Tuesday, August 19, 2008

MORTGAGE NEWS – Free down payment money available for 1st time homebuyers!

Effective Monday, August 04, 2008, the Missouri Housing Development Commission (MHDC) released $65 million as cash assistance for first-time home buyers.

MHDC will provide the first-time homebuyer with a 5 year interest free forgivable loan equal to 3% of the purchase price of the house they are buying. This money can be utilized for the necessary down payment (3%) for an FHA loan or My Community Loan. The proceeds can also be applied to closing costs, prepaids and escrows if the borrower already has the necessary down payment.

If the borrower does not need the cash assistance (CAL Program), then the borrower can opt instead for a guaranteed lower rate from MHDC (Non-CAL Program)

MHDC does have certain guidelines that have to be met including income, the type of home you are buying and the biggest one is that you have to be a first-time homebuyer. The law defines a first-time home buyer as a buyer who has not owned a home during the past 3 years.

This along with the Tax Credit passed in the housing bill last week (see Grant’s article above) are excellent incentives for those first-time home buyers to get out and buy a house.

Interest rates for the MHDC program are listed below.

For more information on this program, please call me or visit www.mhdc.com.

30 Year Fixed 6.625% with 0 points

MHDC (CAP) FHA 30 Year Fixed 6.900 with 0 points

MHDC (non-cap) FHA 30 Year Fixed 6.45% with 0 points

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