First Stop 4 Home Loans

As you may know, there are so many things available for first time home buyers — ending soon is the federal tax credit of $8000.  You need an accepted purchase agreement by the end of April and must close by the end of June.  There have been lower rates and of course, plenty of first time buyer programs.  One in particular is the Ramsey County FirstHOME. 

If you’re looking in Ramsey County, or I should say, the “suburbs” of Ramsey County, you could take advantage of a great opportunity.  If you’re looking in the city of St. Paul, then there is a different program you may be interested in — the CityLiving program.  But, if you want to live in one of the many cities* of Ramsey County, this may just be the program for you.

Available as an interest-free loan, is up to $20,000 that you can use toward closing costs and down payment.  There’s a few ways you can use this money to your benefit.  One, is to help your buying power.  The $20,000 may allow you to afford a larger home or higher sale price.  Speaking of sale price, the maximum purchase price on this program is $200,000.  Or, two, you could keep the price range you’re pre-approved for and bring your payment down.  Not a bad deal.  Did you know that for every $10,000 in price, it’s about $70/mo in your payment?

There are a few guidelines that are specific to this program.  Like all first time buyer programs, there are income limits.  These income limits take into account the total income from the household, not just from the person on the loan.  This even includes children 18 years or older that are working.  Along with this, there is a requirement that you have at least THREE years of working full-time.  The FirstHOME program is not a solution to help first time buyers coming right out of school to qualify for down payment assistance.  A year or so ago, a GREAT change occurred to this program — you no longer have to WORK in Ramsey County to qualify, which opens a lot of doors for more people to qualify.

You must attend the first time buyer Homestretch class overseen by the MN Home Ownership Center.  Even if you didn’t have to take this 8-hour course, I highly recommend it.  It will go over everything from the process with your loan, buying the house and even talk about “what ifs” as you’re a homeowner, such as foreclosure prevention.  And hopefully, with guidelines that are getting tighter and tighter, you won’t have the opportunity to get in ‘over-your-head’ with a house payment.  Trust me when I say, this is never my goal.  Sure, I want to help you get the house you want, but it should never be a the expense of you not being comfortable with or able to make the payment.

An interesting requirement for the FirstHome program has to do with ratios.  Ratios are a certain percentage of your GROSS income (pre-tax) that we can use toward your house payment (housing ratio) or your house payment and your other monthly debts (debt ratio), which ever is less.  For all practical purposes, we are limited to keeping your debt ratio under 45%.  In order to be eligible for the assistance, your “housing” ratio needs to be OVER 30% of your gross income.  The purpose then, for the assistance, is to bring your housing ratio down as close to 30% as possible.  If you are under 30% to start, then this program won’t work for you .

Wanna know something else that’s cool with this program??  How about the ability to use this WITH the MN Housing program, where you not only can get a lower-than-market rate,  but also could qualify for another $5000.  Yes, another $5000 — you could receive a total of $25,000 to use for your new home purchase.  Wowsers!

Anyway, this is a super program!   Let’s see if you can make these monies work for you while you’re still a first-time homebuyer.  If you want further information, please don’t hesitate to give me a shout or email.  I am here to help. 

*Cities eligible for the program:
Arden Hills, Falcon Heights, Lauderdale, Little Canada, Maplewood, Mounds View, New Brighton, North Oaks, North Saint Paul, Roseville, Shoreview, Vadnais Heights and White Bear Lake

As much as I’d like to say pre-approvals are all the same — they’re not.  Though you can buy the same pair of jeans at numerous stores, you cannot get the same pre-approval from numerous companies.  So why not?  If an FHA loan is an FHA loan, then I should get the same product anywhere I go, right?  Not so much.  The thing is, it’s more that all lenders aren’t created equally, meaning you won’t get the same answer or loan suggestions from everyone.  Also, many lenders don’t have access to the first time home buyer programs.  Due to this, you may very well be steered into a program that may not be right for you OR you may be steered away from those first time programs because they’re “too much work”.  Cry me a river.

