Minneapolis offers $10K for home buyers
200 forgivable 0% interest loans to rebuild housing market
April 7, 2009 (MINNEAPOLIS, MN) Mayor R.T. Rybak and City leaders today announced that applications are open for Minneapolis Advantage.
"Now is the perfect time to buy a home in Minneapolis," said Mayor R.T. Rybak. "Not only are homes affordable and interest rates low, but the City of Minneapolis can help you with $10,000 for closing costs and down-payment assistance. This incentive will put people back into homes in communities hit by foreclosure, creating a stronger sense of community."
"The key to rebuilding neighborhoods overwhelmed by foreclosures is to get solid, responsible homeowners into these neighborhoods," Mayor Rybak added. "There are great homes to be had and people are ready to move into these neighborhoods. Our job is to help make that happen and these loans will make our job a whole lot easier."
"Homeownership incentives help not only those looking for a home, but also help to market the neighborhoods and the amenities of living in Minneapolis," said Council President Barbara A. Johnson (Ward 4). "Given the program’s guidelines, only stable homebuyers with an approved traditional, fixed-rate mortgage will be able to move into these neighborhoods. That way we can strengthen these blocks with solid home-owners."
"Minneapolis is fortunate to have developed strong partnerships with both the public and private sectors that are helping the City rebuild, reposition and restore a healthy housing market in neighborhoods most distressed by the foreclosure crisis," said Tom Streitz, Director, Housing Policy and Development, City of Minneapolis.
The Minneapolis Advantage program, in addition to rebuilding neighborhoods impacted by foreclosure, also promotes sustainable home ownership and stabilized communities. Every potential homeowner must also complete a counseling workshop that prepares buyers for the important choices related to home ownership. The Minneapolis Advantage program is funded by the City of Minneapolis and the Federal Home Loan Bank of Des Moines. The successful program, piloted in 2008, has already allowed 50 homebuyers to purchase in the city.
Minneapolis Advantage program details
• Purchasers must have an income of less than 120% of the area median income ($97,080) and the property must be the purchaser’s primary place of residence.
• Purchasers must receive a traditional (prime or A-rated), fixed-rate first mortgage loan or purchase with cash.
• A loan of $10,000 at zero-percent interest is forgiven at the end of five years if the purchaser continues to occupy the home as a primary place of residence.
• The loan can be used as assistance with down payment, closing costs, and home repair costs.
• The property can be a single family dwelling or duplex within an eligible neighborhood.
• Two options, depending on income limits, are available:
1. For incomes below 80% area median income:
Purchase of a foreclosed home in the following neighborhoods: Bryant, Sheridan, Lind-Bohanon, Ventura Village, Whittier, Audubon Park, Holland, Phillips West, Cleveland, McKinley, Harrison, Powderhorn Park, Webber-Camden, Midtown Phillips, Folwell, Near North, Central, Willard-Hay, Jordan, Hawthorne, East Phillips, Beltrami.
2. For incomes below 120% area median income:
Purchase of a foreclosed home or a home on the City’s 249 vacant and boarded buildings list, OR a vacant home for at least 30 days in the following neighborhoods: Corcoran, Bottineau, Regina, Victory, Bryant, Sheridan, Lind-Bohanon, Ventura Village, Whittier, Audubon Park, Holland, Phillips West, Cleveland, McKinley, Harrison, Powderhorn Park, Webber-Camden, Midtown Phillips, Folwell, Near North, Central, Willard-Hay, Jordan, Hawthorne, East Phillips, Beltrami.
Home buyers must apply for a Minneapolis Advantage loan through their first mortgage lender. Loans will be given on a first come, first serve basis. For more information about the loan program call Greater Metropolitan Housing Corporation at 612-588-3033.
Questions about purchasing in:
• North Minneapolis, call 612-588-3033
• Northeast Minneapolis, call 612-378-7985
• South Minneapolis, call 612-378-7985
Questions about purchasing in:
• North Minneapolis, call 612-588-3033
• Northeast Minneapolis, call 612-378-7985
• South Minneapolis, call 612-378-7985
Information is also available online at Minneapolis Advantage.
Results of the pilot Minneapolis Advantage program, launched in May 2008
The Minneapolis Advantage program has effectively encouraged people to buy homes in communities stressed by foreclosures:
Properties Purchased:
• 62% of the pilot project loans purchased foreclosed properties and 9% of the loans purchased boarded and vacant properties.
• 62% of the properties, registered as non-homestead prior to being purchased, now have a homestead status.
• The pilot program had a mix of purchase prices, but more than 50% of the buyers bought homes under $100,000 and 82% purchased homes under $150,000.
• Half of the eligible neighborhoods were in North Minneapolis; 80% of the homes purchased were located there.
Map of Properties Purchased Using the Minneapolis Advantage pilot program
Buyers:
• Since home prices were low, the program made home buying affordable. Even though there were no income restrictions, 76% of the buyers were at 80% MMI or less.
• The majority of the buyers were younger, with 57% younger than 36 years old.
• 78% of the buyers were first-time homeowners.
• 65% of the homeowners are White (not Hispanic); 13% are African-American; 19% are Asian; 3% are of two or more races.
• Nearly 30% of the households moved from the suburbs or Saint Paul, and of those, 95% moved to the eligible North Minneapolis neighborhoods.
Published Apr. 7, 2009