First-Time Home Buyer Programs in Missouri 2026

In Missouri, first-time buyer loans come from the Missouri Housing Development Commission (MHDC) through two programs, First Place and Next Step. Both are 30-year fixed mortgages at rates MHDC sets. Either one can carry cash assistance equal to 4% of the total first loan, structured as a second loan that is 100% forgiven after ten years. MHDC’s March 2026 manuals describe that second loan as available to “qualified first-time homebuyers and qualified Veterans,” so a repeat buyer using Next Step should confirm with the lender whether the 4% applies before counting on it.

The two programs split on who qualifies. First Place is the bond-funded loan for first-time buyers and qualified veterans. Next Step has higher income and price limits and, according to MHDC, “is available to both first-time homebuyers and repeat buyers.” This page covers how each program decides eligibility and what the lender will ask for. Other down-payment sources in the state are collected in the Missouri down payment assistance guide.

First Place or Next Step: which MHDC loan you are applying for

The limits come from MHDC’s 2026 Income and Purchase Price Limits sheet, posted May 12, 2026. The price caps follow IRS Rev. Proc. 2026-23, effective May 6, 2026, and the income caps follow HUD’s FY 2026 figures, effective May 1, 2026. Income caps are higher in four metro groups: the Kansas City, St. Louis, Columbia and Jefferson City MSAs. The sheet names the counties in each and lists a few exceptions, such as Bates County in the Kansas City group. MHDC’s lender resources page has the current sheet.

The 4% second loan is forgiven, but it is not a grant

MHDC’s own manual answers the question directly: “No, these are not grant funds.” The cash assistance is a second loan for exactly 4% of the first loan. The 4% is figured on the total first loan, so it includes an FHA upfront premium or a VA funding fee when one is financed. It can go toward the down payment and closing costs.

The forgiveness has two conditions. You stay in the home, and you keep the original loan for ten years. Nothing is forgiven for the first five years. After year five, the balance drops by 1/60 each month until it is gone at year ten. The manual spells out the other side: if you “sell the home or refinance during the 10-year period covered by the second note,” you “will be responsible for repaying all or a portion of the DPA.” The second also “may not be subordinated,” so a later refinance cannot leave it in place behind a new first loan.

You can also skip the assistance. MHDC offers both programs without the second loan, and it says those loans are “typically” .25% to .50% below the rate that comes with cash assistance. MHDC means that version for buyers who already have the down payment and closing costs.

How MHDC decides you are a first-time buyer

The First Place manual (revised 3/11/2026) sets three tests, and all three must hold for the past three years:

1. You have not owned a home or held a present ownership interest in a primary residence.
2. You have not claimed a real estate tax deduction on IRS Schedule A for any residence.
3. You have not claimed a mortgage interest deduction on Schedule A for any residence.

MHDC no longer collects your tax returns to prove this. Instead, the lender certifies on Form 520 that credit reports from all three bureaus show no homeownership in the prior three years. Owning rental property or undeveloped land does not by itself disqualify you. An inherited house doesn’t either, provided you have not lived in it as your primary residence in the last three years.

Two exceptions. A qualified veteran does not need to be a first-time buyer. That means a veteran who served on active duty, was not dishonorably discharged, and has never used the qualified-veterans exception for another bond-financed mortgage. The DD-214 is the proof. The second exception covers purchases inside a federally Targeted Area. MHDC’s list of these census tracts took effect January 8, 2024. In those tracts the first-time rule drops away, and the income and price limits rise to the higher column. The tract list covers pockets of counties such as Greene, Buchanan and Butler. Your lender looks up the address on the FFIEC census map and checks it against the list.

