A few homebuyers in Carver County are getting extra help as they try to purchase their first family house.

In conjunction with National Homeownership Month in June, the Carver County Community Development Agency (CCCDA) launched a new down payment and closing cost assistance program to make housing units more affordable for low- to moderate-income families.

According to Allison Streich, executive director of CCCDA, the program received $1 million in funding for the first round of assistance. The funding comes from the Local Affordable Housing Aid program, approved by the Minnesota Legislature in 2023 and fueled in part by a 0.25% metro area sales tax.

The loan program offers eligible borrowers up to 25% of the purchase price of a home, not to exceed $50,000. The 20-year loan carries an interest rate of 0%, with 5% of the original principal forgiven annually as long as the original homeowners own and live in the house.

“The Carver County Down Payment Assistance Program is more than financial support — it’s a gateway to homeownership for families who might otherwise be priced out,” Streich said. “By offering up to $50,000 in forgivable assistance, the county is investing in stable communities, economic opportunity, and the future of local residents.”

According to Streich, many Minnesota counties and cities offer similar first-time homebuyer programs, but assistance and loan terms vary widely.

“In a market with high interest rates, rising home prices and tight inventory, programs like this can bridge the affordability gap, especially for first-time buyers,” she said. “The forgivable loan structure and no interest make it a strong financial tool.”

If a prospective buyer hasn’t already applied for the assistance program, it’s probably too late to participate this time around. But Streich assured that the metro sales tax will continue to fund the assistance program on an ongoing basis.

Streich said the county currently has seven active reservations with buyers, amounting to 40% of the $1 million budgeted. The CDA is processing an additional 25 applications, which is enough to exhaust the initial funding.

“The program aims to provide an affordable pathway to homeownership for low- to moderate-income households, encourage homeownership within Carver County, and maintain a strong residential real estate market across all income levels and property types,” Streich said.

To apply for the program, buyers must complete a pre-screening step, pay a $100 application fee and submit to the full underwriting process. To qualify for the program, buyers must attend a “Home Stretch” financial education class prior to receiving a reservation and purchase agreement.

Once approved, funds are reserved for 150 days. Borrowers have 60 days to close after signing a purchase agreement.

“While structured, the process is not overly complicated, especially for those already working with a lender,” Streich explained.

There are several requirements that borrowers must meet to qualify for assistance, including but not limited to the following:

• Buyers must contribute a minimum of $1,000 of their own money toward the purchase of the home.
• The purchase price of a home cannot exceed $415,000.
• The house must have an appraised value equal to or greater than all loans.
• Applicants must be current on all ongoing debt payments.
• Buyers cannot own other real estate.
• Homes must be move-in ready and not require repairs or major construction.
• Single-family detached homes, duplexes, twin homes, condominium units and townhomes are eligible under the program.
• Buyers must secure homeowners’ insurance for the property.
• A full-home inspection is required prior to closing.

For more information, follow the link to the CCCDA website.