DOWN PAYMENT ASSISTANCE RULES AND GUIDELINES
The rules and guidelines for Minnesota Housing Finance Agency (MHFA) first time home buyer down payment assistance programs in MN are a bit overwhelming for most potential new home owners.
We suggest you don't try to figure it out yourself... Rather, simply call us at (651) 552-3681, or fill out a full online application. Our licensed professional Loan Officers will review the application, zero in on the best loan for you, then contact you to discuss your options, all with NO COST and NO obligations whatsoever.
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STEP ONE - INCOME GUIDELINES
Valid as of May 22, 2014
You must meet the following household income eligibility guidelines. This is all income for those living in the home, not just whoever is applying for the loan.
| AREA | 1-2 people | 3+ people | |
|
Maximum allowable income |
Metro | $82,900 | $95,355 |
| Rochester Area | $81,300 | $$93,495 | |
| Balance of State | $73,900 | $84,985 |
STEP TWO - HOME COST / LOAN LIMITS
The home must cost less than the following:
| Home Costs / Loan Limits | ||
|
Property Location |
11 County Metro Area | Balance of State |
| $310,000 | $265,000 | |
STEP THREE - Determine which type of down payment assistance you can obtain.
There are two down payment assistance options.
- A deferred loan, where there are no payments due, and no interest due today. The loan must be paid back when you sell or no longer occupy the home. This option requires additional income limits (see below)
- A monthly payment loan. You must begin paying this loan back immediately, amortized over a 10-year period. This option is available to everyone who qualifies for the MHFA program.
Your income must be at or below these income limits for the deferred down payment assistance program option. (as of 4/1/14)
| Household Size | 11-County Twin Cities Metro Area* | Rochester MSA** | Balance of State |
|---|---|---|---|
|
1-4 Person |
$60,000 |
$60,000 |
$55,000 |
|
5 Person |
$64,800 |
$64,800 |
$59,400 |
|
6 Person |
$69,6000 |
$69,600 |
$63,800 |
|
7 Person |
$74,4000 |
$74,400 |
$68,200 |
|
8 Person |
$79,2000 |
$79,2000 |
$72,600 |
|
9 Person |
$84,000 |
$84,000 |
$77,000 |
|
10 Person |
$88,8000 |
$88,800 |
$81,400 |
STEP FOUR - Down Payment Loan Options
View the three assistance qualification options below:
|
Key Features |
Monthly Payment Loan |
Deferred Payment Loan |
HOME HELP Loan |
|---|---|---|---|
|
Loan Amount |
Up to the greater of $5000 or 5% of the purchase or refinance price | Up to the greater of $5000 or 5% of the purchase price (max $7500) | Up to the greater of $5000 or 5%, with as much as $10,000 based on special needs |
|
Loan Term |
10-year term | Equal to first mortgage term | Equal to first mortgage term |
| Borrower Contribution | Borrower must contribute $1,000 or 1% of the purchase price, whichever is less | Borrower must contribute $1,000 or 1% of the purchase price, whichever is less | Borrower must contribute $1,000 or 1% of the purchase price, whichever is less |
|
Repayment |
Amortizing loan. Requires a monthly payment repaid in equal payments beginning right away | Deferred payment. Does not require monthly payments, but must be paid in full upon satisfaction of first mortgage | Deferred payment. 50% of the loan forgiven after sixth year of owner occupancy. 50% repaid at end of loan term |
|
Interest Rate |
Equal to first mortgage rate | Interest-free | Interest-free |
|
Income Limits |
Use Start Start Up/Mortgage Credit Certificate/Step Up/Monthly Payment Loan Income Limits | Deferred Payment Loan income limits (see above) | HOME HELP Loan income limits |
| Required | Required | Required | |
|
First-time Homebuyer Requirement |
No | Yes | Yes |
|
Available with which Minnesota Housing first mortgage program(s)? |
|
Start Up | Start Up from a Minnesota Housing lender approved to offer HOME HELP |
STEP FIVE - APPLY for your Down Payment Assistance Loan in MN
Appling is super easy.
Simply call our office at (651) 552-3681, or start by filling out the easy online mortgage application. We will review your application, determine what, if anything you qualify for, write you a pre-approval letter, and get you connected with a great Real Estate Agent to start searching for your dream home!