon.


Jefferson County


City of Florissant


St. Louis County


St. Charles County*


City of O’Fallon


Jefferson County


City of Florissant


St. Louis County


St. Charles County*


City of O’Fallon


Posted by Bob Rutledge on January 17th, 2023 1:49 PM




In the St. Charles area there are Multiple Down Payment Assistance Programs available to First Time Home Buyers as well as Home Buyers in general. Did you know that if you have not own a home in the last 3 years you are again a First Time Home Buyer?

Complete the Down Payment Assistance Finder

There are local down payment programs that help provide funds to home buyers purchasing in a specific city, St. Charles City, O'Fallon, Wentzville, St. Peters, Dardenne Prairie, St. Paul, Cottleville, Lake St. Louis, and Weldon Springs. The amount can vary from $5,000 to $10,000 in down payment assistance.

Within Unincorporated St. Charles County there is a program to help home buyers with their down payment too! The program is currently provided up to $10,000 in help!

All of the City and County programs are for low to moderate income families, meaning if you make too much income you may not qualify. You do have to be able to qualify for a mortgage as well. 

The funds provided through these programs offer market interest rates, you have to be a first time home buyer, you must attend or participate in a home buyer education course, as well as complete a one on one counseling session, and you will have to have at least $1,000 of your own funds invested into the property purchase. There is no required repayment of the funds provided if you stay in the house and mortgage for 5 years.

These programs have their own credit and program qualification guidelines, I can help guide you through them. The number one qualification I am asked is what credit score do I need, 620 middle score for all borrowers is required.

If you cannot qualify for the local down payment assistance the next consideration would be the State of Missouri MHDC Down Payment Assistance Programs. 

MHDC Down Payment Assistance Program has cash assistance programs call First Place and Next Step. The First Place Program is for first time home buyers where the Next Step is for First Time Home Buyers and Home Buyers in general. 

Both programs will provide 4% of the actual loan amount for down payment assistance, but the First Place Program will provide additional funds if your fall in a specific income bracket and you qualify for the 3% down payment conventional mortgage program.

The First Place Conventional Cash Assistance Program will provide you the 4% DPA funds, as well as $2500 if the household/application income falls below 50% of the median income for the area, or if the income falls between 80% to 50% of the median income for the area $1500. I can help determine your income and the median income for the area you are looking for your new home.

Not all lenders in Missouri provide the MHDC Down Payment Assistance program, a lender must be a Certified Approved Lender with MHDC, we are an approved lender with MHDC and I close a lot of MHDC loans every year.

MHDC also can provide to qualified First Time Home Buyers a Mortgage Credit Certificate or MCC. The MCC is designed to help first time home buyers qualify for a home by reducing their IRS tax liability and offsetting a portion of their mortgage interest.

If you have a tax liability with the IRS, not owe them, and we all generally have a tax liability this credit will lower that liability reducing what you would owe the IRS every year or possibly increase your IRS refund!

MHDC requires a minimum 620 middle credit score for all borrowers and a total debt to income ratio of 45% which is a little higher than the debt ratio of the local DPA programs in St. Charles. MHDC income limits will depend on the DPA Program, where you are purchasing your home, and household size and make-up. I will help guide you through the guidelines and insure you are approved.

Some lenders provide in-house down payment assistance programs, we offer several DPA programs. These are the programs we want to consider when you cannot utilize the local or state DPA programs. The qualification guidelines are a bit more expanded except for credit scores, still a minimum middle credit score of 620 or higher is required. But, income limits are broader and in some cases there are no income limits. Debt to income ratios are expended up to 50%.

There are instances where an in-house down payment assistance program is a better situation than a local or state DPA program but I prefer them as a fall back. If need be I will thoroughly provide you with the pros and cons of these programs.

If you would like to consider down payment assistance I recommend that you complete the Down Payment Assistance Finder and I will email you with details as to what DPA programs you are eligible for.

Last, if you are a near miss for the required 620 Credit Scores that each of these programs require consider the Credit Score Rescue Program. I have experienced seeing credit scores improve within 3 to 4 weeks!

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 have experience as a Mortgage Underwriter too.  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 314-913-9678, text, or email, or you can visit my website at 


Posted by Bob Rutledge on May 8th, 2019 10:52 AM

(1) Shopping for a house before a mortgage

It is so much more fun to look at homes than it is to talk about your finances with a lender. So that’s what a lot of first-time home buyers do: They visit properties before finding out how much they are able to borrow. Then, they are disappointed when they discover they were looking in the wrong price range (either too high or too low) or when they find that right home they scramble to get financing, and the mortgage is not something you want to rush or put too little of time in to. In today’s housing market you want to show home sellers you are a serious buyer and able to make a serious offer when you find that right home.

