Thanks to the Missouri Housing Development Commission, if you can only afford a very small down-payment, you can still afford a home!
MHDC has a FIRST PLACE Loan, in which a buyer only needs .5% (that is 1/2%) to put as a down payment on a FHA loan. MHDC will pay the other 3% to cover your down-payment.
What are the requirements?
- You must be income eligible. In St. Louis, that means you cannot make over $67,900 for a 1-2 person household.
- Purchase price must be under $258,690 in a non-targeted area and $316,177 in a targeted area. (Contact your lender to find out what targeted areas are.)
- You must occupy the home within 60 days of closing. (No rental Properties here)
- You must live in the house for 5 years in order for the 3% loan to be paid off. In other words, if you don't live in the home for 5 years, you will have to repay the 3% to MHDC.
- The interest rate is automatically 5.625%. No exceptions. This was set by MHDC, not by lenders.
This is a great option for first time home buyers. You will still receive the $8,000 tax credit. So, if you choose to go this route, and you are planning on staying in a home for 5+ years, the government is going to give you $11,000.
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