Two Programs, One Assistance Structure
Program and regulatory figures verified September 26, 2026. Details change; confirm your scenario with us.
Missouri keeps this simple. One assistance product, two doors into it, and the door you use is decided by your history and your income.
Side by side
| First Place | Next Step | |
|---|---|---|
| First-time buyers | Yes | Yes |
| Repeat buyers | Only qualified Veterans, or in a targeted tract | Yes |
| Assistance | 4% forgivable second | 4% forgivable second |
| Forgiveness | Nothing for 5 years, then 1/60 a month to year 10 | Same |
| Price limit, 1-family | $566,354 non-targeted | $692,211 |
| Income, 1–2, floor | $97,100 | $116,520 |
| Income, 3+, ceiling | $133,745 | $162,820 |
| Credit score | 640 (660 manufactured) | 640 (660 manufactured) |
| Combine with an MCC | Prohibited | MCC paused since 1/1/2026 |
The assistance, once
Both manuals use the same sentence: qualified borrowers are eligible to receive a 100% forgivable second loan equal to 4% of the total mortgage amount to help with down payment and closing costs, forgiven if the borrower stays in the home and maintains the original loan for ten years, with the second mortgage diminishing by 1/60 every month after year five.
Note the base. It is 4% of the total mortgage amount, not of the purchase price, so the figure moves with your loan rather than with the house. Size it.
MHDC down payment assistance is a forgivable second loan, not a grant, and the five-year cliff is the single most important thing to understand before you take it. Read that first.
The Non-DPA option nobody mentions
Both programs let you take the MHDC first mortgage without the assistance, at a lower interest rate. MHDC describes it as best for buyers who have adequate funds for down payment and closing costs and want to save on the monthly payment.
That option deserves more attention than it gets. If you have the cash, taking the assistance buys you liquidity now in exchange for a higher rate and a ten-year lien with a cliff in it. Sometimes that trade is clearly right. Sometimes it is clearly wrong. It depends on your reserves and how long you expect to stay, which is a conversation rather than a rule.
We do not publish rate or payment figures on this site, so we cannot show you the spread here. Ask and we will run both against your actual file.
How the choice usually goes
- Owned a home in the last three years? Next Step, unless you are a qualified Veteran or buying in a targeted tract.
- Over the First Place income limit? Next Step. That is precisely what it exists for.
- First-time, under the limits, and want the lowest rate? First Place, and compare DPA against Non-DPA.
- Qualified Veteran? First Place is open to you regardless of ownership history. More.
The third program that is not currently running
MHDC also ran a Mortgage Credit Certificate. Cornerstone's approved lender guidance states it has been paused indefinitely effective January 1, 2026, and MHDC's homebuyer programs page now lists only First Place and Next Step. We do not publish MCC figures. The correction, and why it matters.
The full eligibility test · First Place · Next Step.
Frequently asked questions
What down payment assistance programs does Missouri offer?
MHDC runs two homebuyer programs, First Place and Next Step, and both carry the same assistance: a 100% forgivable second loan equal to 4% of the total mortgage amount. First Place is for first-time homebuyers and qualified Veterans; Next Step is open to first-time and repeat buyers and carries higher income and purchase price limits. MHDC down payment assistance is a forgivable second loan, not a grant.
Is MHDC assistance 4% of the purchase price or the loan?
Of the loan. MHDC's manuals describe the second loan as equal to 4% of the total mortgage amount, not of the purchase price, so the assistance scales with how much you borrow rather than with what the house costs. A larger down payment of your own therefore reduces the assistance figure as well.
What is the MHDC Non-DPA option?
It is the MHDC first mortgage taken without the down payment assistance, at a lower interest rate. MHDC describes it as best for buyers who have adequate funds to pay down payment and closing costs and are looking to save more on the monthly payment. It is worth comparing against the assistance, because taking the DPA means a higher rate plus a ten-year second lien with a five-year cliff in it.
Which MHDC program should I use?
If you have owned a home in the last three years, Next Step, unless you are a qualified Veteran or buying in a targeted census tract. If you are over the First Place income limit, Next Step. If you are first-time and under the limits, First Place, and then compare the assistance option against the Non-DPA option. The assistance itself is identical on both programs.
Do both MHDC programs have the same forgiveness schedule?
Yes. Both the First Place and Next Step Operations Manuals, revised 3/11/2026, use identical wording: the second loan is forgiven if the borrower stays ten years, and after year five the second mortgage begins diminishing by 1/60 every month until year 10. Nothing is forgiven during the first five years on either program.
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.