How to avoid this mistake: Talk to a mortgage professional about getting pre-qualified or even preapproved for a home loan before you start to seriously shop for a place. The pre-qualification or preapproval process involves a review of your credit, income and expenses. Having a per-qualification/pre-approval letter in hand will make your offer more competitive, and most offers today must have this letter.


(2) Not looking for first-time home buyer programs


As a first-time home buyer, you probably don’t have a ton of money saved up for the down payment and closing costs. But don’t make the error of assuming that you have to delay homeownership while saving for a huge down payment. There are plenty of low-down-payment loan programs out there.

Besides low down payment mortgage programs there is a lot of down payment assistance programs available to first time home buyers. Many times the funds that are available to you from DPA (down payment assistance) Programs will cover your entire down payment.

Even if you have saved enough for a low down payment mortgage program keeping your savings in your pocket will allow you to pay with cash for the items you need for your new home. I see too many home buyers use credit to purchase new home items, increasing your monthly credit obligations just after purchasing a new home.

Visit my website at to learn more about what is available in the State of Missouri!

How to avoid this mistake: Ask a mortgage lender about your options. You might qualify for a Veterans Administration or U.S. Department of Agriculture loan that doesn’t require a down payment. Federal Housing Administration loans have a minimum down payment of 3.5%, and some conventional loan programs allow down payments as low as 3%. Ask about down payment assistance programs as well. Do your own homework too, search for DPA programs in your area.


(3) Not hiring a buyer’s agent


Too many home buyers make this mistake! Do not make the mistake of working directly with the seller’s real estate agent, who was first hired and obligated to secure the best price and terms for the seller. Do not be persuaded that a Real Estate Agent can negotiate in all fairness to both sides, it is impossible. As a novice home buyer, you could be overmatched when negotiating with an experienced agent who’s working on the seller’s behalf.

How to avoid this mistake: Work with an exclusive buyer’s agent, who has a duty to work in your best interests. If you do not know a real estate agent, seek out referrals from your friends and family. But, if you are working with a Mortgage Lender they will know many qualified real estate agents in the area and especially an agent who will fit your needs.


(4) Using up all of your savings


If you buy a previously owned home, it almost inevitably will need an unexpected repair not long after. Maybe you’ll need to replace a water heater, repair a crack in the chimney or get rid of hidden mold.

Having money in your account after you close is one of the best situations for any home buyer. Besides the home repairs that will come, what about the small items that will be needed for your new home the moment you move in.

Using your own funds and not your credit cards will keep you from increasing your debt loan. You have a new house payment, normally at or higher than your previous rent, try not to add to your monthly debt with additional credit card purchases if you don’t have to.

Read about my ZERO PROGRAM at and how easy it is for new home buyers keep their savings in their pockets.

How to avoid this mistake: Save enough money to make a down payment, pay for closing costs and moving expenses, and take care of unexpected expenses. This is easier said than done. But you can buy a home with a down payment of much less than 20%, allowing you to conserve your savings.


(5) Ignoring a home’s flaws and drawbacks


A lot of first-time home buyers fall in love with one of the first properties they look at. They ignore the negatives of the house and its neighborhood.

But you can’t disregard the downsides forever. For example, you might think you’ll be OK with a long commute, but after a few months of spending too many hours stuck in traffic, you’ll wish you had bought a house closer to work.

How to avoid this mistake: Do two things. First, resolve to visit many of houses  before making an offer, you’ll be less likely to fall in love with the first or second or third home you look at.


Second, write a list of the attractive and the unattractive qualities of each house, and pay attention to each home’s downsides.

(6) Being indecisive


The flip side of choosing a place too quickly is acting too slowly when you find the right home. In a market with more buyers than sellers, you have to move fast.

I see this a lot when I first pre-approve a home buyer, they needed some time to think about it and made an offer two or three days after viewing a house, only to discover that another buyer had swooped in and made a successful offer. This will only happen to you after the first couple times, but by then you will know what you want in a home. If this happens to you know that it is normal and simply a part of the learning process of being a first time home buyer…..all things happen for a reason.

How to avoid this mistake: Once you look at multiple houses, and you get a feel of the market and you know what the market is like and where the prices are at, and you see something you like, don’t hesitate to make an offer, because you and 10 other people will be interested in that same property, this is today’s housing market.


