First Time Home Buyers: The City Living Program is Back in Minneapolis and St.Paul!

Special Assistance for Down Payment and Closing Costs, first Time Home Buyers

What is the CityLiving Home Program?
CityLiving is a program sponsored by the Cities of Minneapolis and Saint Paul that provides mortgage financing and also offers special assistance for down payment and closing cost. The program is restricted to first-time homebuyers (which means they have not owned the house they have lived in over the past three years), unless the house is located in a target area* or unless one of the borrowers is qualified veteran.How do I apply for this mortgage money?
You need to contact a lender on the CityLiving participating lender list. The lender can review your qualifications and will process your mortgage application.Do I have to attend a class to participate?
All first-time buyers must attend a Home Stretch homebuyer educational workshop. If there are two or more borrowers, all must attend the workshop. You can call 651-659-9336 begin_of_the_skype_highlighting              651-659-9336      end_of_the_skype_highlighting or visit www.hocmn.org to be referred to a class location near you.Do I have to be a first-time homebuyer?
You must be a first-time homebuyer unless you meet at least one of the following qualifications:You are buying in a targeted area; You are purchasing or refinancing a house and doing at least 1/3 of the current federal tax basis or value of the house in renovation work; or One of the borrowers is a veteran, defined as a person who serviced in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable. Veterans are only exempt from the first-time-homebuyer requirement once.What are the purchase price and income limits under the CityLiving Home Program?
The program may be used by homebuyers whose income and property sale price are below the following limits:

Purchase price limits Non-Target Area   Target Area*
  1 unit $276,870 $369,160
  2 units $389,205 $553,740
  3 units $470,472 $830,610
  4 units $584,666 $1,107,480
 
Program income limits Non-Target Area Target Area*
  1 & 2 Person Household   $84,000 $92,400
  3+ person household $92,400 $92,400

*A participating lender will be able to determine whether the house is in a target area based on the census tract.

What is the interest rate?
There are two interest rates for first mortgage loans depending upon whether or not you receive a second mortgage loan to help with downpayment or closing costs (“Downpayment Assistance Loan” or “DPL”). The rate for borrowers who also receive a DPL will normally be .25% higher than the loans that do not include assistance. The DPLs are non-interest bearing loans, as described below.

Are there funds available to help with my closing costs and downpayment?
Subject to availability of funds, anyone who qualifies for the CityLiving program can choose to also get a Downpayment Assistance Loan. The DPL proceeds can be used to pay closing costs and to make a down payment. All the proceeds of the DPL must be used for these costs. The borrower may not walk away from the closing with any of this money.

What are the terms of a Downpayment Assistance Loan?
The DPL is a non-interest bearing loan, with no payments due until the sale or refinancing of the home. If you continue to live in the financed home for 7 years, the DPL will be forgiven.What is the size of a Downpayment Assistance Loan?
The Downpayment Assistance Loan will be in the amount of 2% of the amount of the first mortgage.A lender told me what the interest rate is right now. Will the rate ever change?
Yes, until you lock in a rate with the lender, the rate that is available for the CityLiving program may change. Please consult a participating lender for the most current rate.Can I buy a house anywhere I want?
You can buy a house that is located anywhere within the city limits of Minneapolis or Saint Paul. The CityLiving program is not available in the suburban communities.Can I rent the house out?
The program requires the house to be owner-occupied. If you buy a two, three, or four unit house, you must occupy one of the units, but the other units may be rented out.What if I want to buy a townhouse or condominium?
The program can also be used to buy a condominium or a townhouse as long as it is located inside the city limits of Minneapolis or Saint Paul. Specific conditions may apply regarding approval of the townhouse or condominium project. Consult with a participating lender to see if the project meets the lending standard for the type of mortgage you are obtaining.Can I use mortgage funds to renovate a house?
Yes, under certain circumstances, the program can be used to purchase and fix-up a house or refinance the house you now own and include funds for house repair or improvement. Please consult a participating lender for specific information about the rules that apply. (Not all lenders do this type of lending.)Do I have to live in the house for a specific number of years before I can sell it?
No, there is no specific number of years you must live in the house before you sell it. However, there are two things to consider before selling.
(1) The program does have what is called a subsidy recapture provision. The recapture applies if you sell your home within nine years, but only comes into effect if there is a substantial increase in the sale price of the house and your household income during those nine years. Your lender will provide you with detailed information that will help you to understand this provision.
(2) If you received a Downpayment Assistance Loan, that assistance will need to be repaid in full if the house is sold before the seventh anniversary.Is the first mortgage assumable?
Yes, it may be assumed by a qualified buyer. The loan servicer will be able to process a request for an assumption of the loan.The lender I am now working with is not on the list. Can they become a participating lender?
Your lender may become a participating lender by sending an email to mark.anderson@ci.minneapolis.mn.us or stephanie.hawkinson.ci.stpaul.mn.us. The email should clearly to request to become a CityLiving lender and include in the email their

