MHDC First Place Loan Program

On a $210,000 home in Springfield, just under the city's estimated $220,000 median, an FHA loan through the MHDC First Place Loan requires 3.5% down, or $7,350. That leaves a first mortgage of $202,650. The Cash Assistance Loan equals 4% of the mortgage, about $8,100, as a 0% second loan with no monthly payment. It covers the full $7,350 down payment and leaves roughly $750 for closing costs. Outside the big metros, a one- or two-person household must earn $97,100 or less.

Estimated closing costs in Springfield run $4,500 to $6,500. Adding the $7,350 down payment, the buyer needs about $11,850 to $13,850 at closing before assistance. After the roughly $8,100 Cash Assistance Loan, the remaining out-of-pocket cost is about $3,750 to $5,750. Seller concessions or gift funds can close that gap. MHDC also caps lender charges, including a $275 funding fee and an $84 tax service fee.

A buyer at or below 80% of Springfield median income could add the City of Springfield Down Payment Assistance loan of up to $9,000, which carries no interest or payments and is forgiven over 10 years. The city caps the purchase price at $214,000 and requires a home inside city limits. Combined, the two forgivable loans total up to $17,100 against the estimated $11,850 to $13,850 cash need, with the city loan in third lien position.

The MHDC First Place Loan Program can be paired with city or county down payment programs, as long as their lien sits in third position behind MHDC's second loan and both MHDC and its Master Servicer approve the financing in advance. Local options include the City of Springfield Down Payment Assistance, up to $9,000 forgiven over 10 years, and the St. Charles County HOME Down Payment Loan, up to $10,000 at 0% interest and forgivable after five years. Each local program has its own, often lower, income limits.

First Place cannot be combined with a Mortgage Credit Certificate, an interest-bearing second mortgage from a for-profit company, or Nehemiah and other seller-funded down payment programs. Fannie Mae and Freddie Mac very-low-income purchase credits, including HomeReady and Home Possible VLIP credits, are also ineligible. MHDC's own second loan cannot be subordinated if you refinance later. For program questions, call MHDC at 816-759-6600.

Other ways to lower cash to close include seller concessions, gift funds and personal savings, which MHDC allows for costs its assistance cannot cover, such as real estate commissions. Buyers with enough savings can skip the Cash Assistance Loan and take a rate typically 0.25% to 0.50% lower. Purchases in federally targeted census tracts generally get priority for the lowest First Place rate MHDC has offered in the past 12 months.

The MHDC First Place Loan Program pairs a below-market fixed rate with a 4% forgivable second loan that has no interest and no payments. On a $202,650 mortgage, that is about $8,100 toward down payment and closing costs. MHDC regulates lender fees, capping origination at 1%, banning junk fees like document preparation charges, and requiring a refund if a lender overcharges. The $566,354 price cap and income limits up to $116,300 for small households in Boone County cover most Missouri homes, and the program works with FHA, VA, USDA and conventional HFA loans.

The biggest limitation is the 10-year commitment. The Cash Assistance Loan only starts shrinking after year five, so selling or refinancing in the first five years means repaying the full 4%. A sale within nine years can also trigger federal recapture tax, capped at 6.25% of the loan or half the gain, if you profit and your income has risen above the limit. The 640 credit floor, the 45% DTI cap on government loans below a 680 score, and the first-time buyer rule screen out some buyers. Repeat buyers or higher earners should compare MHDC Next Step.