$50 million more for Missouri's first-time home buyer program

JEFFERSON CITY, Mo. -- A program that assists first-time home buyers in Missouri is getting a $50 million infusion of funds.

The "First Place Loans" program offers below-market interest rates and help with down payments and closing costs to households that make less than $57,000 to $65,550 a year. It is administered by the Missouri Housing Development Commission through a network of about 60 lenders.

Gov. Matt Blunt's office said Friday that it was allocating $50 million more in "private activity" bonds for the home loan program.

The state sells the bonds, generating money for homeownership loans and other projects.

The latest allocation brings total bonds for first-time home loans so far in 2006 to $260 million and increasing the number of home buyers that can be helped, Blunt's office said.

"This significant allocation of activity bonds will assist those first-time buyers with the rising interest rates and achieve their dreams of home ownership," Blunt said in a written statement.

But it still may not be enough to meet demand. The commission, headed by state Treasurer Sarah Steelman, had sought authority to distribute $75 million more, as higher interest rates have created a backlog of people wanting to use the program.

In the past, state officials easily authorized tax-exempt bonds to fund the program. But Greg Steinhoff, director of the Department of Economic Development, has said the state must consider the various interests wanting the bonds.

"The department is still seeing a very high demand for the private activity bond allocations, and we are trying to be fair," department spokeswoman Misti Preston said Friday.

In all, the department oversees allocation of $464 million in private activity bonds. Another big user is the Missouri Higher Education Loan Authority, which uses the money to offer breaks in student loans. Applications among various programs have sought a total of $682 million in bonds, Preston said Friday.

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On the Net:

Missouri Housing Development Commission: http://www.mhdc.com/