This program has been available for some time but I just learned about it this summer! A client of mine asked about it and I did some research for him. Then another client called and asked if I could do this program as he was having problems with his current lender – I did more research and was able to help him! This is an awesome program if you can qualify for it!
The program's goals are to assist low and moderate income households to purchase homes within the city of Eden Prairie by providing assistance with down payment, closing costs and principle reduction. They also want to promote responsible home ownership.
The program allows for financial assistance to be used for:
- Pay up to 50% of the amount of the homebuyer provides for down payment (not to exceed $5,000).
- Pay up to 100% of the eligible closing costs not to exceed $5,000. Borrowers may not use the funds to buy down the interest rate. Any optional insurances are not eligible, such as owner's title insurance.
- Reduce the mortgage principal by up to 10% of the purchase price to a maximum of $20,000. The applicant's housing debt to income ratio must be at least 25%, but can not exceed 37% of their gross monthly qualifying income.
The financial assistance will be provided at a minimum of $3,000 and a maximum amount of $25,000. The assistance is in the form of a no interest deferred payment loan that is due and payable 30 years from the purchase date or when the home is sold, transferred or no longer the primary place of residence, whichever occurs first.
You have to be a first time homebuyer to use the program. You also have to meet income guidelines. The income limits vary based on the number of people in the household. There is a required first time homebuyer class. You have to invest at least $1,000 of your own money into the transaction.
The client that I just worked with was able to get almost $17,000 in down payment assistance – that really helped him qualify for the home he wanted and kept his house payment where he needed it to be! The program was easy to work with and my client now has a new place to call home! They were very excited at their closing.
There are other cities that have similar programs. Edina, Plymouth, Woodbury and Brooklyn Park have some first time homebuyer programs, Minneapolis has different programs available depending on the area of Minneapolis. If you are a first time homebuyer, you may want to see if the city or county you are buying in has some type of assistance to help you buy your first home!