Many millennials and first-time home buyers are flocking to Kansas City, Missouri, and for good reason. Kansas City has a low cost of living, virtually no traffic and tons of green space. The city has neighborhoods such as the historic Waldo area and the buzzing nightlife in the Power & Light District. It also has some of the best barbecue spots in the Midwest such as Joe’s Kansas City, Jack Stack, and Q39.

There are several home buyer programs available to help people make the move to Kansas City. Some programs offer a lower down payment, and others offer lower mortgage insurance. Keep reading below for a breakdown on the top programs available for future Kansas City residents.


1. First Place

The Missouri Housing Development Commission offers a program for first-time home buyers called First Place. This loan program has two options, one with cash assistance and one without. The cash assistance option provides a forgivable second mortgage at closing that covers most or all of the down payment. The second mortgage is forgiven after 10 years if the home remains the borrower’s primary residence.

This program only applies to homes in Missouri. To qualify, home buyers must fall under the income restrictions and meet the minimum credit score requirements. This program can be used with FHA or conventional loans. The program has a 30-year fixed mortgage rate, and the cash assistance option has a higher interest rate than standard loans. 


2. Next Step

This program offered by the MHDC is aimed at helping people who earn slightly above the income limits for the First Place program. Both first-time home buyers and non-first time homebuyers can apply for Next Step, and Next Step has a similar cash assistance option to First Place. 

This program is available to buyers looking for homes in the state of Missouri, and the loan type can be FHA, VA, RD or conventional. The first mortgage comes at a 30-year fixed rate. This program offers lower interest rates and other incentives to people who buy in “opportunity areas.” First-time homebuyers can also combine this program with the state’s Mortgage Credit Certificate program. 


3. Mortgage Credit Certificate

This program is aimed at helping first-time homebuyers lower the amount of federal income tax they owe each year. Through the program, the MHDC gives qualified borrowers a tax credit of 25 percent, or up to $2,000, of the mortgage interest they pay every year. For example, a borrower with a $130,000 mortgage with an annual income of about $21,500 would save about $135 a month through the program. 

To qualify for this program, borrowers must fall under the set income limits. The program also has purchase price limits, which are slightly higher for homes that are located in lower income Targeted Areas. There are exemptions to the first-time homebuyer requirement for borrowers who served in active duty and have an honorable discharge. 


4.  HomeReady

HomeReady is a program offered by government-sponsored enterprise Fannie Mae. This program is aimed at helping anyone with lower incomes, not just first-time homebuyers. People can also qualify for this loan program if the home is in a Census designated low income area. All potential borrowers are required to complete a buyer education course online for this loan. 

This program allows for a 3 percent down payment, and it offers considerably lower rates and mortgage insurance than normal. The program has additional income allowances for people who work in public service, such as teachers, police officers and firefighters. Without the typical 20 percent down payment required, this loan program is easily the most cost-effective option available. 


So when you’re ready to buy a home in Kansas City, rest assured that you have options to help you finance the home of your dreams. You don’t have to go it alone! Once you secure some funding for your down payment, be sure to hire a reputable real estate agent to help you find the right property for your needs.


This is a guest post written by Sam Casteris.

Photo via Pixabay. No changes made to photo. Creative Commons License.