(7) Overpaying for a house


First-time home buyers tend to pay more than experienced buyers would pay for the same house, according to research conducted by two economists with the Federal Housing Finance Agency. In their analysis of appraisal data from more than 1.7 million home sales, FHFA economists Jessica Shui and Shriya Murthy concluded that first-timers overpay by an average of 0.79%, which was nearly $2,200 per house, according to the data set they examined.

Shui and Murthy pointed to the inexperience of first-time home buyers. Real estate agents say newbie buyers let their emotions take over, too. First Time Home Buyers tend to overlook potential negatives and only look at the positives of a particular house. I tell me home buyers to act with their heads and not with their heart, but I know I am asking for the impossible so just use as much of one as the other.

How to avoid this mistake: Ask your agent for a competitive market analysis, a report that looks at the prices of comparable nearby homes that have been sold recently. And it helps to fully understand the real estate process, so seek out as much information as possible. If you have friend that recently went through the process or are currently seek out their advice.


(8) Skipping the home inspection


In some markets, a lot of buyers compete for a small number of properties for sale. In these strong seller’s markets, buyers are tempted to waive a home inspection. It gives them a competitive edge over smarter buyers who wouldn’t dream of forgoing an inspection before plunking down hundreds of thousands of dollars for a home.

It’s a HUGE mistake to buy a previously owned home without an inspection because there could be expensive, hidden damage that you wouldn’t spot but an inspector would.

How to avoid this mistake: Simple: NEVER EVER ALLOW THIS TO HAPPEN. Hire a licensed home inspector. Your real estate agent will gladly make a recommendation, but it’s better to hire an inspector of your own choosing who doesn’t depend on your agent for referrals. Plus, require that a home inspection contingency is included in your sales contract, your BUYER AGENT who represent you will help you get this negotiated in the sale contract.


(9) Underestimating the costs of ownership


After you buy a home, the monthly bills keep stacking up. This can come as a surprise if you’re not ready.

Keep in mind it’s not just your mortgage payment, you’re going to have the utilities bills that you did not or may not have been paying when you rented.

Renters may have been paying these kinds of bills, too. But the new home could very possibly have higher costs simply because your new home is bigger. Your house may come with entirely new bills, such as homeowner association fees.

How to avoid this mistake: Work with a real estate agent who can tell you how much the neighborhood’s property taxes and insurance typically cost. Ask to see the seller’s utility bills for the last 12 months the home was occupied so you have an idea how much they will cost after you move in. Ask for a seller disclosure for every house you are interested in, many times this will help you.


(10) Miscalculating repair and renovation costs

First-time home buyers are frequently surprised by high repair and renovation costs. Buyers can make two mistakes: First, they get a repair estimate from just one contractor, and the estimate is unrealistically low. Second, their perspective is distorted by reality TV shows that make renovations look faster, cheaper and easier than they are in the real world.


How to avoid this mistake: Assume that all repair estimates are low.

Seek more than one estimate for expensive repairs, such as roof replacements. A good real estate agent should be able to give you referrals to contractors who can give you estimates. But also seek independent referrals from friends, family and co-workers so you can compare those estimates against ones you receive from contractors your agent refers.

Consider purchasing a home in need of repairs with a renovation mortgage program that will allow you to use your mortgage to purchase your home as well as fund the repair/renovation costs all in one new home loan. Want to learn more about renovation mortgages visit my website to Learn More About Renovation Mortgages at

Posted by Bob Rutledge on April 17th, 2018 11:55 AM

Pros and Cons of a Low Down Payment


When it comes to a down payment on your home, are you aiming high or low? The down payment is the number one reason most buyers wait longer than they’d like to buy a home. In fact, many sidelined buyers have the income and qualifications to make the monthly mortgage payment, but lack the down payment.

But, there’s also a misperception about 20 percent down. In a NerdWallet study, 44 percent of Americans believe you need 20 percent or more to buy a home. The reality is that about 60 percent of homebuyers financed their purchase with a 6% or less down payment, according to the National Association of REALTORS®.

But, how low is too low for your down payment?

The fact is there are no cookie cutter mortgages — your home financing will be as unique as you. FHA is known for their low down payments for first-time homebuyers, but many conventional fixed rate loans offer lower than FHA’s 3.5% down.

What about zero down? VA loans for armed service members and qualified veterans provide a great value, including no down payment, relaxed credit requirements and no mortgage insurance. (Plus, down payment programs may help with closing costs and even an equity boost.)

In certain areas there is the USDA Mortgage that also provides a zero down payment option, low interest rates, relaxed credit guidelines, but with income restrictions depending on where and number of people to live in the new home.

