Low and moderate income first-time home buyers have a tool that can help them secure financing.
A program by Minnesota Housing Finance Agency (MHFA) not only offers competitive mortgage rates, but can also help people who can’t come up with a downpayment get a home.
Last week at the Sherburne County Community Partners meeting, Nicola Viana of MHFA explained the program to a group of about 30 local stakeholders.
“There are a lot of people who qualify for a loan. They’ve got the income to meet the mortgage, but they don’t have the savings to come up with the down payment or the closing costs,” she said.
“That’s where we step in. ”
In addition to low-interest mortgages, MHFA offers downpayment and closing cost loans.
“This is how we’re different from a bank,” said Viana.
Although MHFA is a state agency and offers state and federal programs, it doesn’t get much in state appropriations.
“We operate independently because of the revenue that’s generated from our mortgage loans,” she said.
MHFA’s first-time homebuyer loan is a mortgage revenue bond loan, which is cheaper than other loans.
“Mortgage rates have been creeping up lately,” said Viana. “And when that happens mortgage revenue bonds are a little bit more affordable. That’s why it’s helpful for first-time home buyers to get our loans.”
Last year MHFA served 17,000 households across the state. Over 90% of the loans had a downpayment and closing cost loan attached to it.
MHFA’s products are available through over 100 lenders in Minnesota, said Viana, so it’s easy to find a lender anywhere in the state.
MHFA also offers the Minnesota City Participation Program (MCPP), which helps cities and counties finance first-time homebuyers in their community.
The program started in 1990 and to date, 238 cities and counties have applied.
“We’re able to access tax exempt bonds that allows us to provide cheap loans,” said Viana. “It enables cities an counties to access this bonding authority.”
The program has no administrative fees for cities and counties and has a dedicated funding source. Last year, the MCPP allocation for Sherburne County was $1,469,297, covering 65 loans. No information was available regarding Wright County usage.
Viana said the program not only helps individuals, it also promotes home ownership in the community.
For more information about the MHFA first-time home buyer program or the MCPP, check online at www.mnhousing.gov.
