First Place, and the Test It Runs on Your Tax Returns
Program and regulatory figures verified September 26, 2026. Details change; confirm your scenario with us.
First Place is the bond program, which is why its rules come from the tax code and why its first-time test is stricter than you would expect.
What it is
MHDC describes First Place as providing below-market interest rates to first-time homebuyers and qualified Veterans, funded through the sale proceeds of tax-exempt mortgage revenue bonds, with program parameters governed by the United States Internal Revenue Code.
That last clause explains most of what follows. The strict definitions, the recapture tax, the targeted-area concept and the price caps are all tax-code machinery rather than MHDC preferences.
The three-pronged first-time test
Most states ask one question: have you owned in the last three years? MHDC asks three, and all three must be satisfied. A first-time homebuyer is a person:
- Who has not owned a home or had a Present Ownership Interest in a primary residence for the past three years; and
- Who has not taken a real estate tax deduction (on IRS Schedule A) for any residence within the past three years; and
- Who has not taken a mortgage interest deduction.
Prongs two and three are read off your returns. So the practical advice is the same one we give everywhere and it matters more here: pull your last three years of tax returns before you apply, and if Schedule A shows real estate taxes or mortgage interest, tell us up front. Disclosed early it is a condition. Found late it is a problem. The test in detail.
The two exceptions
MHDC's own eligibility language carries them: a co-borrower "must be a first-time homebuyer (unless buying in a Targeted Area or they are a qualified Veteran)".
- Qualified Veterans are exempt from the first-time requirement entirely, anywhere in Missouri. What that means.
- Targeted areas waive it too, but Missouri designates them by census tract rather than by county, so it is an address-level lookup. How to check.
And if neither applies and you have owned recently, Next Step is the answer rather than a rejection. Next Step.
The numbers
| Test | First Place, non-targeted |
|---|---|
| Purchase price, 1-family | $566,354 |
| Purchase price, 2-family | $725,146 |
| Income, 1–2 people | $97,100 to $116,300 by area |
| Income, 3 or more | $111,665 to $133,745 by area |
| Minimum credit score | 640, or 660 for manufactured homes |
Purchase price limits are under Rev. Proc. 2026-23, effective May 6, 2026; income limits are the HUD FY 2026 figures effective May 1, 2026. In a targeted census tract a First Place buyer reads the targeted column instead. Every area.
No stacking with an MCC
The manual is explicit: First Place loans may not be used in conjunction with Mortgage Credit Certificates. That rule stands on its own, and it happens to be moot at the moment because MHDC's MCC program has been paused indefinitely since January 1, 2026.
It is worth knowing both facts, because a good deal of published Missouri advice still suggests combining the two. The correction.
What First Place can be combined with
Other down payment assistance products are allowed, with conditions: MHDC's lien must occupy first position and outside DPA must be subordinate, and all secondary financing must be approved in advance by both MHDC and the master servicer. Nehemiah-style seller-funded programs are prohibited, as are interest-bearing seconds from for-profit companies and 80/20 or 80/10/10 structures designed to avoid mortgage insurance.
The two programs · the full test · the forgiveness schedule.
Frequently asked questions
Who qualifies for MHDC First Place?
First-time homebuyers and qualified Veterans. MHDC defines a first-time homebuyer with a three-part test: no home ownership or present ownership interest in a primary residence for the past three years, no real estate tax deduction on IRS Schedule A for any residence in the past three years, and no mortgage interest deduction. Buying in a targeted census tract also waives the requirement.
Does MHDC check tax returns for the first-time buyer rule?
Effectively yes. Two of the three prongs of MHDC's first-time homebuyer definition are about deductions rather than title: whether you have taken a real estate tax deduction on IRS Schedule A for any residence in the past three years, and whether you have taken a mortgage interest deduction. Pulling your last three years of returns before applying is the practical step.
Can First Place be combined with a Mortgage Credit Certificate?
No. The First Place Operations Manual states that First Place loans may not be used in conjunction with Mortgage Credit Certificates. The point is currently moot in any case, because MHDC's MCC program has been paused indefinitely effective January 1, 2026, though many third-party sites still present the two as stackable.
What is the purchase price limit for First Place?
$566,354 for a one-family residence and $725,146 for two-family in non-targeted areas, under Rev. Proc. 2026-23 effective May 6, 2026. In a targeted census tract the limits rise to $692,211 and $886,289. Those higher figures also apply to Next Step statewide, without a targeted tract.
Why does First Place have so many tax rules?
Because it is a bond program. MHDC funds First Place through the sale proceeds of tax-exempt mortgage revenue bonds, and states that program parameters are governed by the United States Internal Revenue Code. The strict first-time definition, the targeted-area concept, the acquisition cost limits and the potential federal recapture tax all come from that machinery rather than from MHDC preference.
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.