Why St. Cloud Mortgage Thinks This Downpayment Assistance Program is a Game-Changer

Minnesota's new First-Generation Homebuyers Community Down Payment Assistance Fund is a specialized program designed to give forgivable loans to homebuyers who have never owned a home and whose parents have never owned a home.

There is some fine print to eligibility requirements (learn more about them here) but overall, the program is designed to give 10 percent of the purchase price, up to $32,000, to first-generation homebuyers in Minnesota. The state has dedicated $100 million to these loans, which would be forgiven if the homeowner maintains the home as their primary residence for 5 years.

It's a rare opportunity because most downpayment assistance programs ultimately require payback, which reduces the overall success rate.

The First-Generation Homebuyers Community Down Payment Assistance Fund is designed for potential homebuyers without access to generational wealth and could help decrease the racial disparity in Minnesota homeownership rates. In 2019, for example, 76.9 percent of White households in Minnesota owned a home, compared with 25.3 percent of Black households, according to firstgendpa.org.

St. Cloud Mortgage loan officers Shelvin Dean and John Lenoie are part of Building Equity For Diverse Communities Through Action, which advocated for this program to state legislators.

Now Building Equity For Diverse Communities Through Action members are working hard to ensure potential first-generation homebuyers will be ready when applications are available on or around June 1.

The group has helped more than 200 families get the First Time Homebuyers Education Certification required for this downpayment assistance program. Of those 200, over 50 families have been preapproved for first-time financing and dozens others are repairing their credit in hopes of obtaining preapproval soon.

To learn more about the First-Generation Homebuyers Community Down Payment Assistance Fund's eligibility requirements and processes, visit firstgendpa.org. To connect with St. Cloud Mortgage loan officer Shelvin Dean on mortgage preapproval, visit stcmortgage.com.