The question remains, why aren’t pre-approvals the same?  A pre-approval means different things to everyone.  For instance, one lender may see the pre-approval as just running your numbers over the phone, pulling credit and then issuing you a pre-approval letter.  What’s wrong with this picture?  Isn’t this what pre-approval means?  Nope.  The reputable lenders, me included , realize there is a lot that goes into saying “you can buy a house”.  Yes, we need to run numbers and yes we need to get credit; there is still much more to do.  Your loan must be run through an automated underwriting system (AUS).  This is a program with a million different checks and balances to identify risk or maybe conclude it isn’t a risk at all.  We can run FHA, VA and Conventional loans through this system.  And, it’s HIGHLY advised.  Sometimes the program alerts us to something we missed, such as an issue in credit that’s pages down in the credit report and we missed it.  Other times, it helps us pre-approve a buyer that may not have qualified otherwise.  For instance, let’s say the normal guideline is to take 41% of your gross monthly income toward your debts and proposed house payment.  Maybe this is a bit limiting for what you’re looking for.  Looking at your credit and assets, I can determine that you are well qualified to extend yourself a bit.  (NOTE:  I am not here to increase your payment just so I can do a bigger loan.  You need to spend what you feel is comfortable.)  After I run it through AUS, I may get an approval up to 45% of your income.  This just made it so you can afford a larger loan amount and possibly the house you want.  If the payment is something you can live with, then off to the races we go.  If not, then let’s chat about where you want to be.  Ultimately, this decision should be driven by a budget — something that lays out what you owe and what expenses you have monthly in relation to your NET income (after taxes).  You know, things like clothes, dinner out with friends, a $4 cup of coffee every Monday and Friday, or whatever.  It’s crucial to budget.

Okay, so now you know we need to have the loan run through the automated system.  Now what?  We’re all human.  There is that element of imperfection — typing something wrong, from income to assets — the information is only as good as the accuracy of the data entered.  The next part of the pre-approval is gathering documentation for your loan, paperwork that supports what you supplied on the loan application.  I have had this happen before — a client told me he worked an extra 4 hours a week in overtime.  I confirmed verbally that this has been going on for the last 2 years (need a history of this type of income).  He stated that 4 hours was on the low end and sometimes it’s more.  To be safe, I used the lesser number to avoid a possible inaccurate pre-approval.  It was crazy when I finally got the paystub and low and behold, overtime didn’t really exist at all!    Either he’s not telling the truth (and I always give the benefit of the doubt) or the company isn’t paying him as they should be.  Turns out it was the latter.  Bummer, huh?  Needless to say, my income was off, so it was putting a damper on their qualifying power.  We had to adjust their searches down.  As simple as this may seem, it’s not.  I liken it to buying a TV.  Let’s say your research shows that based on your savings, you can afford a 27″ TV (do they make those anymore??).  You head over to the “big box” store and right there, first thing you see, is a beautiful, crystal clear 32″ LCD TV.  Now, I don’t know about you, but that TV is going home with me TODAY!  I’ve seen what I could have (if I could afford it) and know that’s what I want.  Looking at the piddly 27″ TVs just doesn’t cut it.  This is the same experience with buying a home.  If you’re looking at homes in a higher price range and then come to find out you don’t qualify that high because your paystubs don’t support the higher income, you’ll be disappointed.  Nothing compares to the home that was $20000 more than your new approval amount.  And the truth is, nothing will compare.  It’s tough to wean yourself off something so much nicer, bigger or what-have-you than what really works in your budget.  It’s critical that your lender gets this documentation ahead of time before you start looking.  No sense getting your hopes up for something that isn’t obtainable.

