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Residents in Southeast Minnesota looking to purchase a new home may be surprised to learn that the only no-down payment programs still available are offered through USDA Rural Development. First time home buyers may also qualify for a tax credit of up to $8,000.
Last year, USDA Rural Development provided Minnesotans with over $292 million in guaranteed and direct loans to help over 2,600 families living in rural communities become homeowners, many of whom now own their first home.
USDA Rural Development has funding available in two low-interest, no-down-payment home loan programs. Loans and some grants are also available to help families make needed repairs to their homes.
Eligible homes must be located in a community of 20,000 people or less (the cities of Austin, Rochester, Mankato, Winona and LaCrescent are all ineligible areas for the program). The home can be existing or new construction. Existing homes must be structurally sound and the property cannot have any income-producing outbuildings.
A family of four in Mower County with an adjusted annual income of up to $73,050 may qualify for Rural Development’s guaranteed home loan program. If that same family of four’s adjusted annual income is less than $47,100 they may qualify for a direct Rural Development loan with an interest rate subsidy. These income limits vary from county–to–county.
The maximum direct program loan limits for a single family home in the counties served through the Austin Area Office are as follows: Blue Earth $182,700, Dodge $183,500, Faribault $171,200, Fillmore $183,500, Freeborn $180,000, Houston $182,700, Mower $171- ,200, Olmsted $189,000 and Winona $183,500. Approval for the maximum amo- unt is based on household income and monthly debt obligations. No down payment is required and a portion of the loan closing costs may be included into the loan.
Under the direct loan program, an applicant may be eligible for payment assistance, which would subsidize the interest portion of the house payment down to as low as one percent, making the overall monthly payment more affordable.
USDA Rural Development’s guaranteed loan program is administered through local lenders who take the application, process it, and determine the acceptability of the home to be financed. When visiting with your local lender about home loans, be sure to ask about the Rural Development guaranteed program.
Along with home loans, funds are available from Rural Development to assist with improvements to community facility and infrastructure projects such as health clinics, community centers, public safety buildings and water and sewer systems. Financing also is available for businesses and economic development organizations looking to create jobs in rural communities.
For more information, call the Austin Area office at (507) 437-8247, ext 4, or visit the office between 8 a.m. and 4:30 p.m. at 1408 21st Avenue NW Suite #3, Austin, MN. More information can also be found at "http://www.rurdev.usda.gov/mn" www.rurdev.usda.gov/mn.
For more information on the First-Time Home Buyer Tax Credit, visit http://www.irs.gov/taxtopics/tc611.html.
The USDA is an equal opportunity lender, provider and employer. To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 20250-9410, or call 800.795.3272 (voice) or 202.720.6382 (TDD).
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