Some lenders offer grants to buyers to overcome the down payment hurdle. But, according to guidelines from Fannie Mae and Freddie Mac, lenders can make contributions to a borrower’s down payment or closing costs only after the borrower has contributed a minimum 3% down payment.

“To meet that 3% threshold, the borrower can still come with funds from a relative, a government agency — such as grants from a housing finance agency — or from an employer housing program. That has not changed,” says Lisa Tibbitts, a spokeswoman for Freddie Mac.

Let’s take a look at the pros and cons of a smaller down payment.

The Pros:

You can buy a home sooner. With a lower down payment, you’re putting less down and not saving as long before you get in a home. It can help you secure a loan at today’s low rates and avoid any rent increases that may be on the horizon.

You’ll have more reserve funds on hand. When you buy a home, there are many other related costs, including home repairs and improvements. With a smaller down payment, you’ll avoid being “house poor” as soon as you leave the closing table and can enjoy using some of your hard earned dollars to make the home your own.

Down payment programs can help. Don’t overlook down payment programs as part of your home financing. These programs can help boost your down payment savings or even provide a tax credit for the life of the loan. Some programs provide affordable first mortgages with a very low down payment.


The Cons:

Your monthly payment will be larger. When you put less down, your home loan — and monthly payment — will be larger. Work with your lender to ensure you are comfortable with the monthly payment.

You may be required to pay mortgage insurance premiums. Some down payment programs may waive mortgage insurance (MI), but in most cases if your down payment is below 20 percent, you’ll be required to get MI — it helps manage risk for your lender and protect them if you fail to repay the mortgage. It’s important to note that with a conventional, fixed rate loan and borrower paid MI, you can cancel your mortgage insurance when you reach 20% equity in your home. With an FHA loan, you must continue to pay MI for the life of the loan.

Could hurt in a competitive market. Unfortunately, some sellers see smaller down payments as a negative, although it’s not necessarily true. In fact, the seller may actually earn less on the home from an all cash buyer with a lower offer. Plus, some down payment programs will fund your closing costs — something you won’t have to negotiate with the seller. Put the seller at ease by getting your financing set up early and documenting it in a letter accompanying your offer.

The bottom line? The right down payment for you depends on your situation. Weigh the overall pros and cons of a low down payment and talk with your lender, Bob Rutledge, about what is the best fit for you.

Visit to learn about low down payment options, VA and USDA zero down payment programs, and down payment assistance.

Posted by Bob Rutledge on March 5th, 2018 3:09 PM

With significant changes to the tax code taking effect this year, homeowners and prospective buyers are revising their plans to take advantage of its sweeping changes. Here’s an analysis based on information from the National Association of Realtors and NerdWalllet.

Tax Rate Reductions. Joint filers with incomes of $77,400 to $400,000, which will include most first-time buyers, will see their tax rates decline from two to four percent when they file their 2018 taxes next year.

Mortgage Interest Rate. Changes in the mortgage interest rate—lowering the cap to mortgages worth o $750,000 from 1 million and excluding interest paid on home equity loans— would affect only the wealthiest first-time buyers directly. The changes will make second homes and equity loans more expensive for first-time buyers in the future.

State and Local Taxes. The new law limits the amount of property taxes and other state and local taxes to $10,000 a year. First-time owners, as well as current owners, will lose the ability to deduct thousands of dollars that they can deduct in 2018, increasing the cost of homeownership, especially in high tax states like New York and California. In the State of Missouri most First Time Home Buyers homes will not have an annual property tax anyway near $10,000.

Student Loan Interest Deduction. Potential first-time buyers and their parents who have been burdened with student loan debt will lose the ability to deduct the interest they pay on their loans. As a result, it will cost them more to pay off their debts to reach a DTI that would qualify them for a mortgage. 

Personal Exemptions. Personal exemptions for filers and their dependents, worth $4,150 each in 2017, was eliminated in the new tax law.

Moving Expenses. Taxpayers have been able to deduct some moving expenses related to their employment, but this deduction is eliminated in the new act.

Standard Deduction. Taxpayers must decide whether to take the standard deduction or itemize their deductions. In the past, most homeowners have itemized to take advantage of the mortgage interest deduction and the deduction for state taxes, including property taxes. The new law doubles the size of the standard deduction from $6,000 to $12,000, or $24,000 on a joint return. According to Zillow’s Alexander Casey, under the current setup, roughly 44 percent of U.S. homes are worth enough for it to make sense for a homeowner to itemize their deductions and take advantage of the mortgage interest deduction. Under the new law, that proportion of homes drops to 14.4 percent. 