Name,
Company name,
Company address, and
Their telephone number.

Bridgewater Condos

 

Bridgewater Condos: Minneapolis Condo

Price range: $199,000 – $1,099,900
Units: 281
Unit Sizes: 982 – 2926
Stories: 7-10
Development Status: Complete
Sales Center: Open
Developer: Shamrock Development, Inc
Neighborhood: Mill District

Building Amenities: Community room, On site caretakers, Controlled Access Entry, Controlled Access Parking, Elevators, Fire sprinkler system, Rooftop deck and Fitness room, Wine Storage, Rooftop swimming pool and whirlpool, 1st Floor of the building has a florist, wine store, gym, vet, salon, market pizza place and chiropractor.

Breakdown: “Bridgewater Lofts put you in the heart of the downtown Minneapolis Mill District, overlooking the new park next to the Guthrie and giving you a spectacular view of the Mississippi River and the downtown skyline. This seven- and ten-story building has outstanding floor plans, quality features and upscale amenities that ensure your comfort and privacy while creating a sophisticated environment for entertaining friends and family. Be close to work but not far from play—and have time to actually enjoy yourself.” The Place for Lofts

Bridgewater Inventory and Floor Plans

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Designer Loft Available in the 801 Washington Lofts; by Rehkamp Larson Architects, Mark Larson, AIA and Will Spencer

Recently I had the opportunity to preview a new listing in the 801 Washington building in Minneapolis’ North Loop neighborhood with a client of mine.  I was quite impressed with the level of design and want to get the word out that this home is available for sale currently at the price of $449,900. **Request More Information or a Tour of this Property**

“The renovation of this downtown Minneapolis loft began as an effort to bring warmth, refinement, storage/display space for art, books and wine collections and better acoustic separation to a raw, drafty space located in the original loading dock area of the building.”

“A modern gas fireplace, clad in steel plate and wood slats, was added against an exposed concrete block wall with a 12’ long rolling steel book shelf below.  Tall mahogany shelving frames the glass garage door to the public courtyard and balconies were added to bring warmth and function to the space at its edges.  The kitchen, contained in the original brick elevator shaft, was extended and refinished with high gloss car lacquer, steel countertops, new lighting and a wood slatted island with a translucent resin top.  The resulting space is a testament to the creative process and the collaboration of client, architect and craftspeople.”

The above Artile was from HomeByArchitects.Org

Learn More About the Architect: http://rehkamplarson.com/

The property is currently listed by Edina Realty

Address: 801 Washington Ave N #115, Minneapolis MN 55401
List Price: $449,900
Association Dues: $409
Sq Ft: 1800
Bedrooms: 2
Bathrooms: 2
Parking: 2
Fireplace: Yes
Patio Space: Yes

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**Request More Information or a Tour of this Property**

Client of the Month-Downtown Journal Back Page

I would like to say thanks to everyone who supported me on this whole home buying process… it is definitely not easy going at it alone, so I appreciate all of you guys! I love you all! (See… I have a heart and I’m not intoxicated) ♥ – Maryan Kim

Downtown Minneapolis Tax Credit Activity ‘Wrap Up’

Well it was a wild ride!  The spring market is typically a busy time of year anyway but at DRG we have seen a significant increase in sales downtown Minneapolis over the last few months as folks rushed to beat the April 30th tax credit deadline.  FHA has been a priority for many first time home buyers this year.  After FHA did away with ‘spot approval’ for condo projects on February 2 many of these first time home buyers were subsequently looking only in buildings with full FHA approval.  This has limited those buyers only looking  to put down the minimum 3.5% as required by FHA but the good news is that most of remaining new construction projects downtown have at this point obtained FHA approval and the previously referred to glut is now arguably close to being wrapped up as FHA buyers have been funneled into the handful of FHA approved buildings downtown.