Okay, so now we know the AUS system has pre-approved your home loan and your documentation supports that — now what?  How can the pre-approval differ if the lenders are playing by the same rules?  Another great question.  First, not all lenders know what to look at with the documentation or how to even calculate your income.  Sad to say, but true.  And, not all lenders are supported in the back end to fulfill their commitments to your pre-approval.  Anyone can say you’re pre-approved; but can they actually process your loan in a timely manner, underwrite the file in-house AND fund the loan on time locally?  Not many lenders can say this.  The “big box” lenders are having a very hard time getting deals done in a 60-90 day window.  Don’t get me wrong; they can be great lenders.  It’s tough to give great customer service and attention when there are so many pieces of business coming in — too much they just can’t handle it.  Truth be told, some lenders, more specifically loan officers, just flat out lie.  Many years ago, the lending industry got an “escape” clause if you will.  Essentially, per MN Statute, the pre-approval and the full approval are NOT guaranteed since things may change.  Remember the stuff you shouldn’t do while in the home-buying process?  People do those things, such as quitting a job a few days prior to closing.  I mean really, you couldn’t wait 2 days?  It was just that bad?  He didn’t think it was an issue — we had him approved and ready to go.  Bummer is that investors are requiring a verbal verification of employment within 5 or even 3 days of closing.  We MUST call your company to make sure you still work there.  You can imagine our surprise when the answer was no.  He was stuck — closing supposed to happen in 2 days, no job, no loan.  We did the only thing we could — wait until he got the job.  Since this wasn’t my deal, I have no idea how the listing agent/seller reacted to this big delay.  My guess is they weren’t too happy.  Can you blame them?

And last, the company, and/or the loan officer, can make or break whether that pre-approval is just a piece of paper with no value.  There are a few good loan officers out there that do the right things to insure you are actually pre-approved for a home loan.  Then there are those who somehow survived all the changes and still don’t have a clue how to read a paystub, let alone ask for one.  It’s common sense.  If someone mentions that they get paid tips a huge flashing light goes off saying “Verify Income” sooner than later.  Why?  Well, tips vary and we need a 2-year history of earning them to use that type of income to qualify.  Oh and those tips that don’t make it to the W2 or tax return … can’t use them.  You will find that Realtors who have been around a long time, know and recognize those lenders and loan officers who perform with their pre-approvals.  Admittedly, I made a mistake last summer using alimony income.  I took the word of the borrower that it was consistent, month after month she was receiving it.  When I received the bank statements to confirm the stability of this income, I failed to look closely for the consistency.  When the underwriter can’t see a pattern, it’s really tough to use the income.  Holy cow did I learn my lesson by doing a loan that was completely free – no income for my company and no income for me.  But that’s what you do … stand behind your letters and do what you say you’ll do.  I put it out there and I will make it happen.  You need to find a lender that will do that — of course, I would love to be that person for you!

In a nutshell (of say 1600 words or so ), you can see that more things go into a pre-approval than just “running your numbers” on a calculator and calling it a day.  Knowing the lender you work with is so important.  The Realtors I work with are number one in the Minnesota area and realize the importance of working with someone who can perform, even if the audience did pay for the show!  Be cautious and be certain that you work with the best lenders who come through, day in and day out.  It’s not just a piece of paper that is the same no matter who you work with; it’s truly the “ticket” to whether you get on the home-buying train or have to get off right before your destination.  No fun being dropped off in the middle of nowhere with nothing to do but start the journey over — assuming you can find a ride that can get you there.  Hope to help you get there soon!

Another month, another seminar frenzy.  It’s all about you — it’s in my Vision for You and truly is part of who I am.  To me, education is key to owning your first home.  Sure, I want to help you navigate through your first financing experience on a house.  The Realtors I work with want to help you find your very first house.  Business is business, right?  Partly.  As a team, we have an alterior motive — we want you to be as prepared as possible for buying a home.  So, to this end, I dedicate three nights a month to first time buyer seminars with the help of some very awesome Realtors.