Impact on First-time Buyers: NAR’s research department modeled examples of homeowners as different income levels, mortgage sizes, and family sizes.  

A single first-time buyer who purchases a home costing $205,000 and takes out a 30-year fixed rate mortgage at 4% interest. She puts down 3.5 percent. Assuming she buys early in 2018, her first-year mortgage interest would total $7,856, and she would pay real property taxes of $2,050. Under the old law, her taxes for 2018 would fall by $2,098; Under the new law, her taxes would rise by $30. Moreover, the difference between renting and owning was $2,098 under the prior law but shrinks to $637 ($6,060 - $5,423), or $53 per month.

A family of five with an income of $120,000 that buys a $425,000 home with a 10 percent down payment on a 30-year fixed mortgage at a 4 percent. Under the old law, they would save $3,219 by buying. Under the new law their taxes would decline only $100, but if they had remained renters, they would receive a tax cut of almost $2,400. Under the prior law, the tax benefit of buying a home was $3,219. Under the new law, they will get a tax cut $948 ($8,999 - $8,051), a much weaker incentive to buy.


Posted by Bob Rutledge on February 14th, 2018 4:23 PM



There are two great mortgage programs that allow for a ZERO down payment, that's right zip, nada, nothing, etc. The USDA Rural Development and the VA Mortgage Program does not require a down payment along with the added value of super low interest rates in normal conditions.


The FHA Mortgage is referred by many as the first time home buyer home loan, not only because of the easier underwriting, lower required credit scores, and higher debt ratios but because of the minimum down payment requirement of only 3.5% of the sales price!


Conventional mortgages are those insured by either Fannie Mae or Freddie Mac, this is the loan program that many think requires at least a 20% down payment. For the most part conventional mortgages have a minimum down payment requirement of only 5%! Recently, Fannie Mae came out with a new mortgage program that has very relaxed underwriting guidelines that only requires a 3% down payment.


Down Payment Assitance or Grants:


In the St. Louis area including St. Charles and Jefferson County there are basically 2 down payment assistance programs available though one of the down payment assistance programs is coordinated with your mortgage lender through several different groups.


MHDC; some time referred to as First Place Loans. This program is offered through the State of Missouri and is provided throughout the state and not just the St. Louis Mo area. This program is strictly for First Time Home Buyers, a first time home buyer is basically anyone who has not owned a home or had the advantage of home ownership over the past 3 years.


This down payment assistance program can only be provided through approved mortgage lenders, not all lenders in the area want to work with the MHDC program.

This program will provide up to 4.5% of the loan amount for down payment and closing costs assistance. This makes this a very good program to work with the FHA mortgage minimum down payment requirement of 3.5% and then you have a little extra to apply to closing costs.


1st Home Program;This payment assistance is also only for first time home buyers. The program is available in St. Louis City, St. Louis County with Florissant having their own separate version of the same program, Jefferson County, and St. Charles County plus with nearly every city/entity in the county having a version of this program.

There are income restrictions, guideline restrictions,  underwriting restrictions, and more that I highly suggest that you only work with a mortgage loan officer very experienced with down payment assistance. Don't lose the money that is available to you or create delays that can happen because of lack of experience.


More Options to Help


23 Down Payment Options!  There are a lot of options listed within the FHA and Conventional mortgage underwriting guidelines that tell mortgage loan officers where home buyers can obtain their down payment.  The FHA mortgage programs lists 23 options that may be something you can do already, here are some favorites and some not so well known;

  • Savings (of course)
  • Gift (this is used a lot)
  • 401k or other retirement plan
  • Down Payment Assistance
  • Sweat Equity
  • Employer Assistance Program
  • Savings at home (mattress money)
  • A family member loan
  • Sale of personal property

These are just a few of the ideas and options available to you to help fund you down payment.

CLOSING COST HELP;  there are always closing costs involved in the process of buying and financing a new home purchase, over and above your down payment. Having those closing costs paid for by you is sometimes as much as the down payment but always a cost that can be avoided.

There are many options available to you to have most if not all of your closing costs paid for by others and not you. It takes a consolidated team effort of your, your mortgage lender, and your real estate agent to make this happen. But it is possible that through your mortgage program, down payment assistance, seller concessions, and lender credits that it can become possible to purchase a new home with little to zero out of pocket expense.



Posted by Bob Rutledge on March 29th, 2016 11:33 AM


My Favorite Blogs:

Sites That Link to This Blog:

Bob Rutledge Mortgage

Loan Officer NMLS#: 297044

New American Funding 12321 Olive Blvd, ste 150
St. Louis, MO 63141