An Advantage to Buying in Minneapolis- By: Jamie Mathwig
If one single thing comes to define the first two decades of the new millennium, it could well turn out to be that dreaded 'F-word' – foreclosure.
Communities throughout North America have been, and continue to be, devastated by this most onerous of social epidemics, and a fail-safe antidote doesn't look likely to appear any day soon. A number of programs, at both governmental and regional level, have been introduced to assist the growing number of homeowners in financial trouble. These initiatives have certainly helped in many cases but, still, the threat of foreclosure looms large for many householders around the country.
One particularly innovative scheme was launched last year in Minneapolis, Minnesota. The express intention of this ground-breaking project, was to get buyers into houses in those areas most badly affected by foreclosures. A rash of vacant homes was sweeping across certain districts of the city, and in an effort to prevent these neighborhoods from slipping into irreparable decline, incentives to assist with purchases were introduced.
Following a successful pilot in 2008, the Minneapolis Advantage Program was born. The Federal Home Loan Bank of Des Moines awarded $1.5 million to the city, adding significantly to the $500,000 in local funding, and the scheme was officially launched in early April 2009. The results have been extremely encouraging.
In a nutshell, the program helps fund down payments and closing costs, with the express goal of preventing certain districts from suffering, as the result of an increase in mortgage foreclosed properties. A loan, up to $10,000, forgivable over five years and with zero-percent interest, is available to qualifying buyers. If the buyer sells within the five year period, a proportion of the loan is payable; the amount is dependent on the period of time that has lapsed.
There are, of course, a number of conditions that must be met, in order for an application to be successful. Initially, the potential purchasers are required to attend a Home Stretch home buyers' workshop. Only detached single-family or duplex homes that have become vacant through foreclosure, and are in the areas specified by the program, can be bought with funding from the Minneapolis Advantage. Each house must be owner occupied in accordance with the program, although a duplex unit may be rented out, as long as the owner resides in one of the pair. The scheme is not restricted to first-time buyers, and monies may be also be used to cover the costs of repairs to a house, as long as it is being bought as a primary residence, in the prescribed neighborhoods.
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To discover more about the Minneapolis Advantage Program visit www.ci.minneapolis.mn.us/cped/Mpls_Advantage_Demo_Program.asp
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