On April 4th of this year, the Minneapolis city council approved a new loan program for buyers who purchase a single-family dwelling, or duplex, in 18 specific Minneapolis neighborhoods. The chosen neighborhoods have experienced higher than normal levels of mortgage foreclosures. The program, named the Minneapolis Advantage loan program, offers a $10,000 zero percent interest loan that is forgivable over five years to anyone buying a home in key neighborhoods.
The loan can be applied towards down-payments and/or closing costs. The loans can also be used by the buyer to offset any repairs that will be done to the home. Any amount that is not spent must be returned and will be deducted from the loan. The Minneapolis Advantage loan does not apply for investment properties, however. Not only must you live in the home, but you must occupy it within 60 days following purchase. The loan will not accrue interest and will be forgiven at a 20% rate each year over 5 years as long as you live in the home. If the property is sold, the mortgage is paid off in full, or you move out during that 5 year period, the loan amount will become due.
which are spearheading this program include Camden, Weber, Folwell, and McKinley. These neighborhoods are already offering an additional $4,000 for homes bought in their areas. Combined, the two offers effectively offer up to $14,000 towards the purchase of a home. Harrison neighborhood also has $4,000 in mortgage assistance that can be added to the program and an additional $15,000 that can be spent towards renovation of the home, bringing the potential amount to $29,000!
Nearly anyone can take advantage of these offers. More great news? The offer is not based on any home price! Whether it’s a $150,000 home or a $350,000 home, the benefit is the same.
The City of Minneapolis intends to have the program ready in May. It will be administered through Greater Metropolitan Housing Corporation, which will work with lenders. If you are thinking of buying in Minneapolis this year, be sure to ask your Realtor or lender about the Minneapolis Advantage Loan Program. A six-month evaluation of this program has been mandated, so it may not be around in 2009!
The guidelines of the Minneapolis Advantage loan program can be found on the city’s site here.