Missouri Mortgage Overview
Missouri has a population of just over 6
million people. The average home price is $157,000 and 66% of the homes in MO
are owner-occupied. The Missouri Housing Development Commission offers a
variety of programs to make buying your first home in Missouri simple.
If you're thinking of buying a home in
Missouri, here are your top loan options.
Missouri FHA loans
You don't need perfect
credit to get a mortgage in Missouri. The FHA loan offers flexible guidelines
for first-time and subsequent homebuyers. With a 580 credit score and 3.5
percent down on a home, you could become a homeowner in MO. The FHA loan has
flexible guidelines including up to 50 percent debt ratios. If you have a 500 -
579 credit score, you may still get approved but with a 10 percent down
Missouri VA loans
The VA helps veterans secure
housing by offering a 100 percent down payment program. Veterans need a 620
credit score and enough money to cover their bills and the daily cost of
living. The VA doesn't charge mortgage insurance and only charges an upfront
funding fee to provide the VA guarantee that allows lenders to offer flexible
guidelines for veterans.
Missouri USDA loans
The USDA also guarantees
loans for borrowers who don't qualify for any other loan program. You must live
in a 'rural' area, but the USDA loosely defines rural, making it more
accessible than many people think. USDA loans have low interest rates and
closing costs, but they do charge mortgage insurance for the life of the loan.
Missouri conventional loans
are for borrowers with great credit and low debt ratios. They are the
'standard' mortgage, but you can get by with less than 20 percent down.
First-time homebuyers need just 3 percent down and subsequent homebuyers need 5
percent down. Conventional loans charge PMI but only until you owe less than 80
percent of the home's value.
First-Time Homebuyer Programs in Missouri
First Place Loan Program
or anyone who hasn't owned a home in the last 3 years who meet the MHDC credit
score requirement may get closing
cost and down payment assistance of up to 4 percent of the loan amount. The
assistance is a second mortgage that the MHDC forgives if you stay in the home
for 10 years. It's forgiven at 1/60th of the amount each month until
the 120th month. The amount your receive and qualifying requirements
vary by area.
The mortgage credit certificate enables
borrowers to get a tax credit for the mortgage interest paid each year.
Borrowers may get a credit for up to 40 percent of the interest paid or $2,000
max. This reduces your tax liability and offsets the cost of owning a home.
Next Step Program
The Next Step Program is for
borrowers who make too much money to qualify for the First Place Loan Program
but who need assistance. The income limits are higher, but the program offers
the same benefits including a 4 percent down payment and closing cost
assistance that they forgive over 10 years.