So, what’s in it for you?  My hope is that you will walk away with a greater understanding of what the process is, how to get started, what programs can help with down payment assistance and other information to understand what you’re “getting into”.  There are many people out there, maybe you included, that have a desire to own a home, but hang in the shadows due to fear, credit challenges or even stories about your friend’s bad home-buying experience.  With something so big as buying a house, you do not want to go in blindly, not to mention work with people that don’t have the market knowledge and extensive resources for assistance.   This process should be educational, stress-free and believe it or not, fun!  I get reminded quite often while talking to people refinancing that lenders and Realtors are not created equally.  Not everyone gets to experience this knowing the facts, being given options on first time buyer programs or being led through the process.  Many of my clients who weren’t first time buyers with me were slammed into the system of homeownership without a clue about the loan they were doing, consequences of certain programs, and some were even put into loans that they didn’t have to be in. 

How would you like to get a grip on your first home-buying experience?  The awesome team I surround myself with would love to help “get your education on,” with NO obligation.  We’ll discuss the process from the first step of pre-approval to the last step of closing on your home and getting the keys!  Oh, and did I mention it’s FREE*?

I have THREE seminars coming up in March.  These are the same seminars, so feel free to pick the one that fits with your work or home location. 

The South metro seminars are on Monday the 15th and Thursday the 18th from 6:30-8pm at the Cornerstone Mortgage office located at 436 Gateway Blvd. in Burnsville.  I will be presenting these steps with trusted partners, Brandon Hedges — Homes of Minnesota Team, as well as Steve Howe – Minnesota Real Estate Team.  We will help you take that first step to home ownership. 

If the North metro is a better fit, then join us Thursday the 25th from 6:30-8pm at the Shoreview Community Center — 4580 Victoria St N #203.  This time, I have the pleasure of presenting with Steve, as well as Tony D’Agostino, also with the Minnesota Real Estate Team. 

Trust me — you will go away knowing so much more about the process AND will feel more comfortable now that you’re armed with information – info that many lenders just don’t share!!  Both will be a fun and educational evening. 

Please register by calling 952-808-0042 as space is limited.  Hope to see you there!

*ALL of our team’s seminars are FREE of charge. Cornerstone Mortgage is proud to be a drop-off site for the CAP agency, which is a non-profit organization that collects food items and gently used clothing for Scott, Carver and Dakota Counties. If you can, please donate a canned food item, baby food or clean clothing so we can continue to support the families in need in the communites we serve!

How do you get started buying your first home — short of actually looking at houses or driving around on a Sunday and visiting open houses?  There really is a “first” step in the home buying process.  It’s to get pre-approved.  Now, don’t mistake pre-qualify for pre-approval.  These are two totally different thing!  A pre-qualification is nothing more than gathering some info on your income, assets and debts to let you know the amount you can afford for a house payment and a sale price.  This process does not hold any water and certainly doesn’t tell a seller you can get home financing. 

Being pre-approved means a couple of things.  First, you’ve applied for a loan – which can be done via the phone, in person or mycompany  website which is the option many take.  Our online application is a secure site which will only take you about 5-10 minutes, depending on how long it takes you to type!!   A one-on-one meeting is not necessary at this time, BUT, I do suggest we meet PRIOR to you looking at homes.  There is a lot to learn about the process, the money you need to purchase a home and the different loan programs and first time buyer programs you could qualify for.  I would be doing you a huge disservice if we didn’t take the time to meet.  Generally, my meetings take 1-2 hours.  I try so hard to keep them manageable for you, but it’s my goal that you leave the appointment with a full understanding of what happens next.  And, you feel like ALL of your questions have been answered.

The second piece to a pre-approval is pulling your credit report.  The credit report is important for a few reasons.  First, regardless of whether you are buying your first home or fifth, you must have at least a 620 credit score.  Though it is true that loans insured by FHA (Federal Housing Administration) and VA (Veteran’s Administration) do not have minimum score requirements, it just doesn’t matter.  FHA and VA are not buying or servicing the loan — the end investor is.  THEY are the ones requiring the 620 score.  And, there are some investors that require a 640 score.  This part of the pre-approval puzzle has become crucial to qualifying for financing.  It didn’t used to be this cut and dry.

