Get More Money With New Kansas City Down Payment Program

Get More Money With New Kansas City Down Payment Program

If you’re looking to buy a new home in the Kansas City area, it just got more affordable with a new loan program through the Missouri Housing Development Program (MHDC). Qualified buyers get down payment assistance plus an additional subsidy up to $2500 that you don’t have to pay back! This program is available for Kansas City area first-time homebuyers and repeat buyers.

New Missouri home loan offer

If you’re a Kansas City area homebuyer concerned about housing affordability due to rising home prices, there’s a new loan program you need to know about to help with down payment and loan costs. The MHDC HFA Down Payment Loan offers a conventional loan and a cash subsidy to qualified buyers.

Buyers get 4% cash assistance plus up to $2500 more. The amount of the gift depends on your income, and you don’t have to pay it back.

“We’ve never had anything like this before,” said Michelle Ekstam Jones, a Community Mortgage Senior Loan Originator.

Here’s how the MHDC HFA Down Payment Loan works:

  • 4% cash assistance*
  • Up to $2500 subsidy for qualifying buyers**
  • 640 or better credit score AND Automated Underwriting Approval
  • 45% Maximum Debt to Income Ratio
  • 5.45% current interest rate for first-time homebuyers — UPDATED: Now 4.95%
  • 6% current interest rate for repeat homebuyers

*For qualified buyers, based on income and purchase price rules.
**For qualified buyers, based on income requirements.

Qualified Kansas City homebuyers (first-time and repeat): get 4% cash assistance + up to $2500 with new loan program Click To Tweet

The subsidy is based on income limitations.

If you’re under 80% median income, you qualify for $1500. In Jackson County, that’s anyone whose household income is under $64,000.

If you’re under 50% median income, you qualify for $2500! That’s anyone whose household income is under $40,000 in Jackson County, Missouri communities like Blue Springs, Lee’s Summit, Grain Valley, and Oak Grove.

Those are the income limits for the subsidy only! There are separate rules for the cash assistance part of the loan.

If you’re familiar with the First Place and NextStep programs through MHDC, this loan works similiarly except it’s a conventional loan with a no-strings-attached subsidy to qualified homebuyers.

Kansas City closing cost help

“I like the extra cash assistance [subsidy]. It helps buyers with closing costs. In this market, it’s tough to get the seller to pay all the closing costs,” Ekstam Jones explained.

With average closing costs in the Kansas City area around $5000, the subsidy can cover up to half your costs with the potential for the seller to cover the other half.

Need closing cost help on a Kansas City area home? New Missouri home loan program offers help to qualified buyers! Click To Tweet

If you make more money than the income requirements for the subsidy, you can still qualify for cash assistance only. That’s available for repeat buyers, Veterans, and first-time homebuyers.

“MHDC’s HFA down payment assistance program with the additional subsidy is making it possible for first-time and repeat buyers with no other down payment sources available to get into homes,” Ekstam Jones explained.

Kansas City first-time homebuyer cash assistance

First, the cash assistance options for Kansas City first-time homebuyers and Veterans. You can lower closing costs or your down payment through a 4% cash assistance loan.

There are separate financial and personal guidelines to qualify for this part of the program. You can make more money under this part of the program, so more Kansas City home buyers qualify for this down payment assistance.

You need to be a first-time homebuyer with 1-2 people in the home. There is a slight change in the program, in that non-spouses and their income no longer count.

Your income can be up to $80,000 in the Kansas City area if 1-2 people live in your home, excluding non-spouses.

If your household includes 1-3 people, the income limit is $92,000 in the Kansas City area.

There are also purchase price limits. Single-family homes up to $248,098 qualify for this program. If you are buying a home in a targeted area, you can spend up to $303,231.

So, what’s the catch?

“You have to claim 1/10 of the cash assistance every year until you claim it all over ten years. If you claim half as income, then you only pay back half of it when you sell the house. It’s prorated every year,” Ekstam Jones said.

For example, if you sell your home after five years, you’ll likely only pay back half the 4% cash assistance.

You can use this program with other down payment assistance programs, so talk to your lender about the right fit for your financial situation.

If you don’t have a lender, speak with your real estate agent to find out a partner lender.

You can also run your own numbers, to get a ballpark ahead of time of what you can afford, with the Missouri Housing Development Commission Mortgage Calculator.

Best Down Payment Help in Kansas City Area

Repeat homebuyer down payment assistance

So, what if you’re not a first-time homebuyer or you’re a first-time homebuyer that doesn’t meet the income requirements above? You still may be in luck.

The MHDC Next Step program helps all qualified buyers with down payment assistance. There are higher income limits. The tradeoff is a higher interest rate as well.

If you’re moving to a designated “Opportunity Area” in Missouri, you’ll get a slightly better interest rate.

In Jackson County, Missouri, the income limit is $96,000 for a 1-2 person household and $112,000 for a 3-person household.

The purchase price limit is $331,423 for a single family home. So, a lot of Kansas City area homebuyers qualify for this program!

This is just one of many down payment assistance programs available to Missouri home buyers. For a detailed look at all your options, learn more about the best down payment help in the Kansas City area.

Homeownership is possible, even on a tight budget. Don’t get hung up on a 20% down payment. There are a number of programs that make homeownership possible with far less money. This is just one of them. Here are some of the most common down payment myths we often here.

Overview of MHDC HFA Loan Program

Here’s a snapshot of the MHDC HFA Down Payment Loan Program:

Income Guidelines

  • 1-2 people: $80,000 in the Kansas City area
  • 1-3 people: $92,00 in the KC area

Credit

  • 640 or better credit score AND Automated Underwriting Approval
  • 45% Maximum Debt to Income ratio

Loan

  • 5.45% current interest rate for first-time homebuyers
  • 6% current interest rate for repeat homebuyers
  • 4% Cash Assistance plus additional subsidy (Gift) for lower income limits
  • Lower Mortgage Insurance Rates
  • 97% LTV

Who

  • First Time Homebuyers who meet financial requirements
  • Repeat homeowners who meet financial rules
  • Missouri residents
  • Purchasing a single family home including townhomes, manufactured homes, condo, or one side of a duplex

If you have any questions, talk to a knowledgeable real estate agent about down payment options. They’ll be able to connect you with a trusted lender who can help you figure out how much home you can afford.