First-Time Homeownership Program

Applicant Eligibility

• 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.

Property Eligibility

• 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.

Loan Costs

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.