FIRST MORTGAGE
DOWN PAYMENT ASSISTANCE
MORTGAGE CREDIT CERTIFICATE
FIRST MORTGAGE
(Rates are subject to change)
Revolving first mortgage funds (first-come, first -served pool to be replenished as loans are pooled and delivered. The borrower receives a 30 year, fixed rate, fully amortizing first mortgage loan with 360 level monthly payments. Available first mortgage products include FHA, VA, and HFA Preferred conventional loans.
DOWN PAYMENT ASSISTANCE LOAN GUIDELINES
OVERVIEW
The Dakota County Community Development Agency (CDA) is committed to assisting low and moderate income households throughout Dakota County achieve the goal of homeownership. The CDA is also committed to helping to rebuild the housing market in Dakota County, which has been impacted by increased foreclosure rates. The Dakota County CDA offers down payment assistance (DPA) loans to help first time buyers purchase a home within Dakota County. The CDA provides DPA loans to bridge the affordability gap experienced by many low and moderate income buyers for the down payment and closing costs associated with the purchase of a home located in Dakota County. DPA loan funds may be used for down payment and closing costs. The funding process for DPA loans is the same regardless of the first mortgage product.
ELIGIBLE LENDERS
DPA loans may only be used in conjunction with a first mortgage loan to be made by a lender approved to participate in the Dakota County CDA’s 2012 Give Yourself Credit first time homebuyer program.
DPA LOAN FUNDING
PA loans will be closed in the name of the Dakota County Community Development Agency. The CDA will fund each DPA loan directly at closing, following the submission of a request for DPA funds by the first mortgage lender at least 3 business days prior to closing.
DPA LOAN HOUSEHOLD INCOME
Household income shall include the income of: (1) the mortgagor(s), (2) any person expected to both live in the residence and sign the note, and (3) any person who is both the legal spouse of a mortgagor and is expected to live in the residence. Income documentation, as indicated on the
DPA File Checklist, shall be submitted to CDA staff for review and approval. CDA staff will verify household income and confirm the amount of DPA funds the household is eligible to receive. Once household income has been verified and the DPA loan file documentation is complete, CDA staff will provide an approval to close form to the Participating Lender.
1-2 person household $94,300
3+ person household $108,400
DPA LOAN AMOUNTS MINIMUM AND MAXIMUM
The minimum DPA loan amount is $1,000. Households may receive a maximum loan amount of $8,500. In the event an appraisal comes in lower than the purchase price and the purchase price is not renegotiated to meet the appraised value, the DPA loan proceeds cannot be applied toward the difference between the appraised value and the purchase price. See the chart below for the current household income limits.
DPA LOAN PURCHASE PRICE LIMIT
The purchase price of the home cannot exceed $304,050. The purchase price limit is subject to change and will be updated by the CDA as necessary. (Rev. 10/01/18 effective for reservation (07/18/18 and after).
DPA LOAN ELIGIBLE PROPERTIES
Down Payment Assistance loan funds may only be used for the purchase of a single family home which will be used as the buyer’s principal residence. DPA loan funds may not be used for the purchase of duplexes.
DPA LOAN ELIGIBLE BUYERS
The homebuyer must qualify as a first time homebuyer. The homebuyer cannot have had an ownership interest in a property within three (3) years prior to the buyer’s application for a Down Payment Assistance Loan.
DPA LOAN MINIMUM INVESTMENT
The homebuyer must provide at least $1,000 for the purchase of the eligible property.
DPA LOAN HOMEBUYER EDUCATION
All homebuyers and their spouses must complete homebuyer education prior to closing on the purchase. Homebuyer education may be completed through the in person Homestretch Homebuyer Education course or through the Framework online homebuyer education course.
Homebuyers using the Framework online course must also complete a free one-on-one prepurchase counseling session with a CDA Homeownership Specialist. The homebuyer education certificate and confirmation of pre-purchase counseling attendance, if applicable, must be provided prior to CDA staff approving the DPA loan for closing. Registration information for homebuyer education courses and pre-purchase counseling sessions is available on the CDA’s website.
DPA LOAN REPAYMENT OF ASSISTANCE
CDA Down Payment Assistance funds are provided as a zero (0%) interest, deferred loan with no monthly payments. However, the full principal amount of the loan must be repaid at the time the homebuyer sells the property, refinances, or pays off the corresponding first mortgage loan. The term of the DPA loan will be the same as that of the related first mortgage loan. The DPA loan will be evidenced by a DPA Note and Mortgage, in the form available on the Program Website. The DPA Note and Mortgage will be held by the Dakota County Community Development Agency. There is no forgiveness period for the DPA loan. The full principal loan amount is due upon maturity or other repayment triggering event regardless of the length of time the homebuyer lives in the property. The CDA currently does not subordinate DPA loans at refinance. Partial or full repayment of the loan may be made at any time without a penalty for prepayment.
