First-Time Homebuyers: Do You Qualify for Down Payment Assistance?
The Minnesota housing market is experiencing another sizzling summer. Like 2018, rapidly rising home prices and low mortgage interest rates are driving the market. As a result, homebuyers are finding themselves in bidding wars that achieve at least asking price, if not far above.
Understandably, this market is putting sellers in an ideal position for success. But buyers, especially first-time homebuyers, are struggling to close deals with the intense competition.
In many ways, first-time homebuyers are in better position than those who have a home to sell. However, first-time buyers do face an obstacle an experienced buyer may not – having enough money for a down payment. The good news is there are programs available to help with the down payment and get you on the path to homeownership.
Homebuyer Down Payment Assistance – What Is It?
Home Buyer Down Payment Assistance provides affordable, fixed interest rate loans to qualifying first-time homebuyers and reduces the amount of their first mortgage. These loans are used in to either put down a down payment, or contribute to closing costs. Typically, depending on the program, these loans range from $8-15k.
In Minnesota, there are numerous statewide programs when it comes to down payment assistance. Some options include the Minnesota Housing Finance Agency (MHFA), and county-specific resources like Scott and Dakota counties. Each of these programs differs slightly and has various requirements when applying.
Do I Qualify?
First-time homebuyers in Minnesota can consider themselves fortunate that their state has some of the best down payment assistance programs in the country. As mentioned, a variety of options are at their disposal, and each option can have a specific set of requirements. In general, most programs require/evaluate the following when measuring qualifications:
Assistance must be used for a down payment and normal closing costs
Homebuyer education courses are most likely required
Borrowers cannot have owned a house in the last three years
Minimum credit scores are needed – generally around 640
Income limits need to be met
Purchase price limits may be required
Where Do I Start?
If you’re a first-time homebuyer and are interested in what down payment assistance programs options like the MHFA or FHA are great places to start. In these cases, online application is easy and should only take a few minutes.
Your mortgage lender is a great resource. When discussing your home buying options, they should be able to walk you through programs appropriate for you that you would qualify for.
Improve Your Offer
First-time home buying is exciting, but the competition is fierce. When first-time buyers take advantage of assistance to put a sizable down payment on their offer, they can make sure their offer stands with the rest.
A Dream Home for a Real Budget
First-time buyers in today’s market can rarely get everything they want in a house in the perfect location. Brandl Anderson’s Calumet Oaks Townhomes in Savage allow these homebuyers to experience community living at its finest right away.
To learn more about how the Calumet Oaks Townhomes can be the perfect fit for your first home, click here.