What is the MHDC loan? Get a home in Nixa with zero money down.

Jason Yeager
Jason Yeager
Published on March 1, 2018


  Despite having decent credit, a good job and the ability to pay for a home every month, the dream of buying a home in Nixa is somewhat elusive for those with little to no cash to put down. This is why our younger generation isn’t buying homes at the rate that previous generations did. With student loan debt weighing them down, there is little money left at the end of the month to set aside for the down payment on a home. And, sadly, most lenders require you to have some skin in the game before they’ll lend you money for that home. Thankfully, there is help – both state and municipal agencies offer down payment and closing cost assistance to homebuyers here in Nixa and all over Missouri like the MHDC loan which we’ll talk about here in a minute. While it will take some work on your part, you can get around saving that huge chunk of cash known as the down payment.

Missouri down payment assistance programs

Down payment assistance comes in the forms of grants (that don’t have to be repaid) and loans — some at no interest or very low interest and some don’t have to be repaid until you sell the home. State Housing Finance Agencies (HFA) offer many opportunities so check into yours first. You can find a list online at ncsha.org. I have a couple great lenders here in Nixa that I work with regularly that offer down payment assistance programs.  Here in Missouri it’s called an MHDC loan. And not very many people are aware of it.


The Missouri Housing Development Commission MHDC Loan is a 4 % grant meaning you don’t pay it back! There are conditions

  • Must live in the house 10 years
  • Grant can be used for down payment and/or closing costs
  • Can be used with conventional, FHA, USDA, or VA loans.

I’ll post a link to Flat Branch Mortgage‘s website with more info on the MHDC loan. Then, there are special programs for teachers and first responders. See HUD’s Good Neighbor Next Door program for information on these programs. Find state and local government programs on HUD’s website, here.

No down payment loans

1. If you are a current member of the military, a veteran or a surviving spouse, look into the VA Loan.

The United States Department of Veterans Affairs doesn’t actually grant loans; they guarantee the repayment of a portion of the loan should the borrower default. The loan is granted by a private lender but not all lenders participate in the program so you may have to shop around for one. Here in Nixa, Missouri we have many lenders that participate. The VA-backed mortgage requires no down payment and there is no requirement to purchase private mortgage insurance, which will make your monthly payment lower than with a conventional loan. There is, however, a funding fee but it can be wrapped into the loan amount, so you won’t have to come out-of-pocket for it.

2. The United States Department of Agriculture (USDA) offers the Rural Development home loan program which also requires no down payment.

They offer two different loan programs. The first is a guaranteed USDA loan. It is very much like the VA loan in that it offers the lender a government-backed guarantee. My wife and I used this to purchase our first home here in Nixa.  The second program is a direct loan from the USDA and it’s for low-income borrowers. These loans are for homes in rural areas and you can learn if a home you are interested in qualifies by using the USDA website’s eligibility tool. Right now homes in Nixa currently qualify for USDA financing. Springfield does not. BUT there are rumors going around that Nixa will soon be on the chopping block for USDA. So if you have been tossing this option around I would highly recommend at least having a conversation with one of our preferred lenders. We have done deals for people with credit scores as low as 570 so see if you might qualify sooner than you think. To find out what your payments might be and learn more details on the USDA Loan click here.

Low down payment loans


Yes, FHA is popular for its low down-payment requirement, but when they changed the mortgage insurance requirement, the loan program became a lot less popular. Today, the Mortgage Insurance Premium for the FHA loan sticks with it for the life of the loan. If you need a low-down payment loan, however, this may be your program of choice. You’ll pay either 3.5 or 10 percent of the loan amount, depending on your credit score and lender requirements.

Fannie Mae and Freddy Mac

The HomeReady® loan from Fannie Mae actually offers a lower down payment requirement than the FHA program – 3 percent. You will also have the option of cancelling the PMI when your equity in the home reaches 20 percent. This loan is best for low-to-moderate income borrowers with credit scores of 680 or more. You do not need to be a first-time homebuyer to qualify. Home Possible®, Freddie Mac’s low-down payment program, offers down payment options as low as 3 percent. Learn more about this program online at freddiemac.com. If you live in or around Nixa, Missouri I’m happy to talk with you more about the MHDC loan and other down payment assistance programs. Schedule some time with me and let’s go grab a coffee on me! ; )

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