MMCDC’s Mortgage Lending Department is making progress toward deploying $100 million in down payment assistance for first-generation homebuyers.
With a target goal of opening for applications in early 2024, MMCDC staff are working with Minnesota Housing on getting a program guide, work plan, budget, and contract approved. Because this is a pilot state-wide first-generation down payment initiative, the process of laying out the logistics is time-consuming: the work plan must be thoroughly planned and detailed to ensure all aspects are addressed and act as a template for other statewide initiatives.
Karen Larson, Vice President of Mortgage Lending at MMCDC, also noted the creation of a centralized portal is in progress for consumers to access reservations of funds. The portal will be linked on both the First-Generation Down Payment Assistance program website as well as MMCDC’s website.
Potential customers can stay up-to-date on the progress of program by signing up for more information and launch timing details at firstgendpa.org. Additionally, the website is an excellent resource for consumers with details about how the program works, an explanation of who qualifies for the program, and guidance on how to prepare to apply for the funds, including links to homebuyer education courses and counselors.
Lenders and realtors can also visit the First-Generation Homebuyers website to learn about how to partner with the program and find updates about program developments.
The “Community-Based First-Generation Homebuyers Down Payment Assistance” Program was signed into law by Minnesota Governor Tim Walz on May 15, 2023 after the Minnesota House and Senate passed the omnibus housing finance bill (HF 2335). The program was created to address the state’s racial homeownership gap and the corresponding barrier of insufficient capital for down payments. A diverse coalition of groups led by the Minnesota Realtors, the Minnesota Homeownership Center, and Twin Cities Habitat for Humanity brought forward the pilot program.
As noted on the First-Generation Homebuyer’s webpage, “This fund provides up to ten percent of the home’s purchase price (capped at $32,000) in down payment assistance to eligible homebuyers across the state. The funds are a zero-interest loan that is forgiven over five years, so long as the buyer lives in the home as their primary residence.”
MMCDC (in partnership with CDFIs, nonprofits, and Tribal entities around the state) will administer the funds for Minnesota Housing, opening the door to homeownership for thousands of first-generation homebuyers, and particularly those in communities of color.
