Next Step Program

One of the major obstacles on the path to homeownership is the down payment. Though many people can afford to make monthly mortgage payments, they don’t have enough money saved to pay the upfront costs. In an effort to help individuals overcome this obstacle, the Missouri Housing Development Commission introduced the Next Step Program.

Available Assistance
Under the Next Step Program, eligible applicants can receive up to 4% of the first mortgage amount in assistance funds. The amount can be used to cover some or all of their down payment and/or closing costs. These funds come in the form of a forgivable second mortgage. This loan does not need to be repaid as long as the borrower stays in the home for 10 years. After the fifth year, the mortgage will diminish by 1/60 every month, until the end of the term when it is forgiven completely

Eligibility Requirements
In order to be considered eligible for the First Place Loan Program, applicants must meet certain requirements. All applicants must meet the program’s set income and credit score limits. Household income limits are based on the total gross annual household income for all residents age 18 or older who will live in the home. Income includes wages, overtime, bonuses, commissions, child support, alimony and earnings from a second job, business and investments.

Property Guidelines
Any home being purchased under the program must serve as the applicant’s primary residence and must be occupied by the owner within 60 days of the loan closing. Eligible property types include single‐family detached homes, one‐half duplex, semi‐detached homes, condominiums, townhomes, or manufactured homes on a permanent foundation. Duplexes are eligible, provided one unit is owner‐occupied and the units are at least five years old. Any property purchased must be located outside the 100 year flood plain. All homes must fall within the program’s set purchase price limits; $303,231 for a single-unit, and $388,245 for a two-unit.

Income Limits
Kansas City MSA
1-2 person household: $89,760
3 plus person household: $104,720
St. Louis MSA
1-2 person household: $89,400
3 plus person household: $104,300
Columbia MSA
1-2 person household: $89,280
3 plus person household: $104,160
Jefferson City MSA
1-2 person household: $77,040
3 plus person household: $89,880
All other areas
1-2 person household: $75,840
3 plus person household: $88,480

*Seller-funded down payment programs were eliminated in the Housing and Economic Recovery Act of 2008, but  state and local government agencies are still permitted to help borrowers finance their homes with second mortgages and grants. These agencies set different requirements that a borrower needs to meet in order to qualify for the grant programs, such as property location, and purchase price and income limits.


(Note: All figures were accurate at the time of publication and may no longer be current - visit the program website for updated information.)