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First-Generation Homebuyer Loan Program is Now Open!
Minnesota Housing’s First-Generation Homebuyer Loan Program launched today, May 6. First-Generation Homebuyer Loan funds may now be added to new and existing locks for borrowers who meet the requirements of the First-Generation Homebuyer Loan. See the Lender Toolkit for the First-Generation Homebuyer Loan forms, resources, recorded Lender Training, and updated Start Up Procedural Manual for full details on the program and requirements.
Available for a limited time! The program has funding to serve approximately 1,500 eligible borrowers on a first-come, first-served basis. The program will be available until funds are exhausted.
The program offers loans up to $35,000 for downpayment and closing cost assistance. Borrowers are required to use a Start Up first mortgage loan to access the First-Generation Homebuyer Loan.
The loan is a deferred, interest-free and forgivable loan. Half of the loan is forgiven after 10 years and the rest after 20 years. To be eligible for forgiveness, the borrow must reside in the home through the forgiveness date and meet all the terms of the note.
Not for Investment Properties: Because residency for the whole term of the loan is required to be eligible for forgiveness, the First-Generation Homebuyer Loan is not a vehicle to purchase a home, live in it temporarily, and then rent it out. The First-Generation Homebuyer Loan balance becomes due immediately and in full when the property converts to non-owner-occupancy, or if the borrower sells or refinances the home.
Who is a first-generation homebuyer?
Borrowers may qualify as a first-generation homebuyer if one borrower and their parents or legal guardians:
- Have never owned a home (in any country) OR
- Owned a home but lost it due to foreclosure
Important: Fannie Mae and Freddie Mac's definition of a first-generation homebuyer and their Form 1109 First-Time Homebuyer Certification does not apply to our program - even for Start Up borrowers using a Fannie Mae or Freddie Mac first mortgage product. At least one borrower using the Minnesota Housing First-Generation Homebuyer Loan must meet Minnesota Housing's definition of a first-generation homebuyer and sign Minnesota Housing's First-Generation Homebuyer Affidavit.
For details on the first-generation homebuyer definition see the Start Up Procedural Manual and First-Generation Homebuyer Affidavit.
Is Minnesota Housing's program the same as the First-Generation Homebuyers Community Down Payment Assistance Fund?
Minnesota Housing's First-Generation Homebuyer Loan Program is different from the First-Generation Homebuyers Community Down Payment Assistance Fund.
Borrowers cannot combine Minnesota Housing’s First-Generation Homebuyer Loan with the First-Generation Homebuyers Community Down Payment Assistance Fund. The goal of both programs is to help more first-generation homebuyers access homeownership.
The First-Generation Homebuyers Community Down Payment Assistance Fund is not yet available. Visit firstgendpa.org to stay up to date on when the First-Generation Homebuyers Community Down Payment Assistance Fund will become available.
Where can I find out more?
Questions?
Contact the Partner Solutions Team at mnhousing.solution@state.mn.us, 651.296.8215 or 800.710.8871.
Document Updates Effective Today
We updated the Start Up Procedural Manual and Step Up Procedural Manual with program changes.
What changed?
See Summary of Changes: Start Up | Step Up Procedural Manuals and Borrower Affidavit for a detailed overview. High level overview of changes included below.
Start Up Procedural Manual updates and additions:
- Chapter 7: First-Generation Homebuyer Loan Program as another downpayment assistance loan option
- Chapter 4: Clarified First-Time Homebuyer eligibility criteria relating to spousal ownership history and previous manufactured home ownership
- Chapter 5: Added clearer guidance on eligible property types and eligible forms of ownership
- Chapter 2: Sections on Fraud, Conflict of Interest, Suspension, and Disclosure and Reporting
Step Up Procedural Manual updates and additions:
- Chapter 5: Clearer guidance on eligible property types and eligible forms of ownership
- Chapter 2: Updated the sections on Fraud, Conflict of Interest, Suspension, and Disclosure and Reporting
Borrower Affidavit (Start Up) Update
- We updated the Borrower Affidavit (Start Up) to align with the Start Up Procedural Manual. The updated Borrower Affidavit (version date 4/10/2024) must be used for all loans closed on or after 5/6/2024. For lenders not generating documents from the Minnesota Housing commitment system, document managers were notified separately regarding these document changes.
What changed?
See Summary of Changes: Start Up | Step Up Procedural Manuals and Borrower Affidavit for a detailed overview. High level overview of the Borrower Affidavit changes included below.
- Updated language in section #8 related to First-Time Homebuyer eligibility
- Updated the signature section
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.
About Minnesota Housing
Minnesota Housing, the state’s housing finance agency, works to provide access to safe, stable and accessible housing Minnesotans can afford in a community of their choice. In 2023, the Agency distributed $1.85 billion in resources and served 69,500 households. Visit our website to learn more.
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