First-Time Homeownership Program
- Applicant Eligibility
- Property Eligibility
- Loan Costs
- Application & Disbursement
- Reach Out to a Loan Officer
The objective of the First-Time Homeownership Program is to encourage homeownership in Woodbury by providing financing to low and moderate-income first-time purchasers. Low-interest, deferred loans of up to $30,000 are available to income-qualified households who earn no more than $146,000. First-time home buyers are defined as a person or household that has never owned a home or has not owned a home in the last three years.
The purchase price of the affected homes may not exceed $419,000. Single-family detached houses, townhomes or condo units are eligible for this program.
The City of Woodbury Housing and Redevelopment Authority (HRA) has made down payment and closing cost assistance loans available; current available dollars for loans are based upon the fund balance for any given period. The maximum loan amount is $30,000. The loan funds can be used for down payment and closing costs. The borrower cannot receive any portion of these funds as cash.
The interest rate is below market rate and will be fixed with simple annual interest, with monthly installment payments of interest only. Borrowers aged 65 or older or who are military veterans shall receive a discounted rate. A 0% interest rate is available for first-generation homebuyers. Payment of principal will be deferred until sale, transfer of title, when the primary mortgage is paid off, or when the property ceases to be owner-occupied. Loan term shall not exceed 30 years.
Mortgage & Underwriting
All loans will be secured by a mortgage in favor of the Woodbury HRA. Applicant will be required to obtain title insurance on this loan for the City of Woodbury HRA.
The City of Woodbury HRA Loan Administrator undertakes a full manual underwriting process and encourages potential applicants to secure a pre-qualification to streamline the real estate process. The full manual underwriting process includes review of an applicant's credit, verification of employment and more. When verifying employment to project annual income, the Woodbury HRA Loan Administrator will consider all sources of household income including but not limited to overtime, shift differential, and child support.
Potential applicants are encouraged to reach out to the Woodbury HRA Loan Administrator as early as possible in the process to facilitate a successful outcome. Successful applicants will submit a loan application at least 30 days prior to the anticipated date of the loan closing.
- First-Time Homebuyer Status: Applicant(s) must be a first-time homebuyer (a person or household that has not owned a home within the last three years).
- First-Generation Homebuyer Status: first generation homebuyers shall have an interest rate of 0%.
- Debt-to-Income Ratio: Applicant "debt-to-income" ratio cannot exceed 50%.
- Current on Debt Payments: Applicant(s) must be current on any ongoing debt payments.
- Minimum Contribution: There must be a Minimum Contribution of 3.5% of the purchase price paid by or on behalf of the home buyer, capped at $10,000.
- Acceptable sources of the Minimum Contribution include earnest money, buyer funds brought to closing, lender credits or seller paid closing costs. The acceptable sources must be in the shape of seasoned funds that have been in documentable bank accounts of the applicant(s) for a minimum of ninety days prior to the loan closing.
- Buyer funds that result from a gift must be accompanied by a gift letter documenting the source as a relative.
- In no case shall proceeds from a loan or other debt instruments be allowed to meet this Minimum Contribution criterion.
- Down payment programs offered by the State of Minnesota (both due on sale and amortizing terms) would be acceptable sources to meet the minimum contribution.
- In no case shall proceeds from other personal loans, credit cards or debt instruments be allowed to meet this Minimum Contribution criterion.
- Income Limit: Applicant total gross annual household income shall not exceed $146,000.
- Education: All applicants must have 8 hours pre-purchase education or an online equivalent, as evidenced by an acceptable completion certificate. Applicants may work with eligible counseling agencies that are Housing and Urban Development (HUD)-approved that have adopted the National Industry Standards for Homeownership Education and Counseling. Applicants who have previously completed their pre-purchase education through an approved provider must have a completion certificate that is dated not more than 12 months prior to closing.
- Exception: Borrower does not need to be a first-time homebuyer if the property being purchased is in a foreclosed status, with the Woodbury loan recipient as the first owner-occupant after the foreclosure, or the property is in foreclosure prior to the sheriff's sale.
- Purchase price cannot currently exceed $419,000.
- Single family homes, townhomes, twin homes, or condominiums in the City of Woodbury to be used as the buyer's principle place of residence.
- The first mortgage must be a prime/A-rated fixed rate mortgage loan.
- Properties may not be within the flood plain as identified by FEMA.
Washington County Recording fee, title insurance, title company settlement fees, wire transfer fee and prepaid daily interest will be paid by the borrower(s) and may be paid from the Woodbury loan funds.
Credit report fee will be paid by the borrower(s) at application unless a credit report is shared by the first mortgage lender that is dated within 30 days of the application. There is a $25 processing fee requested after the loan estimate is provided to the home owner.
Application & Disbursement
The Woodbury Housing and Redevelopment Authority (HRA) has selected NeighborWorks Home Partners to administer the loan funds. Please visit the NeighborWorks website for an application and list of documents needed.
After receiving the application and all of the documentation listed on the Application Process Sheet, the following procedures shall apply:
- If the application meets the program requirements, the loan funds (not to exceed $30,000) will be wired to the title company and the Woodbury loan documents will be sent to the loan closing or title insurance company.
- The purchaser must sign the deferred loan note and mortgage at the loan closing. The loan closing or title insurance company conducting the loan closing will be responsible for recording the mortgage. Documentation of the recording must be sent to the Woodbury HRA. The purchaser will pay the filing fee.
- After the loan closing, the title company must provide the Woodbury HRA with the original signed loan documents including the Note and Closing Disclosure, the City of Woodbury HRA's Title Insurance Policy, and a copy of the first mortgage executed Closing Disclosure.
A wide range of loan officers have issued mortgages in first position in front the Woodbury HRA’s First-Time Homeownership Program. The list below recognizes individual loan officers solely on the basis of their having successfully closed loans benefitting Woodbury first-time buyers in the past 18 months and is not a referral or preference by the City of Woodbury or its HRA for any individual loan officer or lender.
|Alerus Mortgage||Karen Montour||Send an email|
|Bell Bank Mortgage||Kimberly Allen||Send an email|
|CMG Financial||A.J. Kozlak||Send an email|
|CMG Financial||Christopher Lee||Send an email|
|Cross Country Mortgage||Joe Juliano||Send an email|
|Edina Realty Mortgage||Aislin Rose||Send an email|
|Fairway Independent Mortgage Company||Becky Heller||Send an email|
|Guaranteed Rate||Aubrey Meier||Send an email|
|Ideal Credit Union||Barbara Kane||Send an email|
|Lake Elmo Bank||Leah Mackie||Send an email|
|Land Home Financial Services||Tony Wicke||Send an email|
|US Bank Home Mortgage||Karl Schlichting||Send an email|