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Continued: More cash to help buyers stake a claim

  • Article by: LYNN UNDERWOOD , Star Tribune
  • Last update: May 23, 2008 - 11:01 AM
Minnesota's new homesteaders -- low- to moderate-income working families, minorities, seniors and households headed by single women -- are a boon for the slumping housing market and communities statewide. That's why two new loan programs have been created to help these "emerging market" households become successful homeowners over the long term. In addition to those financing assistance programs, there are educational seminars on home purchase help programs, and the Emerging Markets Homeownership Initiative (EMHI) aims to boost home ownership among minority and immigrant households. That assistance helps low-income "new homesteaders" get into homes and can revitalize areas hit hardest by foreclosures. For example, the newest pilot city program, Minneapolis Advantage, offers a $10,000 loan toward a single-family home or duplex in designated neighborhoods that becomes a grant if the homeowner stays in the house at least five years. "The loans are for people who want to help rebuild these neighborhoods," said Suzanne Snyder, program director for Greater Metropolitan Housing Corp. "There is some great housing stock and active communities."

A look at two new home buyer assistance programs and resources by the Emerging Markets Homeownership Initiative designed to help Minnesota's "new homesteaders":

MINNEAPOLIS ADVANTAGE

Agency: Greater Metropolitan Housing Corp. Goal: Incentive to buy homes in specific Minneapolis neighborhoods that have been affected by foreclosures.

Features: Interest-free loan of $10,000. May be used toward a down payment and/or closing costs, home repairs on a single-family home or duplex. The home must be in an eligible neighborhood and on a block that has a foreclosed property or has a home that is on the city's vacant and boarded buildings list. May be combined with other home-buyer assistance programs.

Who's eligible? Anyone who can qualify for a fixed-rate prime mortgage. No income or purchase price limits. Does not have to be a first-time home buyer. Home Stretch home-buyer education class is required.

Loan repayment: After five years the loan is forgiven at a rate of 20 percent per year based on the home buyer living there as their principal residence. After five years, the homeowner owes nothing and has $10,000 equity in the property.

When available: Accepting applications now. Information: Call the Northwest Housing Resource Center, 612-588-3033, for an application. A map of eligible neighborhoods can be downloaded at www.ci.minneapolis.mn.us/cped.

HOME HELP (HOMEOWNERS ENTRY LOAN PROGRAM)

Agency: Minnesota Housing Finance Agency. Goal: "Cash to close" assistance to help low- to moderate-income buyers purchase a home. The agency is especially reaching out to people of color and the immigrant community with TV ads and other marketing.

Features: Interest-free; maximum loan amount is $14,999, based on need. May be applied toward a down payment and/or closing costs and prepaid expenses. The maximum purchase price of a Twin Cities metro-area home is limited to $276,683 ($200,160 elsewhere in Minnesota). Loan recipients are encouraged to buy houses in neighborhoods affected by foreclosures. Rental properties and condos or townhouses built before 1978 are ineligible. Home Stretch home buyer education class is required. HOME HELP replaces the popular ADDI (American Dream Downpayment Initiative) and provides a higher loan amount. Minnesota Housing has $9.2 million in state and federal funds committed to the program for the next two years. It may be layered with other home buyer assistance loans, depending on the funding source.

Who's eligible? First-time home buyers who meet income requirements.

Borrower investment: $1,000.

Loan repayment: The loan is forgiven at 14 percent per year over five years. After that the balance of 30 percent is to be paid upon sale or transfer of property, maturity of the first mortgage or if the home isn't owner-occupied.

When available: June 16. Information: www.mnhousing.gov, click on the HOME HELP link (includes a list of approved lenders) or call 651-296-8215.

EMERGING MARKETS HOME OWNERSHIP INITIATIVE (EMHI)

What is it? A statewide initiative launched in 2004 that develops programs and resources to help mortgage and real estate professionals and government agencies effectively work with the growing ethnic population.

Goal: To increase the home ownership rate in Minnesota's minority communities and have 40,000 new emerging-market homeowners by 2012. "It's a community investment strategy. People who own homes pay property taxes, maintain their property and make sure their communities stay vital and prosper," said Shawn Huckleby, EMHI director. "It's also a business opportunity for Realtors and lenders."

Home buyer resources: A recently published comprehensive Home ownership Guide can be downloaded at www.emhimn.org. or call 651-203-7254. There will be a Spanish version in mid-June with plans for a Somali version.

Industry education classes: An "At Home With Diversity" class for real estate agents is available, as are statewide training workshops for agents and lenders on mortgage assistance programs in rural areas.

Lynn Underwood • 612-673-7619

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