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Minnesota Housing Finance Agency

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First Time Homebuyer Program & Downpayment Assistance

Homebuyers in Dakota County can now access fixed, low-interest mortgage financing along with a Mortgage Credit Certificate and up to $10,000 in downpayment and closing cost assistance through the CDA First Time Homebuyer Program.

To apply for the First Time Homebuyer Program, contact one of the loan officers on the Participating Lender List. Interested homebuyers must work with a Participating Mortgage Lender to qualify for the First Time Homebuyer, Give Yourself Credit! and Down Payment Assistance Programs. Additional lenders will be added to the list as they sign up to participate in the program.

Eligible Financing

The First Time Homebuyer Program may only be used with 30-year amortizing fixed-rate FHA or VA mortgage loans.

Interest Rate: 3.375%

Program Eligibility

Homebuyers must be first time homebuyers or someone who has not owned a home in the last three years
Properties must be located in Dakota County
Homebuyers must occupy the home as their primary place of residence after purchase
Homebuyers must have a minimum credit score of 640
Income Limits

1 or 2 person households: $82,300
3 or more person households: $90,530
Maximum Purchase Price: $271,590 for single family homes, townhomes or condominiums

NOTE: Borrowers will pay an application fee at closing. Income and purchase price limits are subject to change.

Give Yourself Credit!

In addition to the low-interest first mortgage financing available through the First Time Homebuyer Program, homebuyers can take advantage of Give Yourself Credit! a mortgage certificate program that provides a federal income tax credit.

Downpayment & Closing Cost Assistance

Homebuyers accessing the First Time Homebuyer Program can also apply for downpayment assistance loans of up to $10,000 (depending on household income).

Downpayment Assistance Loan Terms

Zero percent interest
No monthly payments
Loan must be repaid when the primary mortgage is paid off, the home is no longer the primary residence, or when the home is sold or refinanced.
Borrower must contribute a minimum of $1,000 of their own funds toward the purchase of the home.
Home must meet the minimum housing standards for FHA or VA mortgages.
Maximum Loan Amounts & Income Limits

10% of the first mortgage amount up to $10,000 for households with incomes at or below 50% of the area median income
5% of the first mortgage amount up to $7,500 for households with incomes between 51% and 80% of the area median income
2.5% of the first mortgage amount for households with incomes between 81% and the First Time Homebuyer Program income limits

Household

Size 10% of First Mortgage 5% of First Mortgage 2.5% of
First Mortgage
1 $28,850 $45,100 $82,300
2 $32,950 $51,550 $82,300
3 $37,050 $58,000 $90,530
4 $41,150 $64,400 $90,530
5 $44,450 $69,600 $90,530
6 $47,750 $74,750 $90,530
7 $51,050 $79,900 $90,530
8 $54,350 $85,050 $90,530

All homebuyers applying for a First Time Homebuyer loan or Give Yourself Credit! must complete an approved homebuyer education course (Framework or Home Stretch) before closing on their loan.

The cost of the Framework online training is $75 per household. If the online Framework is taken, one borrower from the household may take the training, but all borrowers who will be on the mortgage must attend a free pre-purchase counseling meeting with one of the CDA’s homeownership counselors.

HomeStretch costs $15 per household for Dakota County residents and $25 for non-residents.

Also available are FREE one-on-one pre-purchase counseling sessions with trained homeownership specialists. Pre-purchase sessions provide answers to questions about homeownership and a review of a household’s financial situation to help develop a plan to become a homeowner.

How to Apply

To apply for the First Time Homebuyer Program, contact one of the loan officers on the Participating Lender List. Interested homebuyers must work with a Participating Mortgage Lender to qualify for the First Time Homebuyer, Give Yourself Credit! and Down Payment Assistance Programs.

Questions? Call 651-675-4442.