City homebuyer assistance program offers new round of zero-percent forgivable loans
Applications are now available for the latest round of home-mortgage loans through Minneapolis Advantage. Minneapolis Advantage is a City-funded program that will provide fifty $5,000 loans at zero percent interest, forgivable after five years, to help qualified low- and middle-income buyers purchase homes in eligible neighborhoods in Minneapolis.
The program, now in its third year, has already helped 241 homebuyers purchase homes in the city, helping rebuild neighborhoods impacted by foreclosures and promotes sustainable home ownership and stabilized communities. Every potential homeowner must attend and complete a counseling workshop sponsored by the Minnesota Home Ownership Center that prepares buyers for the important choices related to home ownership.
This year’s program offers $5,000 loans instead of $10,000 in assistance offered in 2008 and 2009. In addition, $90,000 remain, or roughly nine loans, under the 2009 program guidelines for purchasing in the Willard-Hay, Near North, Harrison, or Hawthorne neighborhoods.
2010 Minneapolis Advantage program details
- Purchasers must have an income of less than 120 percent of the area median income ($100,680) 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 $5,000, at zero percent interest; If the purchaser continues to occupy the home as a primary place of residence 1/60 of the loan is forgiven each month so that at the end of five years the loan is completely forgiven.
- The loan can be used to assist with the payment of downpayment and closing costs.
- The property can be a single family dwelling or duplex within an eligible neighborhood. The property must be either in a foreclosed status, or was a foreclosed property that has been purchased by a non-profit for the purpose of selling it to an owner-occupant.
- Or, the property must be on the Minneapolis 249 vacant and boarded buildings list.
- New construction properties are not eligible.
Jordan, Folwell, McKinley, Webber-Camden, Hawthorne, Sumner-Glenwood, Shingle Creek, Near North, Willard-Hay, Harrison, Cleveland, Beltrami, Holland, Lind-Bohanon, Bottineau, Central, East Phillips, Phillips West, Midtown Phillips, Bryant, Powderhorn Park, Ventura Village, and Corcoran.
Unless the buyers are purchasing with cash, homebuyers must apply for a Minneapolis Advantage loan through their first mortgage lender. Loans will be given on a first come, first served basis. For more information about the loan program, lenders and homebuyers, call greater Metropolitan Housing Corporation at 612-378-7985.
2009 Minneapolis Advantage program performance
The Minneapolis Advantage program has effectively encouraged people to buy homes in communities stressed by foreclosure. In 2008, 50 loans closed under the demonstration phase. In 2009, $2 million was available. Due to the success of the pilot, the Federal Home Loan Bank of Des Moines awarded $1.5 million to Minneapolis coupled with the City's assistance of $500,000.
With the assistance of funds available in 2009, more than 35 percent of the buyers moved into Minneapolis were from outside the city and 32 percent are households of color. The average household size is 3.3, indicating larger families have been able to benefit.
Published Mar 22, 2010