The Minnesota Housing Finance Agency (MHFA) provides essential Start Up first mortgage loans and accompanying Down Payment Assistance (DPA) options to make buying a home in the Moorhead and Clay County area achievable. We are experts in maximizing your state-funded benefits.
🎯 Quick Facts: MHFA Start Up Program & DPA Options
The MHFA's Down Payment and Closing Cost Loans offer two primary options (Deferred or Monthly Payment), with up to $18,000 in assistance available for eligible borrowers.
| Key Requirement | MHFA Start Up Program Guidelines |
|---|---|
| Minimum FICO Score | Generally 640 (Required for Start Up mortgage and DPA). |
| Maximum DPA Loan | Up to $18,000 (Deferred Payment Loan Plus or Monthly Payment Loan). |
| Borrower Contribution | Minimum $1,000 contribution from borrower funds OR 1% of the purchase price. |
| Homebuyer Education | Required for all first-time homebuyers using the program. |
External Citation: For the most current purchase price and income limits for Clay County, please refer to the official Minnesota Housing Finance Agency Homeownership Programs website.
đź“š Focus: MHFA Loans, Local Schools, and Community Integration
MHFA is focused on building sustainable communities. For buyers in Moorhead, this means access to reputable school systems and diverse property types.
MHFA Down Payment Loan Structure
The two main DPA loan types offered with the MHFA Start Up first mortgage are:
- Deferred Payment Loan (DPL): This is a 0% interest loan with no monthly payments. The principal repayment is deferred until you sell the home, refinance the first mortgage, or pay off the home. This drastically lowers your monthly housing expense.
- Monthly Payment Loan: A loan that requires monthly repayment over a fixed term (typically 10 years). While it has a payment, it offers slightly more flexibility for some financial situations.
Community Benefit: Moorhead Area Schools
The quality of the local school district often significantly impacts home values. Buyers in the Moorhead area often prioritize the highly-regarded Moorhead Area Public Schools (MAPS). We specialize in matching your housing needs to school attendance boundaries in Moorhead and Dilworth, MN, ensuring your investment is sound and family-focused.
âť“ MHFA Grant Program FAQs
Q: What credit score is required for the Minnesota Housing Start Up program?
A: The MHFA Start Up program generally requires a minimum FICO Score of 640 for all borrowers using the program. This minimum score ensures you meet the underlying requirements for the associated DPA loan options.
Q: Is the MHFA Down Payment Assistance a grant that is forgiven?
A: The standard DPA is a loan, not a grant. However, the Deferred Payment Loan (DPL) is 0% interest and requires no monthly amortization until you sell or refinance. This is often functionally similar to a grant in terms of short-term budget relief.
Q: How much do I need to contribute out-of-pocket for an MHFA loan?
A: Borrowers must contribute the lesser of $1,000 or 1% of the purchase price from their own funds or reserves. This "minimum contribution" is a core program rule, regardless of the DPA amount you receive.
Q: Can I use the MHFA program if I owned a home outside Minnesota previously?
A: If you have not had an ownership interest in a principal residence in the last three years, you are typically considered a First-Time Homebuyer Program and are eligible for the Start Up program, regardless of prior ownership status in another state.