HF999

This bill aims to modify and provide additional funding for the Community-Based First-Generation Homebuyers Assistance Program in Minnesota. The key points of the bill are:

1. Increased Support: The Midwest Minnesota Community Development Corporation (MMCDC) is designated to administer the program, providing targeted assistance to eligible first-generation homebuyers. The assistance includes help with down payments, principal reduction, and closing costs.

2. Eligibility Criteria:

   • The household income must be at or below 100% of the statewide median income.
   • At least one adult in the household must be preapproved for a first mortgage and has never owned a home or lost one to foreclosure.
   • An approved homebuyer education course must be completed before signing a purchase agreement.

3. Financial Aid:

   • Assistance is capped at 10% of the purchase price of a one or two-unit home, not exceeding $32,000.
   • Starting in Fiscal Year 2027, the maximum assistance may adjust to 10% of the median home sales price from the previous year's Minnesota Realtors Annual Report.
   • The financial aid is presented as a no-interest loan that is forgivable over five years (20% forgiven annually).

4. Program Fund Usage:

   • Funds can be used for down payments, closing costs, or principal reduction.
   • Recaptured funds may be retained by MMCDC to assist other eligible homebuyers.

5. Administration and Reporting:

   • The program, administered by MMCDC, is available statewide and can include partnerships with other financial institutions and nonprofits.
   • MMCDC is responsible for yearly reporting to the legislature, detailing the usage and impact of the program including demographic breakdowns and the number of loans issued.

6. Appropriation:

   • $25,000,000 is allocated for Fiscal Year 2026 and $50,000,000 for Fiscal Year 2027 from the general fund to MMCDC for program operation and management.
   • Unused funds are to be returned to the Minnesota Housing Finance Agency at the end of each biennium.

This legislation aims to increase home ownership among first-generation buyers by reducing financial barriers and providing educational resources, enhancing the stability and prosperity of communities across Minnesota.