NEW CONTRUCTION CLOSE OUT UPDATE: The latest condo project to sell their last developer held unit was the SOHO Lofts, a live/work concept above 3 levels of commercial condo space. Master Development just placed their final unit into escrow this week. In addition, the Herschel Lofts are also down to their last 3 units out of 47.

Pending/Sold Update 2010

1 Bedrooms Closed: 40
1 Bedrooms Pending: 44
Average Sales Price (not including pending sales): $192,685

2 Bedrooms Closed: 71
2 Bedrooms Pending: 52
Average Sales Price (not including pending sales): $344,085

3 Bedrooms and Larger Closed: 20
3 Bedrooms and Larger Pending: 10
Average Sales Price (not including pending sales): $637,028

These statistics are interesting but not always the best way to gauge the market trends as there are many factors not outlined in the breakdown, such as units that were sold in foreclosure, short sales and any ‘fire sale’ developer held inventory that may throw the numbers off. In addition, stay tuned for the true spring market sales statistics as the current pendings turn into solds over the next 60 days or so.  Interest rates are still low, there are some excellent deals downtown right now and some exciting developements surrounding the North Loop/Twins Stadium.  We should continue to see some steady absorption this summer.  If you would like a more accurate breakdown for your Condo/Loft or Town Home please contact me with your address and I will proved similar data more specific to your home.

Downtown Minneapolis Home Owners are off to a Bullish Start for the Month of February

Downtown Minneapolis home owners are off to a bullish start for the month of February with a 37.1% increase in condo/home listings.  In February, 2009 there were 97 homes listed downtown compared to the 133 this past February.  Overall new listings are actually down year to date by -5.7% due to a slow January.  I suppose it is all about timing.  The Twins have their opening day only weeks away and there has been a real buzz downtown so the spike is not surprising.

The month of February had a decrease in sales of -12.9% compared to the previous year but the average sales price has jumped 28% from $250,000 to $320,000. There are some interesting things going on and I expect a busy 2nd quarter. MAR has provided some helpful statistics through their monthly market update referred to as ‘The 100′. 

The link below will take you to Hennepin county’s stats. If you would like up to date market statisitics for your neighborhood or are just interested in what your home is worth contact me and I am happy to run numbers!

http://www.mplsrealtor.com/downloads/the100/Minneapolis.pdf

**These numbers do not include the activity in March 2010

Caution: Are you Looking to Purchase a Condo or Loft Using FHA?

Are you looking to purchase a condo or town home with the current minimum of only 3.5% down? FHA is your only option right now.

When considering purchasing Condos or Townhouses in Minneapolis with an FHA loan these project must have already been approved by the FHA and HUD. There is no exception to this rule and it is advised that you start your search for approved Condo and Townhouse projects here. DO NOT DEPEND ON THE MLS FINANCING REMARKS through broker sites. Often times these are not updated or entered in correctly. Spot approval was eliminated Feb 2, 2010 and some listings have not been updated yet.

You will save lots of time working with a real estate professional that specializes in the market you are interested in. Some agents may unknowingly take you around to projects that do not fit your parameters, whether that be in respects to financing, style of building or general aesthetic preference. To be put in contact with a downtown condo agent that can better streamline this process click here.

If you are unclear if you are intending on using FHA financing you will need to consult a loan officer. Please keep in mind it is very important to already be pre-approved. To obtain your pre-approval and have an FHA specialist call you please click here.

Rent to Own, or Just Own and the Developer will Double Your Tax Credit: Must be Under Contract Before April 30th

Eat street

An innovative homeownership program

Base rent is market-rate. Check and compare. You can get 12 or 18-month options to purchase the condominium while you live there.
The “Equity Rent Sum” is equal to 20% of total rent payment. You get this as equity when you exercise your purchase option.
No option fee! A “Lease2own” exclusive.
You can exercise your option at any time, or extend for six more months, up to 18 months. No option extension fee.
Seller provides an early conversion credit in the first 12 months. Sliding scale bonus follows your rent premium payments.
Low cost title closing from Burnet Title.

