Minnesota unveils new home payment assistance program for first-time, first-generation buyers
ST. PAUL, Minn. — There's a new state program to help first-time home buyers with their down payments.
After getting $35,000 for a down payment under the new program, Phillip Ward showed his new home to Lt. Gov. Peggy Flanagan.
The state's new home buyer payment assistance program is for first-generation first-time home buyers — meaning an applicant's parents can not have owned a home.
That state has $150 million and is expected to help 4,500 home buyers.
First-time home buyers, even if they do get help with a down payment or qualify for a lower than 20% down payment, still have to cope with current interest rates which are adding hundreds of dollars a month to a monthly payment — even for the most affordable homes.
In 2021, a $220,000 home with a $22,000 down payment at a 2.65% interest rate would mean a monthly payment of just over $1,000.
Right now, that same home with the same down payment with today's interest rate of over 7% would mean a $1,531 monthly payment.
Getting help with the down payment has made Ward's monthly payments more affordable.
"My original mortgage would have been around $1,300, and $1,100 is doable," Ward said.
If you stay in your home for 10 years, half the down payment loan is forgivable — meaning you won't have to pay it back. If you stay for 20 years, the whole loan can be forgiven.
Homebuyers who previously had a home foreclosed on or whose parents' home was foreclosed can still qualify. Click here for more information.