The rental market is growing increasingly competitive in the Twin Cities, but for the first time home buyer Minnesota is a very friendly place. A report from WCCO indicates that, in many cases, buying is the more affordable option, especially as apartment vacancy rates are so low. However, many Minnesota renters remain unaware of just how affordable home ownership can be. If you’re considering the prospect of buying your first home, you’ll definitely want to look into these excellent first time home buyer Minnesota programs:
What Is the Start Up Mortgage Program?
The popular Minnesota-based mortgage program Start Up is primarily designed for first-time homeowners, although program participation is available for anybody who has not owned a principle residence in the last three years. Start Up offers exceptionally low interest rates and several options for covering the costs of down payments and closing.
Unfortunately, not everybody is eligible for Start Up’s mortgage program. Income restrictions have been instated based on household size and location. Additionally, prospective homeowners financed through Fannie Mae’s HFA Preferred, Preferred Risk Sharing, or Advantage programs must complete homebuyer education courses. The most convenient of the approved courses is easily Framebuyer, which allows participants to complete required coursework online.
What Is the Mortgage Credit Certificate Program?
Many prospective homebuyers express reluctance to leave the rental market because they worry about the added cost of property taxes. However, home ownership can actually prove very beneficial for tax purposes. Minnesota’s Mortgage Credit Certificate (MCC) program allows some borrowers to claim a significant percentage of each year’s mortgage payments as a federal income tax credit. Through participation in this program, many homeowners are able to save up to $2,000 during tax season. Restrictions are instated based on the value of the home; Twin Cities homes valued at over $307,300 are not eligible, nor are homes valued at $258,600 in the rest of the state. Additionally, the MCC credit is only available to those with an annual income below $99,500.
Which local incentive programs are available in the Twin Cities?
In addition to the statewide Start Up program and the tax credits provided through MCC, aspiring Minnesota homeowners can take advantage of several local incentive programs. The following are just a few of the many regional options available for Minnesota homebuyers:
Brooklyn Park Homebuyer Programs
The city of Brooklyn Park has partnered with multiple local developers to rehabilitate local vacant and foreclosed homes — and to offer an affordable home buying solution for prospective homeowners. Through participation in the city’s homebuyer programs, homeowners can receive assistance of over $7,500. Although program participants need not be first-time homebuyers, they cannot own any other Twin Cities property. The city’s Bridge to Success program is ideal for those with past credit issues. This program allows participants to refinance Contracts for Deed into conventional fixed-rate loans within four years.
Twin Cities Habitat For Humanity Homeownership
Twin Cities homeowners willing to put in a little time and sweat can be rewarded with significant financial assistance. The Twin Cities Habitat For Humanity Homeownership program emphasizes sweat equity, through which participants volunteer at construction sites or attend homeowner training sessions. These participants are then able to either purchase homes constructed by Habitat For Humanity volunteers or invest in houses on the open market. The program has few credit limitations, but participants must earn 30 to 80 percent of the average income for Twin Cities families. All participants undergo extensive financial counseling and homeownership education.
Are there homeowners incentive programs available in Greater Minnesota?
The home buying market in the Twin Cities may be booming, but not all aspiring homeowners wish to live in the metro area. Fortunately, there are several excellent options throughout Greater Minnesota, where the home prices are far more forgiving than in Minneapolis, St. Paul, and the surrounding suburbs.
Arrowhead Economic Opportunity Agency, Inc. Home Ownership Program
The Arrowhead Economic Opportunity Agency, Inc. (AEOA) promotes home ownership in Lake, Cook, and St. Louis Counties by providing loans that cover both down payments and closing costs. In order to qualify for financial assistance through AEOA’s program, first-time homeowners must complete required Home Stretch workshops and undergo extensive one-on-one counseling.
St. Cloud Homestead Incentive Program
The city of St. Cloud aims to improve local homeownership rates through the St. Cloud Homestead Incentive Program, which provides qualified buyers with deferred interest loans of up to $3,000. These loans can be used to cover down payments and closing costs. Qualified buyers must meet household income requirements and must purchase homes within St. Cloud’s core neighborhoods, which include Colonial Gardens, West End, Northside Hester Park, and several other communities.
Three Rivers Community Action Down Payment Assistance
An excellent option for southeast Minnesota residents, Three Rivers Community Action’s Down Payment Assistance program allows buyers to secure up to $18,500 in zero percent interest loans, with payments not due until qualified homes have been sold or refinanced. The program primarily targets underserved populations, including minority homebuyers and those who earn below 80 percent of the state’s median income. In order to qualify, buyers must secure long-term fixed interest mortgages and complete the program’s nine-hour Home Stretch class.
From low interest mortgages to down payment assistance, there are numerous options for aspiring homeowners who wish to settle down in the state of Minnesota. Local and statewide programs can make homeownership significantly more affordable than renting and are thus worth taking advantage of for middle and low-income first-time homebuyers.
2 Point Highlight
1. In many cases, buying is more affordable than renting in Minnesota, in part because apartment vacancy rates are so low.
2.  There are several excellent home ownership assistance programs throughout Greater Minnesota, where the home prices are far more forgiving than in Minneapolis, St. Paul, and the surrounding suburbs.
