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 bob@bobrutledge.com 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.












$5,000

Jefferson County

$5,000

City of Florissant

$6,000


St. Louis County

$10,000

St. Charles County*

$10,000

City of O’Fallon

$5,000

Jefferson County

$5,000

City of Florissant

$6,000


St. Louis County

$10,000

St. Charles County*

$10,000

City of O’Fallon


 




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

DOWN PAYMENT ASSISTANCE IS GETTING EASIER 

IN ST. CHARLES, O'FALLON, WENTZVILLE, ST. PETERS AND THROUGHOUT ST.CHARLES COUNTY!

 

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 bob@bobrutledge.com, or you can visit my website at www.bobrutledge.com. 




 

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

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