City of Kansas City, Missouri
KC Dream Homeownership Program
Program Outline
Purpose:
The KC Dream Homeownership Program assists low and moderate income first-time homebuyers, displaced
homemakers, and single parents purchase a home of their choice within the city limits of Kansas City, Missouri. The
program provides homeownership opportunities to people who may otherwise lack the resources to participate in the
pursuit of their American Dream.
Types of Assistance Available
Assistance will be provided in the form of a 2nd mortgage loan equal to 20% of the purchase price, with a maximum of
$20,000 per home for down payment and closing costs. Loans will be underwritten at 0% interest and would be
forgivable after the owner has owned and lived in the house for 10 years. No monthly payments are required. HUD
Recapture provisions will apply to homes sold or re-financed without City approval prior to conclusion of the affordability
period. The City will provide funds for this program through HUD’s American Dream Down payment Initiative Program
and the Home Investment Partnership Act (HOME) Program.
Minimum Requirements
Applicants must meet income eligibility requirements, homeowner eligibility requirements, and purchase a home meeting
program requirements. The City will not establish any minimum underwriting requirements regarding the consumer’s
down payment or out-of-pocket expenses. The underwriting criteria and programs already in use by most of the City’s
lenders are well-established and suited for first-time homebuyers.
Property Eligibility
Houses must be located within the city limits of Kansas City, Missouri. The sales price of the home must not exceed
$150,000.00 and the purchase price must not exceed the appraised value. For additional details, please contact the
following person:
Coleman McClain
City of Kansas City Missouri
414 E. 12th Street, 14th Floor
Kansas City, MO 64106
Phone 816-513-3008
FAX 816-513-2808
Email: coleman_mcclain@kcmo.org
Household Income Limits
Participants in this program must comply with income guidelines established by the United States Department of Housing
and Urban Development in accordance with Section 3(b)(2) of the U.S. Housing Act of 1937, as amended. Families with
household incomes of 80 percent of median income or less based on family size qualify for this program. Currently,
maximum incomes are as follows:
Maximum Income Limits
1 Person 38,300.00
2 Persons 43,800.00
3 Persons 49,250.00
4 Persons 54,700.00
5 Persons 59,100.00
6 Persons 63,500.00
Eligible Homebuyer Definitions
Due to the nature of funding utilized for this program, it is necessary to identify first time buyers that access this
program.
The City’s Housing Program provides homeownership opportunities to low and moderate income first-time home buyers,
displaced homemakers, and single parents. First-time homebuyers are defined as people who have not owned a home
in three (3) years.
• Displaced Homemakers are defined as follows:
• Is divorced adult; and
• Did not work in the labor force for a number of years but has, during such years worked primarily without direct
compensation to care for the family; and
• Is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment; and
• While married, owned a home with his/her spouse and the residence was awarded to the spouse or was required
to be sold as part of the divorce settlement.
• Single Parents are defined as follows:
• Is divorced from a spouse; and
• Has one or more children for whom the individual applying for the loan has custody or joint custody (must be
majority parent custody; or is pregnant; and
• While married, owned a home with his/her spouse and the residence was awarded to the spouse or was required
to be sold as part of the divorce settlement.
KC Dream Homeownership
Lending Procedures:
Approved Loan Products
• Must be full amortizing, no balloon loans
• Interest rate and fees must be reasonable and customary to the market; in no case shall the interest rate exceed
the then current MHDC First Place Cash Assistance Payment (CAP) interest rate by more than 1%
• The City will review HUD statement for unreasonable charges
• Adjustable rate mortgages are not allowed
• Interest only loans are not allowed
• All loans must be FHA, VA, and Conventional loans.
Approved Lenders
The City will enter into a contractual arrangement with lenders familiar with HUD programs and loans of this type. The
initial pool of lenders will be drawn from lenders currently certified by MHDC as “First Place” lenders, or who have met
similar participation requirements. Only lenders approved by the City can participate in this program.
Loan Processes
The City will provide training to all lenders participating in the program. Lenders under contract with the City will use
their normal underwriting guidelines in conjunction with HUD income eligibility requirements for the first and second
mortgage. The City will make available ADDI and HOME funds to either fund at closing or reimburse the lender for
funding the second mortgage. Participating lenders will underwrite and close both loans upon approval by the City.
Prior to initiating a loan application, approved lenders must request via email or FAX the availability of funds from the
City’s Housing Division. Lenders must reserve funds with the City prior to approving a loan application. Prior to loan
approval, lenders must send by courier loan documents to the City for verification of income, property eligibility, and
conformity to HOME regulations. The City will not underwrite these loans, but will review loan applications to verify
documentation. City staff will process submitted loan applications and provide a response to the Lender within 4
business days.
Contact Information
If you are interested in learning more about this program or in locating eligible program houses currently for sale, please
contact the following person:
Coleman McClain
City of Kansas City Missouri
414 E. 12th Street, 14th Floor
Kansas City, MO 64106
Phone 816-513-3008
FAX 816-513-2808
Email: coleman_mcclain@kcmo.org
City Website: http://www.kcmo.org/planning.nsf/web/kcdream
Doug Lyman
Lyman Staton Group
Reece and Nichols
7600 State Line Road, Ste. 210
Prairie Village, KS 66208
Phone: (913) 219-1006
Fax: (913) 383-9180
www.HomeSoldQuick.com
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