The third part is submitting your loan to an automated underwriting system or to an underwriter.  In order to confirm your pre-approval, it’s important that I collect documentation to support the information you provided on the loan application.  The following documents will be required from you to complete this process:

-most recent paystub

-last 2 years W2s AND last 2 years federal taxes (it’s the last THREE if you’re applying for a first time buyer program)

-most recent MONTH bank statement, all pages, all accounts

-copy of your driver’s license (this is part of the Patriot Act that came about due to 9/11)

-any court papers, such as bankruptcy, divorce or child support

Because everyone has a different situation, there may be more documents requested.  For instance, let’s say you had a $3000 deposit into your account from the sale of a car.  Your “extra” paperwork would include a copy of the title, cashier’s check you got for the sale and a copy of the blue book value to substantiate the value matches what you sold the car for.  Now you may be asking why this is any of our business, and truthfully, I would do the same thing too.  All lenders want to source the funds you receive.  If you have deposits other then income, then lenders want to know where the money came from — if it’s a loan, then we need verification of that and need to count payments in our debts.  If it’s a gift, then we need to document that according to the specific program you’re doing.  This can be a lot of back tracking which is why during our appointment, I will advise you what NOT to do while in the home-buying process.  It’s better to know what you need to get to verify deposits then having to re-create documentation that may not even exist.

One of the main reasons this is the FIRST STEP in the process is two-fold — first, it insures that you can get financing and two, you will know what price range you can look at, as well as what payment you’re comfortable with.  Sellers will require that you’re pre-approved.  And just so you know, all pre-approval letters are NOT created equal.  Just because a lender says you’re approved doesn’t mean this is true.  Some lenders don’t take the step of verifying the information provided.  Some don’t understand the rules of the first time buyer programs or don’t know the ins and outs of the loan type you’ve applied for.  The paper the letter is written on is sometimes worth more than the actual “pre-approval”.  More times than I can count, I was presented with a pre-approval letter from another company via the Realtors I work with.  Low and behold, they were coming to me to “save” the deal because indeed, the person was NOT pre-approved.  So, how can you tell?  I guess the only suggestion I have is to work with a reputable company, one that’s known for your special needs (i.e. first time buyer programs).  Listen to your agent’s advice.  Even then, they aren’t always connected to the right people.

Woohoo — you’re pre-approved.  Now what?  It’s time to get excited because the fun begins — you get to look at houses and find one that fits your needs, as well as your budget.  Speaking of budget.  This is a VERY important thing to keep in mind.  A lender can tell you your max payment is $1500, but in your heart and on paper, you know going over $1200 would put you in the poor house.  Staying withing your comfort zone is key to having a great home -buying experience.  I don’t plan to make your house payment so you would be wise to have a number in your head for that “max” payment you’re willing to exceed.  When you do put some numbers down as a budget, don’t forget things like insurance, meals out, entertainment, clothing, etc.  Many people forget these things — hey, even a coffee each day adds up!  Another note … being pre-approved with take a lot of disappointment away from the process.  If you start looking at houses you THINK you can afford and then come to find you don’t fall in that price range; you will be frustrated and bummed.  Believe me; I’ve seen it.  It’s better to know what your range is before you start looking — either on your own or with an agent.

So, take the first step to your home buying experience by getting pre-approved.  It’s the one piece of this home buying puzzle that will help all the other pieces fall into place.

Nothing like starting a post with a negative — things NOT to do.  It would be better to say what you should do, but as a loan officer that sees so many things that need fixing, I would rather warn vs. fix.  If you’re a first time home buyer, please take the time to look this list over.  Admittedly,  because of it, I sometimes get questions that aren’t really an issue for the pre-approval process.  I totally appreciate that my clients are reading the “instructions” and are checking with me ahead of time.  I would rather be safe than sorry.

