What is the CityLiving Home Program?
CityLiving is a program sponsored by the Cities of Minneapolis and Saint Paul that provides mortgage financing and also offers special assistance for down payment and closing cost. The program is restricted to first-time homebuyers (which means they have not owned the house they have lived in over the past three years), unless the house is located in a target area* or unless one of the borrowers is qualified veteran.
How do I apply for this mortgage money?
You need to contact a lender on the CityLiving participating lender list. The lender can review your qualifications and will process your mortgage application.
Do I have to attend a class to participate?
All first-time buyers must attend a Home Stretch homebuyer educational workshop. If there are two or more borrowers, all must attend the workshop. You can call 651-659-9336 or visit www.hocmn.org to be referred to a class location near you.
Do I have to be a first-time homebuyer?
You must be a first-time homebuyer unless you meet at least one of the following qualifications:
You are buying in a targeted area; You are purchasing or refinancing a house and doing at least 1/3 of the current federal tax basis or value of the house in renovation work; or One of the borrowers is a veteran, defined as a person who serviced in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable. Veterans are only exempt from the first-time-homebuyer requirement once.
What are the purchase price and income limits under the CityLiving Home Program?
The program may be used by homebuyers whose income and property sale price are below the following limits:
| Purchase price limits |
Non-Target Area |
Target Area* |
| |
1 unit |
$276,870 |
$369,160 |
| |
2 units |
$389,205 |
$553,740 |
| |
3 units |
$470,472 |
$830,610 |
| |
4 units |
$584,666 |
$1,107,480 |
|
| Program income limits |
Non-Target Area |
Target Area* |
| |
1 & 2 Person Household |
$84,000 |
$92,400 |
| |
3+ person household |
$92,400 |
$92,400 |
*A participating lender will be able to determine whether the house is in a target area based on the census tract.
What is the interest rate?
There are two interest rates for first mortgage loans depending upon whether or not you receive a second mortgage loan to help with downpayment or closing costs (“Downpayment Assistance Loan” or “DPL”). The rate for borrowers who also receive a DPL will normally be .25% higher than the loans that do not include assistance. The DPLs are non-interest bearing loans, as described below.
Are there funds available to help with my closing costs and downpayment?
Subject to availability of funds, anyone who qualifies for the CityLiving program can choose to also get a Downpayment Assistance Loan. The DPL proceeds can be used to pay closing costs and to make a down payment. All the proceeds of the DPL must be used for these costs. The borrower may not walk away from the closing with any of this money. |
What are the terms of a Downpayment Assistance Loan?
The DPL is a non-interest bearing loan, with no payments due until the sale or refinancing of the home. If you continue to live in the financed home for 7 years, the DPL will be forgiven.
What is the size of a Downpayment Assistance Loan?
The Downpayment Assistance Loan will be in the amount of 2.5% of the amount of the first mortgage.
A lender told me what the interest rate is right now. Will the rate ever change?
Yes, until you lock in a rate with the lender, the rate that is available for the CityLiving program may change. Please consult a participating lender for the most current rate.
Can I buy a house anywhere I want?
You can buy a house that is located anywhere within the city limits of Minneapolis or Saint Paul. The CityLiving program is not available in the suburban communities.
Can I rent the house out?
The program requires the house to be owner-occupied. If you buy a two, three, or four unit house, you must occupy one of the units, but the other units may be rented out.
What if I want to buy a townhouse or condominium?
The program can also be used to buy a condominium or a townhouse as long as it is located inside the city limits of Minneapolis or Saint Paul. Specific conditions may apply regarding approval of the townhouse or condominium project. Consult with a participating lender to see if the project meets the lending standard for the type of mortgage you are obtaining.
Can I use mortgage funds to renovate a house?
Yes, under certain circumstances, the program can be used to purchase and fix-up a house or refinance the house you now own and include funds for house repair or improvement. Please consult a participating lender for specific information about the rules that apply. (Not all lenders do this type of lending.)
Do I have to live in the house for a specific number of years before I can sell it?
No, there is no specific number of years you must live in the house before you sell it. However, there are two things to consider before selling.
(1) The program does have what is called a subsidy recapture provision. The recapture applies if you sell your home within nine years, but only comes into effect if there is a substantial increase in the sale price of the house and your household income during those nine years. Your lender will provide you with detailed information that will help you to understand this provision.
(2) If you received a Downpayment Assistance Loan, that assistance will need to be repaid in full if the house is sold before the seventh anniversary.
Is the first mortgage assumable?
Yes, it may be assumed by a qualified buyer. The loan servicer will be able to process a request for an assumption of the loan.
The lender I am now working with is not on the list. Can they become a participating lender?
Your lender may become a participating lender by sending an email to mark.anderson@minneapolismn.gov or michelle.vojacek@ci.stpaul.mn.us. The email should clearly to request to become a CityLiving lender and include in the email their
Name,
Company name,
Company address, and
Their telephone number.
We will send out the lender application. There is a fee to sign up which will be outlined in the information that is sent to the lender. All lenders are subject to program approval and brokers may need to make special arrangements with US Bank which is the master servicer for the program. |