How to “Lease2Own” at Eat Street Flats

Take a tour of Eat Street Flats in the exciting Eat Street District of Minneapolis. To contact a showing agent, complete and submit the form in the right hand column.
Fill out a Lease2own application. A modest $50 credit and criminal background application fee will be charged which is non-refundable. A deposit of one month’s rent is also due at time of application.
Upon approval, sign a Lease2own lease agreement; pay an amount equal to one month’s rent damage deposit per resident.
Pay first months rent upon move-in to your new home.
Build your equity while you live in your new home.
Exercise the purchase option within 12 months, or extend your option to 18 months.
Apply your equity rent sum to the purchase at closing.
Frequently Asked Questions

1. What is a “rent to own” purchase?

A rent-to-own program combines a lease with an option to purchase a condominium unit within a specified period at an agreed upon price. The consumer pays market rent which includes an equity rent sum that is credited to the purchase price at closing. If the purchase is not exercised, the buyer loses the equity rent sum.

2. What are the contract features of a rent to own purchase?

“Lease2own” at Eat Street Flats has four major provisions: a) The sale price; b) The base rent; c) the option period ; and d) the equity sum. These are set by the developer for specific units. Other rent-to-own programs also have an “option fee,” equal to 1-3% of the purchase price. That fee is not in the Lease2own program.

3. Is the rent inflated?

The rent is market rate. The developer has set aside units for this specific program based on competitive rents. When you compare square footages, high quality finishes, low cost of utilities, washer/dryer in the units, amenities and closeness to downtown, you will find a great value at Eat Street Flats.

4. Is the purchase price inflated?

The purchase price is consistent with the current urban condo market. In fact, the market determines the price.

5. What other costs am I responsible for?

In most cases, the rent includes parking, storage locker, water, sewer, and sanitation and management costs. You are responsible for your own heat, air-conditioning, electric, telephone, cable TV and internet.

6. Who should consider a rent to own purchase?

The rent-to-own program offers homeownership to consumers with little cash or limited credit history. The consumer is working towards qualifying for the mortgage they need before the option period expires. During the option period, they have the opportunity to build/rebuild their credit and accumulate equity while living in a new condominium unit.

7. Can I extend my option?

Yes. The Lease2own program comes with an automatic six month extension for buyers who want to build up more equity. Additional six-month option lease extensions are negotiable, up to a total of eighteen months.

8. What if I don’t convert to purchase?

The equity rent sum is forfeited, but you have no further obligation. There is no exit fee, lost option fee or other penalties. You simply return possession of the condominium unit to the developer in the condition you received it.

9. Where do I get the mortgage?

This is where the Lease to Loft© program really helps. The developer has negotiated mortgage options with some of the most competitive rates available for well qualified buyers. You are not obligated to use this feature of the program, but it is included in the package. Wells Fargo has recently secured FHA and VA Project Approval which means 3.5% down and forgiving guidelines. Now is a great time to secure a loan at a low interest rate

10. Are other incentives available?

Yes. Incentives are available on a sliding scale if you exercise your option before the expiration of the option. This is a feature unique to the Lease2own program. Ask a sales agent for details. Want to know more? Check out the The Mortgage Professor – a free consumer information web site by Author Jack M. Guttentag (Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania). He is widely regarded as the “go-to information source” for new home buyers. The site has a complete profile on “lease to-own” programs. Go to: www.mtgprofessor.com. Click Table of contents and then click: “Lease to Own House Purchase.”

FHA Premiums Increase March 30

Please be aware of this upcoming change as you work your current potential buyers. Case numbers will probably need to be ordered no later then March 30, 2010 to have your borrower get the “old” up front FHA Mortgage Insurance of 1.75% and now the new 2.25%. The increase will have a small negative impact on a borrowers monthly payment (roughly $3.00 per $100,000 of loan per month) Not a huge impact but one we all need to be aware is coming.

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-02ml.pdf