[ST. PAUL, MN] – On July 8, 2024, Minnesota state legislators announced applications for two Minnesota first-generation homebuyer down payment assistance programs. The programs will play a critical role in addressing Minnesota’s homeownership gap for households from marginalized communities.
With these funds, Minnesota Housing and the Midwest Minnesota Community Development Corporation (MMCDC) project will help 4,500 first-generation households purchase their first homes. They anticipate a majority of the homebuyers will be households of color, making the effort an important tool in closing the homeownership gap.
“I’m so proud that we were able to put $150 million toward helping first-generation homebuyers as part of the legislature’s historic investments of $1.3 billion for housing last year,” Rep. Agbaje said. “This is an incredible commitment.”
In May 2023, Governor Walz signed legislation creating two first-generation homebuyers' down payment assistance programs as part of the omnibus housing finance bill (HF 2335). The goal of both programs is to help more first-generation homebuyers access homeownership.
First-Generation Homebuyer Loan Program
Minnesota Housing’s program is available to Minnesota households in which the applicant and their parent(s) or legal guardian(s) never owned their primary residence in any country, or owned a home but lost it due to foreclosure and meet income requirements. Eligible recipients can receive up to $35,000. Half of the deferred, interest-free loan is forgiven after 10 years and the rest after 20. Homebuyers may be able to combine this program with a standard Minnesota Housing down payment and closing cost loan program, qualifying buyers for up to $53,000 in loans. The program has $50 million available.
First-Generation Homebuyers Community Down Payment Assistance Fund
The community program is available to Minnesota households in which the applicant and their parent(s) or legal guardian(s) never owned a home in any country, or owned a home but lost it to foreclosure and meet income requirements. Eligible recipients can receive up to 10 percent of a home’s purchase price, capped at $32,000. The zero-interest loan is fully forgiven after five years of owner occupancy (20% forgiven annually). The program has $100 million available.
The programs cannot be used together.
First-generation homebuyers seeking down payment assistance are encouraged to talk to a housing counselor or a mortgage lender about which program may work best for them.
###