Let’s start with the biggest offender — deposits into your bank accounts.  While in the process, please don’t make any deposits other than your regular payroll deposits.  And, please resist the urge to transfer money back and forth between accounts.  So go ahead, ask the question … why is it any of our business what you do in your accounts, right?  I respect that question, but of course, have a valid response.  The thing is, FHA, VA and Conventional guidelines all require that we “source” the funds for down payment.  If there are deposits, we need to verify you didn’t take a loan out (and if so, we need to know the terms of the loan to consider the payment as a debt) or make sure it wasn’t a gift.  The loan type you’re doing needs to allow for gifts and we would need to document the gift and donor.

What else are we going to restrict you from?  Another biggie — please don’t mess with your credit.  For example, don’t start closing unused accounts.  History makes up about 15% of your credit score and if they go away, you will reduce your history.  This is super important for first time buyers since they might not have a long history to begin with.  A few other things — obviously, don’t open any new accounts, pay off any collections (unless your lender told you to do this) or pay off debts.  New accounts mean you’ve had inquiries into your credit.  These can negatively affect your score.  I advise clients NOT to pay collections.  Main reason is tracking, and for the most part, only VA guidelines require collections to be paid.  I would rather you pay it off at closing.  This way we have a paper trail of payment vs. assuming you’ll get a receipt from the collection agency.  Good luck with that!  Oh, and the reason I keep mentioning scores is that they are crucial to whether you can get financing or not.  These days, you must have a 620 score or higher to get a loan.  I have a perfect example of a current client who had a score of 622.  We were golden; but her price range limited what was available to look at.  Finally, five months later, she’s ready to go and I had to pull new credit (reports are good for 120 days).  Due to her increasing her debt-load with balances over 50% of the available credit limit, her score dropped to 618.  UGH!  There is seriously nothing we can do but wait.  On her end, she can use some of the down payment money she was saving to pay down these cards to less than that 50% mark.  Since she had no lates or other derogatory things, this is the only reason her scores decreased.  The moral of the story … don’t mess with credit, which can even mean, don’t increase your balances on revolving lines such as credit cards.

As much as a new job is really cool, make sure you’ve consulted with your lender prior to this change.  We just ask that you don’t change your pay structure or how you’re compensated.  Let’s say you’re currently salaried and you have a great opportunity to earn more by changing how you’re paid (which is usually more a benefit to the employer in the beginning).  So now, you make a base salary, lower than what you were previously making,  but have a whole lot more potential top make more by receiving commissions.  This may be true, but you may have just unknowingly sabotaged your ability to get a loan.  Why?  Well, all loan types require you have a 2-year history of commissions; otherwise, we can’t use the income for qualifying.   This is true with bonus, self-employment, tips and overtime — all need a 2-year history.  So don’t go from being employed to starting your own business either.  This will hinder your financing plans big time.

The next one seems super obvious … well, I think so.  Don’t make any large purchases such as a new car, furniture or appliances.  This covers a few of the areas above.  For instance, if you’re offered a no-payment option for 2 years on appliances, you may say “sweet” and go for it.  Couple things happen here — your credit is checked, so an inquiry is made which may bring your score down.  Also, even though you don’t have payments, we still have to count a payment on this new debt.  This could make it so you can’t buy the home you have a purchase agreement on.   That would not be good, for all parties involved, you especially!

Last is my rule … don’t ever feel like you can’t ask a question.  There is never a right or perfect question, as well as a dumb question.  I have an “open question” policy.  My hope is I can assist you with your loan, and during the loan process, make sure I’m answering your questions before you even have them.

There you have it; a few things that you shouldn’t do while in the loan process.  Believe me, following these “rules” will make the process so much smoother.  It’s easier to paper trail prior to an event happening vs. having to chase papers since it’s already done.  Just say “no” to the above so we can say yes to your loan approval.

If it wasn’t great enough that we just got a new issuance of money in the Dakota County area; we now have NEW first time buyer money in the Minnapolis and St. Paul area under the City Living Program. This money is just available in the geographical limits of the Minneapolis and St. Paul area, so no other areas of Hennepin County or Ramsey.  Having this program available is such good news. 

