First Homes is a non-profit subsidiary of the Rochester Area Foundation with the goal of assisting individuals and families in the purchase of homes based on funding. First Homes offers homebuyers financial assistance to reduce monthly mortgage payments and also works in partnership with MN Housing, making home ownership affordable. In some cases the monthly mortgage payments for the homes are comparable to rent payment.
Financial Assistance for Qualified Buyers
"Start Up" Funds through the Minnesota Housing Finance Agency which provides down payment and/or closing costs. This is a 0% interest-free deferred loan that is repaid when you sell your property; refinance your property or when you've paid off your first mortgage. Must be owner-occupied. For first-time homebuyers or those who have not owned in the last 3 years.
"Step Up" Funds for non-first-time homebuyers to purchase or refinance a home. The program offers affordable, fixed-rate loans and access to Minnesota Housing Monthly Payment Loans for downpayment and closing costs for eligible borrowers through participating lenders. Must be owner-occupied.
Income guidelines listed on mnhousing.gov website.
First Homes - Gap Loan
Loans up to $10,000 may be available to buyers, if funding is available, and their lender determines it is needed in order to reduce the buyer’s 1st mortgage and/or pay for closing costs.
Deferred and Gap Loans are due and payable upon sale of the home, refinance or at the end of the term of the first mortgage. Certified Lenders determine eligibility for Deferred Loans.
Community Land Trust (CLT)
First Homes pays the subsidy of the lot/land and buyers purchase and own the buildings and improvements. Homeowners are given a renewable lease to the lot which the home is built. By not paying for the lot, the homeowner pays considerably less on their mortgage, making the homes very affordable. The bank evaluates the appraised value at the time of purchase. The CLT meets the loan to value (LTV) on the property required by lenders, usually eliminating Private Mortgage Insurance (PMI) premiums for buyers.
When the homeowner chooses to sell the home, First Homes Community Land Trust staff assists the homeowner in selling the property. Homeowners receive the equity they have earned and half the appreciation in market value of the home. The remainder of the appreciation stays with the home to ensure a supply of affordable homes in the greater SE MN area.