One of the most frustrating things for someone with the home buying dream is to have decent credit and a sufficient income but not enough money for the down payment and/or closing costs on a home.
If that dream home happens to be in St. Paul, you’re in luck. Both the city and the state offer lots of different programs to help folks just like you. From help with the down payment or closing costs to low-interest loans to rehab a home, let’s take a look at just some of what’s offered.
Help with your Down Payment and Closing Costs
Assistance may be in the form of a grant or a loan that you can use to pay the down payment or the closing costs when purchasing a home.
The Minnesota Housing Finance Agency is the place to start when you’re looking for help buying a home. They offer a number of programs, depending on whether you’re a first-time homebuyer, a repeat homebuyer or a current homeowner.
Their Start Up program, a monthly payment loan, assists first-time buyers who:
- Haven’t owned a home in three years
- Have a credit score of at least 640
- Meet the agency’s income limits
- Purchase a St. Paul home for $310,000 or less.
- Loans available for up to 5 percent of the purchase price for down payment and closing costs.
- Borrowers must also get a Minnesota Housing first mortgage loan.
The Step Up program is for those who are repeat buyers and can be used to purchase another home or refinance the current home. The criteria for this program are the same as for the Start Up program, with the exception of the first item.
The agency also offers a deferred payment loan for first-time buyers only. These loans must be used in conjunction with the Start Up program and offer two loan options:
- A maximum loan amount up to of $7,500.
- A maximum loan amount up to $10,000 for borrowers who meet certain criteria.
The beauty of the deferred loan programs is that there is zero interest accrued and they don’t need to be repaid until you sell or refinance the home. You must have at least a 640 credit score and take a homebuyer education course to qualify for the deferred loan programs.
There are other programs as well. Some are targeted to certain groups, such as American Indians, low-income individuals and families, military members or members of certain occupations, such as teachers, fire fighters and police officers.
Contact us with questions about down payment and closing cost assistance programs. We’re happy to help.
Photo: Alan Cleaver/Flickr