Homeownership Connection

Programs & Resources
For Homebuyers 

Give Yourself Credit!
Downpayment Assistance Program
Home Stretch® Homebuyer Education
Pre-Purchase Counseling
Silver Lining Loan Program

Give Yourself Credit!
In the market for your first home? Make sure you Give Yourself Credit! through a new program from the Dakota County CDA that provides a financial resource to make your purchase successful.

Give Yourself Credit! provides homebuyers with a Mortgage Credit Certificate which is a federal income tax credit (not a deduction) equal to 20% of the annual interest paid on a mortgage loan. The credit reduces the amount of federal income tax a homebuyer is required to pay which helps free up income to qualify for a mortgage loan.

Example:

• A homebuyer qualifies for a mortgage loan of $175,000 at a fixed interest rate of 5%.
• Interest paid for the first year of the loan = $8,691
• Give Yourself Credit! first year tax credit = $1,738

The remaining 80% of the interest paid that is not part of the tax credit may still be taken as a deduction from the homeowner's taxable income. The actual amount of tax benefit will be limited by the homeowner's tax liability in any given year.

Give Yourself Credit! can be claimed each year during the term of the mortgage as long as the property remains the homeowner's primary residence. Unused credit may be carried forward for three years.

Homeowners may change their federal tax withholdings to increase their monthly take home pay or recieve the credit in a lump sum as a year end tax refund, limited to their actual tax liability.

Program Eligibility

• Homebuyers must be first time homebuyers or someone who has not owned their primary residence in the last three years.
• Income Limits: $83,900 for one or two person households; $92,290 for three or more person households
• Maximum Purchase Prices: $276,870 for single family homes, townhomes or condominiums; $389,205 for duplexes
• Properties must be located in Dakota County
• Homebuyers must occupy the home as their primary place of residence after purchase.

Eligible Financing
Give Yourself Credit! may only be used with 30-year amortizing fixed-rate FHA, VA or conventional mortgage loans that are acceptable to Fannie Mae or Freddie Mac. Loans may not exceed 1% for origination and 1% discount point. The credit can not be used in combination with a mortgage revenue bond loan (ie. First Time Homebuyer Loan Program).

Homebuyers closing before December 1, 2009 may also use the one-time $8,000 federal tax credit in addition to Give Yourself Credit!

Fees & Requirements

• An application fee of $575 is paid at the loan closing.
• Mortgage lenders may also charge a $150 fee as part of closing costs.
• Home Stretch Homebuyer Education certificate required prior to closing.

How to Apply for Give Yourself Credit!
Interested homebuyers must work with a mortgage lender to determine eligibility for Give Yourself Credit! and Downpayment Assistance Programs.

Give Yourself Credit! Lender List (PDF)

Questions? Call the CDA's Homebuyer Hotline at (651) 675-4442.

Downpayment Assistance Program
Homebuyers accessing the Give Yourself Credit! program can also apply for downpayment assistance loans of up to $10,000, depending on household income. Loans can be used towards the purchase of single family homes, townhomes or condominiums that do not exceed a purchase price of $276,683.

Loan Terms

• Zero percent interest
• No monthly payments
• Repayable when the primary mortgage is paid off, the home is no longer the primary residence, or when the home is sold or refinanced.
• Homebuyer must contribute a minimum of $750 of their own funds toward the purchase of the home.
• Home must pass a Housing Quality Standard (HQS) inspection conducted by the CDA.

Maximum Loan Amounts & Income Limits

Questions? Call the CDA's Homebuyer Hotline at (651) 675-4442.

Home Stretch® Homebuyer Education Program
Home Stretch teaches potential homebuyers about the entire homebuying process and the responsibilities of homeownership. Topics covered include: Budgeting and Credit Issues, Financing and Qualifying for a Home, Shopping for a Home, The Purchase Process, Closing on a Home and Life as a Homeowner.

Home Stretch is taught by professionals in the homebuying field. Participants must attend all nine hours of Home Stretch to receive a completion certificate.

The Dakota County CDA provides monthly Home Stretch classes and is a HUD approved housing counseling agency.

2009 Dakota County CDA
Home Stretch Schedule

The cost to attend the class is $15 per household for Dakota County residents and $25 per household for non-residents.

Pre-registration is required either by phone or online.

To register by phone, contact Rachel Smith at (651) 675-4471.

