MHDC which is also known as Missouri Housing Development Commission, is a first-time homebuyer program, which is offered by the states. MHDC is a form of the FHA loan that does allow down-payment assistance.
When considering a new home, you should go by these guidelines:
- MHDC will allow borrowers to use 3% down-payment assistance which will bring the financing to 99.5% with only .5% down.
- Unlike the USDA loans, which require properties to be in certain locations, the MHDC loan does not have this requirement and any FHA-approved property is eligible.
- There are income limit requirements for the MHDC loans, and if the property is sold or refinanced in less than 3 years, the down-payment assistance money needs to be paid back.
- MI (Mortgage Insurance) options are about equal to the FHA loan requirements; regardless of the down payment, MI will be charged.
- First-time homebuyers and qualified veterans are the only exceptions to participate in this loan program.
- Eligible properties for the MHDC loans are single-family detached, duplexes, semi-detached, condominiums, townhomes, and modular or manufactured housing.
Contacting a loan officer before house shopping should be your first step in purchasing a new home; you will want to see if you’re “pre-approved” so you can see how much you can afford to borrow and what you can afford to pay on your new home.
Being pre-approved can give you a stronger position when negotiating with a seller, as it shows you’re a serious buyer who has already started the mortgage process. If you’re pre-approved, it can also speed up the closing process, which can be particularly helpful in a competitive market.
