New Minnesota Housing Mortgage Loan Programs – not just for First Time Homebuyers!
Through the Minnesota Housing Finance Agency (MFHA), the State of Minnesota offers eligible homebuyers loans with subsidized interest rates and mortgage insurance for low-to-moderate income homebuyers, that is correct, it is not just for first time homebuyers anymore!
Start Up is the new Minnesota Housing statewide mortgage loan program for low-to-moderate income first-time homebuyers. Click here for detailed information on Start Up (first-time homebuyer loan program).
Step Up is a new Minnesota Housing loan program for non-first-time homebuyers to purchase or refinance a home. The program offers affordable fixed-rate loans and access to down payment and closing cost loan options for eligible borrowers through participating lenders. Click here for detailed information on Step Up (non-first-time homebuyer loan program).
Minnesota Housing Current Interest Rates posted daily, Monday – Friday. Click here to view current rate quote.
Are you eligible for a Minnesota Housing mortgage loan?
Start Up and Step Up each have qualifying guidelines, but to be eligible and get the process started, borrowers must meet the following minimum requirements:
- For Start Up: Be a first-time homebuyer, meaning you have not owned a home in the past three years (This does not apply for Step Up)
- Meet credit score and debt-to-income (DTI) ratios
- 640-659 credit score and maximum DTI of 45%
- 660+ credit score and maximum DTI of 50%
- Meet household income limits: click here to view income limits.
- Buy a qualifying home within prescribed home price limits as follows:
- 11-County Twin Cities Metro Area – $298,125
- Balance of State – $237,031
Minnesota Housing offers three different types of loans to help with down payment and closing costs:
- Monthly Payment Loan – available to Start UP and Step UP
- Deferred Payment Loan – available to Start UP only
- HOME Homeowner Entry Loan Program (HOME HELP) loan – available to Start UP only
What are the basic differences between the three programs?
|
Key Features |
Monthly Payment Loan |
Deferred Payment Loan |
HOME HELP Loan |
|
Loan Amount |
Up to 5% of the purchase price, or $5,000, whichever is greater | Up to 3% of the purchase price, or $3,000, whichever is greater | $5,000 to $10,000 based on need |
|
Loan Term |
10-year term | Equal to first mortgage term | Equal to first mortgage term |
|
Repayment |
Amortizing loan program. Requires a monthly payment repaid in equal payments | 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 Program Income Limits for the first mortgage program used, either Start Up or Step Up, of if using an FHA loan, you must qualify under the FHA Income Limits | Deferred Payment Loan income limits | HOME HELP Loan income limits |
|
Credit Score and Debt-to-income |
Must meet credit score and debt-to-income requirement for the first mortgage program used, either Start Up or Step Up | Must meet credit score and debt-to-income requirement for Start Up | Must meet credit score and debt-to-income requirement for Step Up |
|
Homebuyer Education |
Required | Required | Required |
|
First-time Homebuyer Requirement |
No | Yes | Yes |
|
Available with which Minnesota Housing first mortgage program(s)? |
Start Up or Step Up | Start Up | Start Up from a Minnesota housing lender approved to offer HOME HELP. |
Where can you get your Homebuyer Education?
Homebuyer Education class must be completed by at least one of the mortgage applicants. You can find a class to attend at the Homeownership Center Website at, http://www.hocmn.org/en/index.cfm or you can take the approved online homeownership class at http://www.frameworkhomeownership.org/
We are trained participating lenders of the MN Housing Programs, and your best option is to contact one of us today, to help you through the qualification process.
Related Articles:
- Different Mortgage Types and What They Mean to Buyers and Sellers in a Competitive Market
- You’re A First Time Homebuyer? So What!
- New Minnesota Housing Mortgage Loan Programs – not just for First Time Homebuyers!
- First Time Homebuyers – OK, Now What?
- Seller Contributions Towards Closing Costs on a Home Purchase
- FHA vs. Fannie Flex 97 for Low Down Payment Buyers
- Ready To Sell That Flip? Not So Fast, Big Guy…
- Monthly Private Mortgage Insurance – It Doesn’t Make Any Sense. . .