How do you qualify for this?  First, you must be a first time buyer, someone who has not owned a primary residence in the last THREE years.  There are income limits you must fall under and HOUSEHOLD income is calculated off all members in the household over age 18.  Here are the limits:

83,900   1-2 person household

92,290   3+ person household

There is also a purchase price limit of $376,870.  You cannot go over $1 above this!  I don’t think you’ll have any problem since this limit is quite sufficient to handle any properties that are perfect for first time home owners.  The sale price/purchase price limit is $376,870.  Another thing to know is NO personal property can be included in your purchase agreement.  That means anything that isn’t attached to the home — applicances are the most commom.  Don’t panic though — you will still be able to get these things agreed upon.  You definitely want to make sure you’re working with a knowledgable agent in this area.  I have a few partners that I can highly recommend!

Want the REALLY, REALLY good news?  Rates … and it’s all about rates isn’t it?  It shouldn’t be; but again, that’s another post.  Please note that you still must qualify for a regular loan.  Here’s the way I like to explain this.  As a buyer, you need to qualify or meet the guidelines for an FHA, VA or conventional loan.  Let’s call this the “Cake” you’re dying to eat!  Once you’ve got this qualification, then we can see if you meet the guidelines for the City Living program, which we’ll call the “Icing”.  If you’re like me — cake is ONLY good with icing!  So, again, you have to qualify for the cake and then have to meet the qualifications to get the icing drizzled all over it.  Nummy.  The “Sweet” taste of this is a rate of 4.75% on a 30-year OR a rate of 4.99% WITH 2% of the loan amount to be used toward down payment or closing costs.  Another important point, you DO need $750 of your own  money into the transaction, which cannot be a gift. 

They will FORGIVE this second loan if you occupy the home for 7 years.  If you sell under this time, the full amount you got for the second loan is due.  Fortunately, this loan is 0% interest and NO payments are ever due during your loan.  It’s like getting a “loan” from Mom and Dad — “just pay us back when you’re done with it”.  So, you sell, you pay back.

Since this is a first come first serve program, you definitely want to make sure that you’re not only pre-approved with a lender that knows these programs, but also knows how to explain the important nuances of them.  I can help you navigate the waters and make sure you’re sailing strong  during your trip as a first time home owner!!!!!!!

Can you say FINALLY???  We have been waiting patiently, or maybe for some, impatiently, for more money to come available.  It’s here.  And a week later, you will see money come out in the cities of St. Paul and Minneapolis for the City Living program – very similar to this.

The skinny on this first time buyer program?  Well, you need to be one, which means you could not have owned a home in the last 3 years.  Because this is a bond program, you will be offered a lower than market rate and good news … it doesn’t change with market volatility.  The rate is 4.99% AND depending on your household income, you could qualify for up to $10000 in down payment assistance.  The first time buyer assistance isn’t forgivable, meaning you need to pay the zero interest, down payment money back when you sell.  If you get $7000, then you pay back $7000.  It’s pretty cool — here’s money to help and just give it back when you’re done using it.  Oh is this awesome!

There are sale price and income limits for this program, as with all bond programs.

$83,900 1-2 person household

$92,290 3+ household

Maximum Sale price is $276,683

This isn’t like the other first time program they had called Silver Lining.  It’s not as restrictive.  No crazy strings like the house needs to appraise at 1% higher than the purchase price and there is no requirement for a special home inspection.  One thing that IS required is you have to attend the Homestretch class where you can sign up at http://www.hocmn.org .  If you’ve taken this course, it’s acceptable to use your current certificate of completion pending it’s not over a year old from the date of closing on a house.

So, now you have the AFTER closing tax credit up to $8000 and you can get up to $10000 BEFORE your purchase to use toward down payment and closing costs.  By all means, please call if you have any questions or want to take advantage of this program.  It’s first come first serve, so get out there and buy some of those great deals in Dakota County.  Oh and one important point, you DO need $750 of your own  money into the transaction.  This cannot be a gift.

By the way, not all lenders have access to this program.  Make sure you’re working with an expert in first time buyer programs.  It’s important you’re educated on how the program works, what the recapture tax is and other parameters for the program.