Credit, debt ratio and occupancy under the MHDC manuals

• Credit score: the minimum FICO is 640, or 660 on any manufactured home. MHDC adds that lenders “reserve the right to set more restrictive minimum credit scores,” so one lender’s 660 is not the program rule.
• Debt-to-income: on FHA, VA and USDA loans the cap is 45% for scores from 640 to 679, and up to 50% at 680 or higher. On the conventional HFA products, up to 50% is allowed from 640.
• Loan types: FHA, VA, USDA Rural Development, Fannie Mae HFA Preferred and Freddie Mac HFA Advantage, all 30-year initial purchase loans. Refinances are not eligible, except construction-to-permanent loans and bridge loans with an initial term under 24 months.
• Down payment: MHDC sets no minimum down payment and no minimum loan amount. Any floor comes from the FHA, VA, USDA or conventional rules underneath.
• Occupancy: you must move in within 60 days of closing, and the home stays your primary residence.
• Homebuyer education: MHDC’s manuals do not name a required course. They leave that question to the master servicer’s guidelines, so the lender tells you whether a class is required for your loan type.

Recapture tax on a First Place home

Because First Place is financed with tax-exempt mortgage revenue bonds, federal recapture tax can apply when you sell. MHDC’s FAQ says it applies only if all three of these happen: you sell within nine years, you make a net profit after improvements and selling costs, and your household income is over the limit in the year of the sale. Refinancing without selling does not trigger it. The manual caps the tax at 6.25% of the highest loan principal or half the gain on the sale, whichever is less.

What happened to the Missouri MCC

As late as December 2025, MHDC’s lender page listed a Mortgage Credit Certificate next to First Place and Next Step. The page read on September 24, 2026 lists only the two loans. MHDC’s MCC page at its old address now returns “Page Not Found.” A Next Step fact sheet still says some borrowers “may be able to pair their Next Step Loan with an MCC” worth up to $2,000 a year. But MHDC’s March 2026 Next Step manual does not mention an MCC, and MHDC posts no current MCC terms. Ask the lender before you count a tax credit into your budget.

Applying through an MHDC Certified Lender

Applications go only through Certified Lenders, and MHDC notes that “mortgage brokers and some lenders are not eligible to offer this program.” MHDC’s FAQ answers “Does it matter which lender I use?” with “No,” because MHDC sets the rates, the limits and the closing costs a lender may charge. A lender can still set a higher credit-score floor. MHDC says it “will require a refund to the borrower” if a lender charges a fee that is not allowed. Funding is “allocated on a first-come, first-serve basis.” Bring a list of your debts, your employer details, recent pay stubs and any divorce decree to the first appointment.

A city or county program can be layered on, as long as its lien sits behind MHDC’s. The manual puts any such lien “in third position behind MHDC’s 2nd lien.” It also bars seller-funded programs such as Nehemiah and interest-bearing seconds from for-profit companies.

For budgeting, use the mortgage calculator and the affordability tool. Missouri’s closing costs are the other bill the 4% can go toward. For the loan underneath, see FHA requirements and the VA loan guide.

Missouri first-time buyer questions

I owned a condo that I sold in 2021. Am I first-time for First Place?

Yes, as long as you have not owned a primary residence or claimed a Schedule A real estate tax or mortgage interest deduction in the past three years. If you have, Next Step does not require first-time status, but its March 2026 manual lists the 4% second loan for “qualified first-time homebuyers and qualified Veterans,” so ask the lender whether you would get the cash assistance.

How much is the MHDC cash assistance on a $250,000 FHA loan?

It is 4% of the total first loan. On a $250,000 first loan that is $10,000, and more if a financed upfront premium raises the total.

What if I refinance in year three?

You repay all or part of the 4% second. MHDC’s manual says a refinance during the 10-year period makes you “responsible for repaying all or a portion of the DPA.” The refinance alone does not trigger recapture tax.

Do veterans get anything extra from MHDC?

Yes, a waiver of the first-time rule for First Place. The waiver applies to a qualified veteran who has not used it before. MHDC’s manual says a veteran may be able to keep an existing home, but not to buy an investment property.

Is an MHDC loan available anywhere in Missouri?

Yes. MHDC says homes “may be purchased in all parts of the state.” What changes with the address: income caps are higher in four metro groups, and inside a federally Targeted Area the first-time rule is waived, the price and income caps rise, and MHDC says those loans “generally receive priority for the lowest interest rates.”

For neighboring states, see the first-time programs in Kansas and Oklahoma. Taxes, insurance and markets are on the Missouri hub.