Minnesota announces loan assistance for first-generation homebuyers

Minnesota Housing announced a new $150 million program to aid new homebuyers on Monday, July 8.

The First-Generation Homebuyer Loan Program is designed to help buyers with down payments and closing costs. To qualify as “first generation” both applicants and their parents must not have ever owned a home – or if they had, must have lost it due to foreclosure.

During remarks in St. Paul Monday afternoon, Lt. Governor Peggy Flannigan said the money will help Minnesotans in a difficult housing market.

“Buying a home is already stressful enough but navigating that process alone can be even harder and so we’re here to let you know that there is a lot of opportunity and a lot of support out there.” Flannigan said.

Those approved could get a loan worth up to $35,000. The loan is interest free, deferred, and forgivable provided the homebuyer remains in their property for a set amount of time. After 10 years, half the loan is forgiven, and after 20, the full amount. Applicants will also have to be under a certain income level and meet a minimum credit rating to qualify for the program.

Kevin Kalligher, a real estate agent in Duluth, says both affordability, and simply being able to find a home has been a concern for buyers since the pandemic. He says programs like the one being offered by the state are a step in the right direction for buyers.

“With the onset of COVID, prices really got driven up. Interest rates have over doubled in some cases. And I think this is something that’s going to help people out. So, it’s ultimately a great thing.” Kalligher said.

Kalligher has helped clients who’ve taken advantage of first-time homebuyer programs. For Victoria Kaufman, grants and state assistance made the difference in being able to buy a home for the first time.

“There’s that down payment problem. So, without some of these programs I wouldn’t have been able to compete, I think, with other people.” Kaufman said.

Minnesota housing says the loans will be available on a first come, first served basis, and that the program will run until the money allocated is gone. More information can be found at Minnesota Housing’s website.