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Benefits to Lenders

  • For each loan sold to MHDC, lenders receive a Servicing Release Premium(SRP):
    • First Place Loan Program - 2% SRP
    • Next Step Loan Program - 1.5% SRP
  • Non-Recourse sales. All loans are sold “servicing released” to our Master Servicer, currently U.S. Bank.
  • No forward placement risk. When these loans are originated, the rate and fees paid are guaranteed, provided delivery takes place within the reservation period.
  • CRA. Participation in the First Place program constitutes a CRA eligible activity, in most cases.


Due to the pandemic, lender training will be virtual until further notice. If you have any questions, or if we can assist you in any way, please call: 800-246-7973. Low registration rates may cause one or more classes to be canceled. If you are registered you will be notified in advance if cancellation should occur. 

Lender Resources

Program Details and Guidelines

The First Place Loan Program offers first-time homebuyers and qualified Veterans affordable mortgage financing, often at an interest rate lower than market rate loans. The loans are available from certified lenders for properties located anywhere in Missouri. Funds are always available in non-targeted and targeted areas. 

Eligible Loans

Eligible loans include: Initial purchase loans, FHA, VA, USDA-Rural Development, FNMA HFA Preferred Conventional or Freddie Mac HFA Advantage Conventional, 30-Year loans. Refinanced mortgage loans are not eligible (exceptions include, construction to permanent loans and bridge loans with an initial term of less than 24 months).

Eligible Borrowers

The total gross annual household income for all borrowers and spouses of borrowers living, or intending to live in the home, must be within the limits established for household income. Total gross annual household income is calculated using all sources of income including, but not limited to wages, overtime, bonuses, child support, alimony, commissions; and earnings from a second job; business and investments. Only first-time homebuyers and qualified Veterans may participate in the program. A qualified first-time homebuyer (and spouse) cannot have an ownership interest in a primary residence within the past three years.

Program Restrictions

  • IRS regulations limit the maximum sales price for properties.
  • IRS regulations limit the maximum income of applicants.
  • No properties in 100-Year floodplains are eligible for financing.
  • All applicants must be first-time buyers, with some exceptions.
  • Some restrictions may apply to the sale of the home.


MHDC has committed to continually fund loans in federally-targeted census tracts in certain counties throughout the state. Homebuyers do not have to be first-time buyers if they purchase homes in target areas. Generally, loans originated in target areas will receive priority for the lowest First Place Home Loan rate that has been offered by MHDC in the last 12 months. Qualified Veterans do not have to be first-time homebuyers. A qualified Veteran is any Veteran who served active duty and who applies for financing within 25 years after leaving active service.

Eligible Properties

The purchase price of a home financed through the program cannot exceed the established limits for Missouri properties. Properties eligible for loans include: Single-family detached duplexes (provided one unit is owner-occupied and the units are at least five years old), semi-detached, condominium, town home, modular or manufactured housing, permanently attached to a foundation, excluding mobile homes.

Loan Processing & Recapture Tax

Use familiar programs: FHA, USDA-RD, VA, Conventional Fannie Mae MyCommunityMortgage©. The borrower selects the type of loan they want to use, then apply and close when approved. The lender accepts the application, reserves funds, processes and approves the loan. At closing, the lender funds loan and provides the 4% Cash Assistance second mortgage loan funds to the borrower (if used). After closing, the lender submits files to MHDC and the Master Servicer. After approval by both, the Master Servicer pays the lender 100% of the unpaid principal balance, plus SRP. MHDC reimburses the lender for the Cash Assistance second mortgage loan (if used).

Recapture tax applies in some cases when a home financed with MRB funds is sold. For Recapture Tax to apply, you must meet all of the following conditions:

  • Sell the home within nine years;
  • Make a net profit on your home, after adjusting the value of the home for any improvements or repairs you have made, and after deducting all costs of sale, including sales commission; and
  • Your household income must have increased at least 5 percent each year (on average). Fear of paying recapture tax is not a viable reason for not utilizing the First Place program.

If you refinance your home at a later date to obtain a better interest rate, or access the equity you have in your home, Recapture Tax is not triggered. See section 5 of the operations manual for detailed information concerning the recapture tax.

Reserving a Loan

Interested borrowers must contact a certified lender. Funds are allocated on a first-come, first-serve basis. All questions about loan applications should be directed to the certified lender.