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Finding Down Payment Assistance

One of the toughest roadblocks people face when purchasing a home is saving up for the down payment and closing costs.

The Missouri Housing Development Commission (MHDC), USDA Rural Development, and many more mortgage programs are packaged with down payment assistance for home buyers all over the Midwest who might lack sufficient equity or funds to purchase their new home.


Working to construct, renovate, purchase and preserve affordable housing, the MHDC offers loan funding to qualified homebuyers looking into these areas. You can even qualify as a first-time buyer if you haven’t owned a primary residence for three years.


  • Loans can be used for most kinds of residences, except for mobile homes.
  • Lower interest rates offered as incentives for eligible areas.   


  • Income limits vary by loan, location, and household size.
  • Maximum total debt-to-income ratio of 45%.
  • Home has to be a primary residence in the Show Me State.

First Place Loan Program

For first-time homebuyers, qualified veterans and buyers in target areas, there are two types of First Place loan programs: with or without closing cost assistance.

The First Place loan program with cash assistance supplies a down payment and/or closing cost assistance of 4% of the mortgage amount. The grant acts as a forgivable second mortgage without any monthly payments. After 10 years, the second mortgage will be forgiven if the borrower keeps the loan and the home as a primary residence. Once the first five years have passed, 1/60th of the loan is forgiven each month for the final five years, until it's completely absolved.

This program has a 30-year fixed rate mortgage. Here’s some details about its price and income limits.

Next Step

The Next Step program gives repeat and first-time homebuyers earning too much to qualify for First Place loans or buying a home above the cut off a chance for the same forgivable down payment assistance.

The key difference is that Next Step borrowers get a lower interest rate if they buy homes in opportunity areas. The MHDC defines an opportunity area as a metro region with low poverty and high income and educational levels. This policy helps encourage affordable housing in these neighborhoods. Here’s some details about its price and income limits.

Mortgage Credit Certificate

First-time, low- or moderate-income homebuyers who use the Next Step program can obtain mortgage credit certificates for the life of their loan. Borrowers can get an annual credit up to $2,000 against federal income taxes. Income and purchase price limits apply.

National Programs to Consider

USDA loans, guaranteed by the U.S. Department of Agriculture, don’t require a down payment. These loans are used to promote designated rural living.

Community Champions celebrates everyday heroes such as EMT, school staff, and police and fire departments. Flat Branch Home Loans allows part of their closing costs to be waived for loans between $30,000 to $150,000.

Your next step

Visit the MHDC homeownership programs page for a list of loan programs for more details. In addition, Flat Branchers are always ready to serve you the information you need to get the right-fit assistance. Contact a loan officer at any time and we’ll get you right on track.