Why Rent? Minnesota Homes Are Made Affordable with Govt Subsidy!

Special Government Subsidized Community Programs: Buying a home in Minnesota is easier with the government subsidy including statewide programs, county specific programs and city specific programs for Minneapolis and St. Paul. With the Emerging Market Homeownership Initiative (EMHI), the focus on helping ethnic minorities are of high profile.

Usually, the benefits include: Below market interest rate – 5.375% to 6.375% terms up to 40 year pay back. (updated 2/08/08).
Grants – some are forgivable in just one day after closing, some gradually phase out in five years. Some ranging from $1000 to $20,000; or some ranging from 3% to 4% of loan amount.
Interest free loans – only pay back the principle when you sell the property, refinance into another loan or pay off the first mortgage such as 30 or 40 years later. Some are $3000, some are $10,000, $20,000 or up to $80,000 in an exceptional case.
Down Payment - Most programs involve small down payments such as $500. Some allow $0 down or use grant funds as down payment. Most programs accept gift funds from family or employers. The essence of using low or no down payment is to help buyers buy homes today rather than tomorrow after the houses appreciate more. The private mortgage insurance (PMI) for these loans are often subsidized, too.

Who may qualify: Mostly for First Time Homebuyers, a few for repeat homebuyers, mostly for owner occupied. Credit – usually not much blemishes even not perfect. Light credit OK. Income – middle to low. Family size will be taken into considerations. Some limit to family income of $62,000, and some allow up to $73,500 for a family of 6. Properties – may limit values up to $298,125 for single family home. Some programs allow lower limit such as $256,080 for single family home. Some allow up to $470,723 of a 4-plex. Assets – may need some down payment such as $500 and additional funds saved as reserves. Grant can be used. Some subsidies require low asset level after closing to qualify.