Down Payment Assistance
Program Guidelines

1. Program Summary:
Homeownership Opportunity Minneapolis (HOM) provides homebuyers assistance to purchase a home
in Minneapolis.

2. Eligible Borrower:
• Borrower must have a valid fully executed purchase agreement at the time of application.
• The Borrower does not have to be a first-time homebuyer.
• The borrower’s household income may not exceed 115% of the area median income (AMI). The income
of the following persons must be verified and included when calculating Annualized Gross Income:
o Anyone who will have title to the subject property and signs the Mortgage Deed.
o Anyone expected to reside in the subject property and who will be obligated to repay the
underlying mortgage loans (signs the Note) but who is not in title to the subject property; i.e. the
Co-Signer (not named in title to the subject property and does not sign the Mortgage Deed).
o The legal spouse of the mortgagor who will also reside in the subject property.
• For borrowers seeking an FHA insured mortgage as their primary loan financing, household income must
include the income of all residents of the household, whether or not they will be on the title of the
property or be obligated for repayment of the HOM loan.
• All cash buyers will be underwritten by the Program Administrator using standards approved by the City.

3. Eligible Properties:
• A single family (including a townhome or condominium) or duplex property located within the city limits
of Minneapolis.
• There is no sale price limit.
• The homebuyer must occupy the home within 60 days following the home purchase closing.

4. Loan Terms:
• Zero percent interest.
• No monthly payment.
• The loan is 100% repayable at the end of the life of the first mortgage OR refinanced OR when the
homeowner ceases to occupy the home as their primary residence OR transfer of title OR at the end of
the 30-year deferment period.
• The mortgage may be subordinated as part of a refinance of the primary loan. These loans are considered
a “Special Mortgage” under the terms of Minnesota Statute 58.13.

5. Loan Amount:
• For borrowers with household incomes at or below 80% of area median income the maximum loan will be
$10,000.
• For borrowers with household incomes greater than 80% of area median income up to a maximum
income of 115% of area median income the maximum loan amount is $5,000.

6. Use of Funds
• The payment of down payment costs.
• The payment of normal closing costs.
• Any portion of the loan that is not applied to the payment of down payment or closing costs must be
repaid to the City of Minneapolis and the loan balance will be reduced accordingly.
• The loan may not be used to reimburse a borrower for a purchase or transaction that has already
occurred.

7. Required Homebuyer Financial and Homeownership Counseling and Education:
• Homebuyers must complete homeownership and financial wellness counseling through a designated
HOM service provider. Homebuyers must have a financial wellness counseling certificate that pre-dates
the purchase agreement. Certificates older than one year will not be accepted.
• Homebuyers must complete homebuyer education through HomeStretch™ (sponsored by the Minnesota
Homeownership Center, 651-659-9336 or www.hocmn.org), Framework® (online homebuyer education
available at www.hocmn.org), or the Minneapolis Urban League American Dream Program.

8. Eligible Primary Financing:
• The loan may be offered in connection with any fixed-rate portfolio FHA, VA, Fannie Mae, or Freddie Mac
insured or uninsured loan product that is generally considered in the lending industry to be an “A” or
“prime” lending product.
• The loan may also be offered in combination with a contract for deed financed and held by a nonprofit
developer provided that the nonprofit developer does not sell the contract for deed without the written
approval of the City. The contract for deed program must be approved by the City prior to participation in
the Local program.
• This loan may not be used with sub-prime lending products.
• The Local program funds may be combined with other assistance programs to provide greater
opportunity for the borrower to secure the purchase of a home.
• This program may not be layered with any other City of Minneapolis homebuyer assistance programs.

9. Loan Security
• The HOM loan funds will be separately secured by a Promissory Note and Mortgage.
• The loan may be secured in a subordinate lien position behind other program funds.
• No title insurance is required.
• No mortgagee clause is required in the owner’s hazard insurance policy.

10. Catastrophic Language
• In the event the Mortgage holder and the servicer, in their sole and absolute discretion, after a loss
mitigation analysis, find that a catastrophic event, including but not limited to Borrower’s death or
extended illness, or the extended illness of a close family member who depends primarily on the
borrower for support, has occurred which substantially and permanently impairs their ability to repay this
Promissory Note and Mortgage and requires them to sell the Property for an amount less than the
existing balance on the Promissory Note and Mortgage, that portion of the lien of Promissory Note and
Mortgage that cannot be satisfied from the proceeds of such sale shall be released.