Many Minnesota first time home buyers are taking advantage of the down payment assistance funds available through the Minnesota Housing Finance Agency.  If you are renting today, chances are that by using MHFA down payment assistance you will find that it is cheaper to buy a home versus renting one.

All three of the down payment assistance funds have a couple of things in common:

1) You need to put a minimum of $1,000 of your own money into the transaction

2) There are maximum income limits

3) You cannot have more than $5,000 of liquid assets left over after closing.

4) These funds can be used in combination with FHA, VA, USDA, or Conventional first mortgage financing offered through Minnesota Housing

5) They are second mortgages on your property because you are essentially borrowing the down payment.  However they have zero per cent interest and no monthly payments due.

6) They are available to qualifying first time home buyers anywhere in Minnesota.

Let’s look at some of the differences between some of these down payment assistance programs:

1) $3,000 HAF assistance used with the Minnesota Mortgage Program.  The basic benefit to this program is that you can use it in combination with the MMP first mortgage program which will always have a better  interest rate than the CASA program.  Generally this program has lower maximum income limits except in designated “spotlight areas”.

2) $4,500 HAF assistance used with the CASA program.  This program is available to buyers who either have incomes too high to qualify for the $3,000 program or who need the additional $1,500 assistance.  The underlying CASA first mortgage program has a higher interest rate than the MMP program.

3) $8,500 Home Help.  This program can be used in combination with the CASA first mortgage program.  The income limits are a bit more conservative than with the $4,500 HAF assistance and this program has restrictions on the quality of the home.  Generally speaking, as a program that utilizes national sources for funding, it is not a good program for homes that were built before 1978 on which there is any chipping paint.

Want more information on MN down payment assistance?

If you are a Minnesota first time home buyer it may be a perfect time for you to looking into buying a home.  Please contact me for a referral to a local Minnesota mortgage banker who can assist you with determining your qualifications for down payment assistance.