First Time Homebuyer Program available for Dakota County residents

First-time homebuyers in Dakota County can access fixed, low-interest mortgage financing along with a Mortgage Credit Certificate and up to $10,000 in down payment and closing cost assistance through the Dakota County Community Development Agency’s First Time Homebuyer Program.

Approximately $30 million in first mortgage financing is available along with a mortgage credit certificate option that will help about 200 households achieve home ownership. The current interest rate is 3.375 percent.

First-time homebuyers or households that have not owned a home in the past three years can use this financing with 30-year FHA or VA loans.

Veterans do not have to be first-time homebuyers and are eligible for this program if they have not previously used a first-time homebuyer program.

Single-family homes, townhomes or condominiums in Dakota County are eligible for the program with a maximum purchase price of $271,590.

Income limits are $82,300 for a one- or two-person household and $90,530 for a three- or more person household.

Along with the first mortgage financing, homebuyers can elect to apply for a mortgage credit certificate through the Give Yourself Credit! program. This certificate provides a federal income tax credit equal to 35 percent of the annual interest paid on the loan and helps reduce the amount of federal income tax the household is required to pay.

Up to $10,000 in down payment and closing cost assistance loans are also available and amounts vary based on income. These loans feature zero percent interest and are deferred until the first mortgage is paid off, the home is sold or refinanced, or the home is no longer the buyer’s primary residence.

Buyers accessing the First Time Homebuyer Program must complete an approved homebuyer education course before closing on their loan. The Dakota County CDA offers monthly Home Stretch homebuyer education workshops and the new online homebuyer education program called Framework.

The Dakota County CDA partners with the local mortgage lending community to administer the program. Participating lenders have the necessary paperwork to qualify households for the first-time homebuyer financing, mortgage credit certificate and down payment assistance.

These programs are part of the Dakota County CDA’s Homeownership Connection resources that provide homebuyers and homeowners tools to be successful. For more information, visit www.dakotacda.org or call 651-675-4442.

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