First Time Home Buyer Program – Down Payment Assistance – MHDC – St. Louis, St. Charles and Missouri
Posted on January 30th, 2011
Having a down payment and/or the funds to close is usually something that many First Time Home Buyers need or are interested in learning more about. Having no down payment is the number one reason that many who would like to buy their first new home wait. But, waiting is not necessary there are loan programs that allow for zero down payments or very small down payments as well as the State of Missouri has a very good Down Payment Assistance Program.
There are two loan programs that will allow any home buyer to purchase a new home with zero down payment, these programs are particularly good for first time home buyers because they also allow for easier qualification. If you are an eligible veteran you can take advantage of the VA mortgage program or if you live in a rural or near rural area in Missouri there is the USDA/Rural Development mortgage. I will be writing about these loan programs individually in a later article, contact me or visit my website, www.bobrutledge.com, if you would like to learn more.
The home loan program that most first time home buyers take advantage of is the FHA mortgage, this program has a minimum down payment requirement of 3.5 percent of the sale price. The program has much easier underwriting guidelines than a conventional mortgage, allows for the seller of your new home to provide up to 6% of the sales price to pay YOUR closing costs, and usually has better interest rates too! Having the seller pay 6% toward your closing costs is way more than you will need, so leave some room to have the sellers lower the sales price too. If you have negotiated well with the sellers of your new home and they are going to pay for all your closing costs that only leaves you with the FHA required down payment. What if you don’t have the required 3.5% down payment saved? What if you have the down payment saved but prefer to keep the money?
The State of Missouri through The Missouri Housing Development Commission, MHDC, has a great Down Payment Assistance Program that any First Time Home Buyer in St. Charles, St. Louis, and throughout the State of Missouri can take advantage of, if they qualify. This is free money, conditions apply, that MHDC will provide to any qualifying first time home buyer up to 3% of the loan amount to help with the purchase of your new home.
Let’s examine the home buying scenario I started earlier, you make an offer on a new home and negotiate with the seller to provide a seller’s concession that will pay for all your closing costs involved in the purchase. On top of that you have successfully qualified for the MHDC down payment assistance program, giving you an additional 3 percent that you can apply to your down payment. You are qualified for a FHA mortgage which has a 3.5% down payment, with all the math involved you can purchase your next new home with very little out of pocket expense.
WHY ARE YOU ALLOWING SOMETHING AS TRIVIAL AS HAVING NO DOWN PAYMENT STOP YOU FROM BUYING YOUR NEW HOME?
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Tags: Home Buyer, Payment, Time Home, Time Home Buyer
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