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Program Changes Coming March 3 & FAQs
The program changes announced in the February 11 eNews will go into effect for all loans committed on or after March 3, 2025. Loans locked in the Minnesota Housing commitment system prior to March 3 are not impacted by the changes regardless of the closing date. As a reminder, you must have an executed purchase agreement before locking a loan in our system. You cannot lock TBD properties.
See the February 11 eNews, recorded Critical Lender Update, Homeownership Program Changes webpage, revised Start Up and Step Up Procedural Manuals (effective March 3, 2025), and the FAQ below for details.
Frequently Asked Questions:
Q: Which downpayment loan options require a 28% minimum housing ratio?
A: Just Deferred Payment Loan (DPL) and Deferred Payment Loan Plus (DPL+). The 28% minimum housing ratio doesn’t apply to Monthly Payment Loan (MPL).
Q: Is the 28% minimum housing ratio requirement for DPL and DPL+ based on the program eligibility income or the loan qualifying income?
A: The housing ratio is based on the loan qualifying income. You still need to calculate the program eligibility income to make sure the borrower is within the program income limits.
Q: Which Minnesota Housing programs are first mortgages and which are second mortgages?
A: Start Up and Step Up are first mortgages. DPL, DPL+, and MPL are second mortgages. (See Start Up and Step Up manual for lien position guidance.)
Q: What income limits apply to the Monthly Payment Loan?
A: The Monthly Payment Loan with Start Up follows the income limits for Start Up. The Monthly Payment Loan with Step Up uses the new income limit for MPL with Step Up.
Q: What income limits apply to the Step Up Loan if the borrower isn’t getting a Monthly Payment Loan?
A: The Step Up first mortgage limits for borrowers getting the first mortgage only (no MPL) have not changed. See Income Limits page.
Q: I see the First-Generation Homebuyer criteria is back. Is that a separate loan with DPL+ if you complete the First-Generation Homebuyer Affidavit?
A: No. First-Generation homebuyer status is now one of the four DPL+ targeting criteria that must be met to get the larger loan amount available under DPL+. If you are using the First-Generation Homebuyer DPL+ targeting criteria, at least one borrower must fully complete the updated First-Generation Homebuyer Affidavit, and you must include it in the closed loan package.
Q: Is a borrower’s contribution to the downpayment included in the $2,500 “spend down” allowed for the DPL/DPL+ asset limit?
A: The borrower’s contribution towards the downpayment is not limited and is excluded from the limited $2,500 spend down allowed for paying down the borrower’s existing debts.
Reminder: Updated eSignature Policy
In addition to the program changes mentioned above, the updated Start Up and Step Up Procedural Manuals contain a revised eSignature policy as well as a new Legal Addendum (Appendix C in the manuals).
Effective March 3, 2025:
Minnesota Housing accepts documents that are signed electronically. Under no circumstances may a borrower or co-signer be required to sign a document electronically. The following criteria must be met:
- Must follow all requirements set forth by state and federal law
- Must follow all counterparty requirements (U.S. Bank, GSE, FHA, VA/RD)
- See Allregs for details on U.S. Bank’s eSignature requirements.
- Note: Questions about Remote Online Notary (RON) can be directed to U.S. Bank
For full language see Chapter 9.3 in the updated Start Up and Step Up Procedural Manual (effective March 3, 2025).
2025 Monthly Training Webinars
The Monthly Update & Hot Topics Call is open for everyone to attend. 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.
Register for the 2025 calls.
When you register, you will be signed up for all sessions in the series but can attend the sessions that work for you. Most calls occur on the second Thursday of the month from 9 a.m. - 10 a.m. Central time.
2025 Schedule:
- March 13
- April 10
- May 8
- June 12
- July 10
- August 14
- September 11
- October 9
- November 13
- December 11
Monthly Update & Hot Topics Call
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.
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 2024, we distributed $1.96 billion in resources and served 73,650 households. Visit our website to learn more.
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