First Time Home Buyer Grants
MVFCU is offering $30,000 in Grants to assist First-Time Homebuyers with the purchase of their first home which they will occupy as their primary residence. Funds for this program were provided through the Affordable Housing Program of the Federal Home Loan Bank of Des Moines. We will make 10 individual grants of up to $3,000.00 available for each home purchase. These grants will be offered in conjunction with a conventional first mortgage loan w/ up to 95% Loan to Value. Grant funds will only be granted to borrowers who obtain a mortgage loan from Minnesota Valley FCU. These loans are to be made to borrowers with low to moderate incomes (see income limits). The main program guidelines are referenced below.
Total Household Income – Total household income can’t exceed Minnesota MRB (Mortgage Revenue Bond) Income Limits. See the attached income limits for 2012. These limits will apply until they are updated for 2013. We will be using the 80% limit as shown on the attached sheet. For example, for a household of 1-2 persons, the household income is limited to $59,120.00. For a household of 3+, the household income is limited to $67,980.00.
First-Time Homebuyers – Borrowers must meet the Program definition of a First-Time Homebuyer. Properties must be owner-occupied.
Eligible Property/Home - Only homes in “Urban” areas are eligible. Homes must be located in the “City Limits” of either Mankato, North Mankato or Eagle Lake, Minnesota.
Amount and use of Grant Funds – Grants will be made available in an amount of up to $3,000.00. Funds are to be used for the down payment, settlement costs or eligible rehabilitation costs. Borrowers must contribute at least 3 % of the home’s cost from their own saved funds. In addition, depending on credit score/s and total debt ratio, borrowers may need to have additional funds equal to 2 months of PITI as reserves.
Financial Literacy Counseling – Homebuyers must complete an acceptable financial literacy education program.
Recapture of Funds and Retention/Deed Restrictions – A Deed Restriction document is signed by the borrower/s at closing. Properties are subject to a five year “Retention Period” whereby in the event the property is sold or refinanced during this period, the borrower/s may have to repay a portion of the subsidy/grant.
Other properties – The eligible household may not own, or be an investor in, another residence even if that residence is rented.
Purchase Price Limit – The maximum “acquisition cost” of a property may not exceed $237,031.00.
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Remember to Look for Hidden Fees
When buying or refinancing be sure to review the Good Faith Estimate. The good faith estimate (GFE) is a written list of the estimated closing costs involved in a mortgage transaction, including the lender's charges as well as the local closing agent's charges and fees.