Housing Bill That Includes Down Payment Help Progresses At MN Capitol

Housing Bill That Includes Down Payment Help Progresses At MN Capitol

As of Tuesday, May 6, 2025, a significant housing bill that includes a program to assist first-generation homebuyers with down payments is progressing through the Minnesota Legislature. This initiative, which aims to make homeownership more accessible, particularly for underrepresented communities, is part of the House omnibus housing budget bill.

Here's a more detailed breakdown:

• The Program: This is a state-funded program designed to help individuals who are the first in their families to purchase a home by providing down payment assistance.
• Establishment: The program was initially established in 2023.
• Early Success: In its first seven months of operation, the program reportedly helped 600 families achieve homeownership.
• Impact on Underrepresented Communities: According to Representative Esther Agbaje (DFL-Minneapolis), a key proponent of the program, a significant 90% of the 600 families who received assistance during the initial seven-month period were from underrepresented communities. This highlights the program's effectiveness in reaching its intended beneficiaries.
• Current Status (as of May 6, 2025): The future of this successful program hinges on the passage of the House omnibus housing budget bill by the Minnesota Legislature. If the bill is approved, the program, which was initially established, will become permanent.
• Legislative Process: As of early May 2025, the House has passed its omnibus housing policy bill (HF2309) with broad support and sent it to the Senate. This bill includes adjustments to Minnesota Housing Finance Agency programs. The House's omnibus housing finance bill (HF2445), which likely contains the funding for the down payment assistance program, has also advanced from the House Housing Finance and Policy Committee. These bills are now likely headed to conference committees where differences between the House and Senate versions will be reconciled. The Legislature is working towards its constitutional adjournment deadline of May 19th.
• Related Existing Programs: It's important to note that Minnesota has other existing down payment assistance programs, some of which also target first-generation homebuyers. These include programs administered by the Minnesota Housing Finance Agency (MHFA) and the Midwest Minnesota Community Development Corporation (MMCDC). For instance, the MMCDC First-Generation Down Payment Assistance Fund offers eligible recipients up to ten percent of a home's purchase price, capped at $32,000, as a zero-interest loan that is forgiven over five years of owner occupancy. The Minnesota Housing's First-Generation Homebuyer Loan Program, which launched on May 6, 2024, provided a forgivable loan of up to $35,000 for down payment and closing costs but is currently closed as funds have been exhausted as of December 19, 2024. These programs have specific eligibility requirements related to income, asset limits, and completion of homebuyer education courses.

The potential permanence of the state-funded down payment assistance program within the House omnibus housing budget bill signifies a continued commitment by the Minnesota Legislature to address housing affordability challenges and promote homeownership, especially for those who lack generational wealth and come from underrepresented communities. The outcomes from the initial phase of the program demonstrate its potential to make a tangible difference in the lives of Minnesota families.

SOURCE: MN House