If you’re a low-income buyer looking to purchase a home in Missouri, then you know that the process can be stressful. You’ll not only need to ensure that you can obtain sufficient financing to buy your dream home, but you’ll also need to consider other costs too. This will include the likes of down payments and closing costs.
You should also remember that the average closing time from the moment an offer has been accepted is just 30 days. If you haven’t had your financing arrangements approved, it could jeopardize the deal.
Fortunately for you, you’ll be pleased to know that there is now a range of housing grants and loans available to low-income buyers in Missouri. These programs are not only available at a state-level, but v, too.
Best Missouri Loans & Grants for Low-Income Home Buyers
All of the following state-wide programs are offered by The Missouri Housing Development Commission (MHDC).
First Place Program
The First Place program is best-suited to those that are first-time buyers or qualified veterans. Obtaining financing via the program will provide you with a 30-year, fixed-rate loan at highly favorable rates. Although the program does take income into account, the threshold is much lower in comparison to private lenders.
The First Place program allows single unit purchases of up to $331,423. However, with median property prices currently at $161,700 in Missouri, you should be able to find a suitable property.
Cash Assistance Loan
The Cash Assistance Loan program can be used in conjunction with the First Place program. This offers low-income buyers a loan of up to 4% of the original financing amount obtained via the First Place program.
Although this is treated as a second mortgage, you won’t need to make any monthly payments. Moreover, as long as you remain in the property for at least ten years, the Cash Assistance Loan is forgiven.
Mortgage Credit Certificate Program
The Mortgage Credit Certificate program offers low-income buyers the opportunity to reduce their federal tax bill. Through Mortgage Credit Certificates, the program can reduce your annual tax liability by 25%, up to a maximum of $2,000 per year. You can claim the credits for the entire duration of your mortgage for as long as the property remains your primary residence.
Best Federal Mortgage Options for Low-Income Buyers
If none of the above MHDC programs are suitable for your needs, or you’re looking for additional assistance, then it might be worth considering a federal program.
FHA Home Loan Program
The FHA Home Loan program is ideal if you’re a low-income buyer. The program offers mortgages with a down payment of just 3.5%. In order to qualify you will need to have a FICO credit score of 580 or above. If you don’t quite meet this requirement, the FHA program instead offers a home loan with a 10% down payment if your FICO score is between 500 and 579.
You also stand the chance of obtaining a lender rebate of up to 2.75% via the FHA program, up to a maximum of $28,000.
HUD Good Neighbor Next Door Program
If you are currently employed in a service-based role such as a firefighter, law enforcement officer or teacher, then you might be able to get on the Good Neighbor Next Door program. The program is provided by the Department of Housing and Urban Development (HUD). If you do qualify, you can purchase your Missouri home at a 50% discount.
The program can only be used to buy a single family home, and it needs to be your primary residence for at least three years.
Learn More: Complete Guide To FHA Loans.
Best Private Lender Programs in Missouri for Low-Income Home Buyers
It is also worth considering a private lender program if you’re a low-income buyer based in Missouri. The reason for this is that some private lenders offer even better terms that the FHA program. For example, Freddie Mac’s HomeOne program offers home financing with a down payment of just 3%.
In order to qualify, you can not have owned a property in the last three years. The good news is that Freddie Mac does not base its decision on income or geographical location. Instead, you’ll need to undergo a Freddie Mac risk assessment.
Learn More: 7 Easiest Mortgage Lenders for First-Time Home Buyers.
Home Buyer Rebate
Low-income buyers in the Missouri area have a wide range of programs to choose from. This includes programs at a state and federal level, as well as notable private lender programs such as the HomeOne loan.
However, trying to figure out which program is best for your individual needs is no easy task. By using an experienced real estate agent based in Missouri, they’ll be able to guide you through the entire home buying process. This will, of course, include a full breakdown of your options when it comes to financing.
A Clever Partner Agent will also be able to unlock additional savings along the way, such as negotiating with seller’s to obtain the best price possible.