 New Program Coming in 2024 for First-Generation Homebuyers
Minnesota Housing is excited to announce the First-Generation Homebuyer Loan Program offering downpayment assistance to first-generation homebuyers! We plan to launch the program in spring 2024.
Here’s what you need to know about the First-Generation Loan Program:
- Maximum loan amount of $35,000
- Forgivable if the borrower lives in the home
- Half forgiven at year 10
- Remaining balance forgiven at year 20
- Could be combined with a standard Minnesota Housing downpayment assistance loan, for a total of up to $53,000
- Available to Start Up borrowers who certify they are first-generation homebuyers
To learn more, visit the new First-Generation Homebuyer Loan webpage located in the Partner Portal. As the program launch approaches, we’ll update the page with training opportunities and additional information on the new program.
We will be creating a consumer page with more information on our First-Generation Homebuyer Loan soon. Stay tuned!
Reminder: Deferred Payment Loan Plus (DPL+) Targeting Criteria Update
- Effective for existing and new loans closed on or after December 4, when using the DPL+ front-end ratio of 28% or higher targeting criteria:
- If DPL+ funds are being used to reduce the first mortgage loan amount, you must factor that into the front-end ratio calculation to determine eligibility.
- If layering DPL+ with other DPA funds, ALL DPA funds that are being used to reduce the first mortgage loan amount must be factored into the front-end ratio calculation to determine eligibility.
- Before this update, the calculation was done without factoring in all applicable DPA funds into the housing ratio.
- The DPL+ Eligibility Worksheet has been updated with the revised calculation guidance. (Please note: If DPA funds are being used to reduce the first mortgage loan amount, make sure the P&I field and mortgage insurance field on this worksheet reflect the reduced first mortgage amount.)
- If this update negatively impacts a loan in process, please contact the Partner Solutions Team.
Reminder: Start Up Manual Updates
We made the following changes to Chapter 7 of the Start Up Program Procedural Manual, effective December 4, 2023:
- Clarified the lien position requirements:
- Monthly Payment Loan must occupy a second mortgage lien position.
- DPL/DPL+ must be placed in second lien position, except when the borrower is using a non-Minnesota Housing downpayment loan that requires second lien position.
- Added language around eligible and ineligible use of Minnesota Housing's downpayment and closing cost loan funds. Ineligible use of funds include:
- Value gap between the purchase price and the appraised value
- Seller’s closing costs
- Paying off debts
- Consolidated the guidance common to all Minnesota Housing downpayment and closing cost loans.
- Changed the DPL+ housing ratio targeting criteria calculation method factor in all DPA funds (as described in the eNews story above).
Monthly Update & Hot Topics Call
The Monthly Update & Hot Topics Call is open for everyone to attend, not just underwriters. During these calls we review recent Minnesota Housing updates and important information to help you originate and process our loans. Lenders are welcome to submit questions or topics to discuss on the call. This is a great venue to have more in-depth discussion on advance topics.
Calls occur on the second Thursday of the month from 9:00 a.m. - 10:00 a.m. central time.
Register for Upcoming December Call:
Monthly Training Webinars
Join Minnesota Housing for our monthly webinar series. These trainings lay out the basics of Start Up, Step Up, and our three Downpayment and Closing Cost loan options. These webinars also provide tips and best practices to help you successfully originate and close Minnesota Housing loans.
Questions?
You can reach the Partner Solutions Team at 651.296.8215 or 800.710.8871 between 8 a.m. and 5 p.m. on business days.
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