Minnesota announces financial aid for first-generation buyers

Minnesota Housing announced Monday, July 8, a new $150 million program to help first-time homebuyers.

The First-Generation Homebuyer Loan Program is designed to help buyers with a down payment and closing costs. To qualify for the “first-generation” category, applicants and their parents must have never owned a home — or if they did, they must have lost it to foreclosure.

In a speech in St. Paul Monday afternoon, Lt. Gov. Peggy Flannigan said the money would help Minnesotans in a tough housing market.

“Buying a home is stressful enough, but going through the process alone can be even more difficult, so we’re here to let you know that there are plenty of opportunities and lots of support out there,” Flannigan said.

Successful applicants can get a loan of up to $35,000. The loan is interest-free, deferred and can be forgiven provided the buyer stays in the home for a set period of time. After 10 years, half of the loan is forgiven and after 20 years, the entire amount. Applicants will also need to meet a certain income level and have a minimum credit score to qualify for the program.

Kevin Kalligher, a real estate agent in Duluth, says affordability and simply being able to find a home have been concerns for buyers since the pandemic. He says programs like the one the state is offering are a step in the right direction for buyers.

“With COVID, prices have really gone up. Interest rates have more than doubled in some cases. And I think that’s something that’s going to help people. So, ultimately, it’s a good thing,” Kalligher said.

Kalligher has helped clients who have taken advantage of first-time homebuyer assistance programs. For Victoria Kaufman, government grants and assistance made the difference in allowing her to purchase her first home.

“There’s this issue of capital outlay. Without some of these programs, I wouldn’t have been able to compete with others, I think,” Kaufman said.

Minnesota Housing said the loans will be available on a first-come, first-served basis, and the program will run until the allocated funds are exhausted. More information can be found on the Minnesota Housing website.