For many Minnesotans, the “American Dream” is priced out of reach.
With limited housing inventory, high interest rates and incomes that have not kept pace with inflation, the need for down payment assistance has far from slowed, said Jason Peterson, CEO of NeighborWorks Home Partners.
Sponsored by Rep. Hodan Hassan (DFL-Mpls), HF2585 would appropriate $20 million in fiscal year 2024 to the Housing Finance Agency for a home purchasing financing program.
The onetime funds would provide forgivable grants of down payment assistance to first-time homebuyers through non-interest-bearing, fee-based loan products.
The House Housing Finance and Policy Committee laid the bill over Wednesday for possible omnibus bill inclusion.
NeighborWorks would administer the program. The organization currently offers people resources to buy, fix and keep their homes, supporting approximately 1,000 families a year through their homeownership journey.
“Over the last seven years alone we have provided 1,375 down payment assistance loans,” said Peterson.
Rep. Brian Johnson (R-Cambridge) appreciates a proposed requirement that an approved homebuyer education course be completed before purchasing a property, as well as the minimum $1,000 contribution from an eligible homebuyer.
Other qualifying stipulations include owner occupation of the home and an income at or below 130% of area median income.
Supporters hope the bill can help close the racial gap in homeownership.
Black Minnesotans, particularly those who are new immigrants, have been left out of the generational wealth building of homeownership, said Rep. Mohamud Noor (DFL-Mpls).
“As homeownership is the single biggest wealth generator and the best way to end generational poverty, it is important that we support families to achieve this goal,” said Peterson.