For a list of other metro area Home Stretch class dates, visit the Home Ownership Center's Web site at www.hocmn.org

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Pre-Purchase Counseling
The CDA's Pre-Purchase Counseling services provide free individual counseling to Dakota County homebuyers and can be accessed anytime during the homebuying process, whether you are buying a home now or in the future.

This program assists homebuyers in creating a plan to become successful homeowners. The plan may include: credit repair, creating a household budget in order to save for a downpayment on a home, identifying mortgage loan products that best meet the household's needs and/or examining and answering questions about loan documents.

If you have questions about the homebuying process or would like to schedule a Pre-Purchase Counseling appointment, contact Rachel Smith at (651) 675-4471.

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Silver Lining Loan Program
In today’s economy and housing market it is important to remember that there is a Silver Lining. Foreclosure rates have increased in communities across the nation over the past few years and now it's time to begin rebuilding and stabilizing neighborhoods.

To aid in this effort, the Dakota County Community Development Agency (CDA) created the Silver Lining Loan Program which will provide up to $15,000 to homebuyers purchasing bank-owned properties in areas of the county that have experienced higher than normal levels of mortgage foreclosures.

Loans may be used for:

• Up to 50 percent of the required downpayment
• Payment of normal and usual closing costs and/or
• Buy down of mortgage principal

Homebuyers will not receive any portion of a Silver Lining loan as cash.

Eligible Properties

• Single family homes, duplexes, townhomes and condominiums located in eligible areas of Dakota County that are unoccupied, foreclosed homes that are beyond the redemption period and are bank-owned.
  
  
• Eligible areas include:
  

  Apple Valley*	All areas eligible except small NE corner
  Burnsville*	All areas eligible except around Crystal Lake
  Eagan*	Most of the city is not eligible
  Farmington	All areas eligible
  Hastings	All areas eligible
  Inver Grove Heights*	Most of the area in western 2/3 of city is not eligible
  Lakeville	All areas eligible
  Northfield	All areas eligible
  Rosemount*	Most of the city is not eligible
  South St. Paul	All areas eligible
  West St. Paul	All areas eligible
  Smaller Cities	All are eligible except Lilydale and Mendota

  *Click on the city name to see a map with eligible areas. Consult with participating mortgage lenders to determine a property's eligibility in these cities.
  
  

• Ineligible areas: Mendota Heights and all Dakota County townships
  
  

• Maximum Purchase Price = $256,080
• Property must be purchased at a discount of at least 1 percent from the current appraised value.
• Appraisals will be ordered by the Dakota County CDA and will meet the Uniform Relocation Assistance and Real Property Policies Act criteria.
• Home must pass a Housing Quality Standard (HQS) inspection conducted by the Dakota County CDA.

Eligible Borrowers
Homebuyers who are income eligible and qualify for a traditional fixed-rate first mortgage loan can apply for a Silver Lining Loan through a participating mortgage lender.

Eligible Financing
Silver Lining loans can be used in conjunction with any fixed-rate FHA, VA, RHS, Fannie Mae or Freddie Mac insured loan product that is generally considered to be an “A” or “prime” lending product.

Silver Lining loans are not eligible for use with subprime, interest-only or balloon loans, or with adjustable rate mortgages (ARMs).

Loan Terms

• Zero percent interest
• No monthly payments
• Minimum loan = $1,000
• Maximum loan = $15,000
• Repayable when the primary mortgage is paid off, the home is no longer the primary residence or when the home is sold or refinanced.
• Considered a “special mortgage” under the terms of Minnesota Statutes 58.13. Loans will be separately secured by a Second Mortgage and Promissory Note.
• Home Stretch® Homebuyer Education certificate from a HUD approved counseling agency required prior to closing. The Dakota County CDA is a HUD approved counseling agency. For a list of other area HUD approved agencies visit www.hocmn.org

How to Apply
Interested homebuyers must work with a participating mortgage lender to determine eligibility for a Silver Lining loan.

Silver Lining Participating Lenders (PDF)

The Silver Lining Program is funded by the federal Neighborhood Stabilization Program through the U.S. Department of Housing and Urban Development. The program is part of the Dakota County CDA's Homeownership Connection services which provides resources to help homebuyers and homeowners be successful.

Questions?
Contact Stephanie Newburg at (651) 675-4466 or snewburg@dakotacda.state.mn.us