What You Get, and What You Hand Back
Program and regulatory figures verified September 26, 2026. Details change; confirm your scenario with us.
One input, two answers. The second table is the one worth screenshotting before you decide.
The calculator
| Mortgage amount | |
|---|---|
| MHDC assistance, 4% of the mortgage |
Still repayable if you sell or refinance
| You leave in… | Forgiven | You repay |
|---|---|---|
| Year 1 | ||
| Year 2 | ||
| Year 3 | ||
| Year 4 | ||
| Year 5 | ||
| Year 6 | ||
| Year 7 | ||
| Year 8 | ||
| Year 9 | ||
| Year 10 |
Forgiveness begins after year five and runs at 1/60 of the balance per month, so each full year from five to ten clears 20%. Figures are the program's own arithmetic, not a quote, and no rate or payment figure is included or implied. A federal recapture tax may apply separately on disposal.
Reading the exit table
The first five rows are identical, and that is the whole point. Whatever your purchase price, years one through five all repay the full amount, because MHDC's forgiveness clock does not start until after year five.
Then it moves quickly. Each full year from five to ten clears 20% of the balance, so the halfway point falls around year seven and a half. Why the schedule is shaped this way.
Why more down means less help
The assistance is 4% of the mortgage amount. Raise your own down payment and the loan falls, so the 4% falls with it.
That produces a genuine trade-off rather than an obvious answer. More of your own money down means a smaller loan and a smaller second lien to repay if you leave early; less down means more assistance and more exposure to the cliff. Which is right depends on your reserves and how long you expect to stay, and it is worth ten minutes with someone who will run both.
The recapture tax, separately
MHDC's programs are funded by tax-exempt mortgage revenue bonds, and a federal recapture tax may apply when a borrower disposes of the residence by sale, exchange or gift. Lenders provide a Notice of Potential Recapture Tax at closing.
Whether it would cost you anything depends on your income at the time, how long you held the home and your gain. That is a question for your tax preparer, not for us, and we will say so rather than guess.
What this cannot settle
Whether your income fits · which program you are on · whether the credit and ratio work · and whether the file actually closes.
Frequently asked questions
How much is 4% MHDC assistance on a $275,000 house?
It depends on your loan, not the price, because MHDC's assistance is 4% of the total mortgage amount. On a $275,000 purchase with 3.5% down the mortgage is about $265,000 and the assistance is about $10,600. Putting more of your own money down lowers the loan and therefore lowers the assistance.
If I sell in year three, how much MHDC assistance do I repay?
All of it. MHDC's forgiveness does not begin until after year five, so years one through five all repay the full amount regardless of purchase price. From year five the balance clears at 1/60 per month, meaning 20% per full year, reaching zero at year ten. MHDC down payment assistance is a forgivable second loan, not a grant.
Does putting more money down increase my MHDC assistance?
No, it reduces it. The assistance is 4% of the total mortgage amount, so a larger down payment means a smaller loan and a smaller 4%. That creates a real trade-off: less down gets you more assistance but more exposure to the five-year cliff, while more down means a smaller second lien to repay if you leave early.
What is the federal recapture tax on a Missouri MHDC loan?
MHDC's programs are funded through tax-exempt mortgage revenue bonds, and a federal recapture tax may apply when a borrower disposes of the residence by sale, exchange or gift. Lenders provide a Notice of Potential Recapture Tax at closing. Whether it actually costs you anything depends on your income at the time, how long you held the home and your gain, which is a question for your tax preparer.
When is half of MHDC assistance forgiven?
Around year seven and a half. Forgiveness starts after year five and runs at 1/60 of the balance per month, so thirty months of burn-down clears half. At year seven roughly 40% has been forgiven, and at year nine about 80%. The balance reaches zero at year ten.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal or tax advice. MHDC program terms, income limits and purchase price limits are set by the Missouri Housing Development Commission and change; figures here carry the date we verified them against MHDC's published documents. MHDC down payment assistance is a forgivable second loan, not a grant, and selling or refinancing inside ten years can require repaying all or part of it. Loans are subject to borrower and property qualification.