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Downpayment and Closing Cost Assistance

Virginia, Minnesota

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Income limit

80% AMI

Of area median income; varies by county and household size

Repayment

Deferred

No payments until the home is sold or refinanced

What is Downpayment and Closing Cost Assistance?

Downpayment and Closing Cost Assistance is a deferred second loan for homebuyers in Virginia, Minnesota.

  • AEOA's 7-county NE MN regional DPA. Up to $15,000 0% deferred second. 80% AMI ($53,350-$96,250). 640 FICO. FTHB required. Excludes Duluth (1 Roof territory).
  • Arrowhead Economic Opportunity Agency (AEOA) administers a deferred 0% second-mortgage DPA of up to $15,000 (subject to HOME/CDBG funding-cycle availability) for low-to-moderate-income first-time homebuyers purchasing a primary residence within the 7-county Arrowhead region of Northeast Minnesota: Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, and St. Louis counties (excluding the city of Duluth, which is served by 1 Roof Community Housing). Funded through Minnesota Housing's Impact Fund, federal HOME, CDBG, and local foundation grants, the assistance is structured as a deferred 0% interest second mortgage with no monthly payments, due in full upon sale, refinance with cash-out, transfer of title, or non-owner-occupancy. Buyers must complete AEOA's homebuyer education and counseling, contribute at least $500 of their own funds, and meet 80% AMI income limits.
  • Funding comes from CDBG, HOME, State, and Local Government.

Do you have to pay it back?

Downpayment and Closing Cost Assistance is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off.

  • Repayment is triggered by 0% interest deferred second mortgage. Balance due on sale, refinance with cash-out, transfer of title, or non-owner-occupancy.
  • The assistance is recorded in 2nd Lien position.
  • Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Downpayment and Closing Cost Assistance is open to first-time homebuyers and buyers who will live in the home as their primary residence.

The program requires

  • First-time homebuyer — with exceptions: FTHB requirement may be waived in federally targeted areas.
  • The home is occupied as a primary residence
  • On credit: 640 minimum FICO per first-mortgage product overlay.
  • A completed homebuyer education course, through Arrowhead Economic Opportunity Agency - HUD-approved housing counseling agency. Pre-purchase 8-hour homebuyer education (Framework or in-person at AEOA Virginia/Hibbing offices) plus one-on-one counseling required.
  • Residency: Property must be in the 7-county Arrowhead region (Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, St. Louis) excluding city of Duluth.
  • Citizenship or immigration status: U.S. citizen, permanent resident, or qualifying non-permanent resident alien per first-mortgage product overlays.
  • First-time homebuyer required (no ownership of a primary residence in the prior 3 years). Income at or below 80% AMI for the applicable HUD area: $53,350 (1-person) up to $96,250 (4-person/8-person household ceiling). Property must be located within the 7-county Arrowhead service area: Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, or St. Louis County (excluding the city of Duluth, which is covered by 1 Roof Community Housing). Must complete AEOA homebuyer education and one-on-one counseling. $500 minimum borrower contribution from own funds. Property must be primary residence within 60 days of closing.

The program excludes

  • Households above 80% of area median income

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

Downpayment and Closing Cost Assistance limits household income to 80% of the area median income, which varies by county and household size.

  • 80% AMI HUD non-metro NE Minnesota tier: $53,350 (1-person) up to $96,250 (4-person ceiling). Verify by household size at intake.
  • The limit applies to total household income, not only the borrower’s.
  • Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Downpayment and Closing Cost Assistance caps the purchase price as follows: Per MN Housing Start Up purchase price limits ($379,650-$515,200 by county) when stacked with MN Housing first mortgage.

  • Eligible property types include Single-family detached, condominium (project-approved), townhouse, PUD, manufactured home (real-property-titled), 1-2 unit owner-occupied.
  • New construction is eligible.
  • Manufactured homes are eligible.

Where does it apply?

Downpayment and Closing Cost Assistance serves buyers purchasing in Virginia, Minnesota.

How do you apply?

Applications for Downpayment and Closing Cost Assistance go through the administering agency, which publishes the current terms and the application steps on its own site.

  1. Take a homebuyer education course

    Required by the program, through Arrowhead Economic Opportunity Agency - HUD-approved housing counseling agency. Pre-purchase 8-hour homebuyer education (Framework or in-person at AEOA Virginia/Hibbing offices) plus one-on-one counseling required..

  2. Contact the administering agency to reserve funds

    Funds are reserved through Application via AEOA Housing Department intake. Pre-purchase counseling required., and are subject to availability.

  3. Work with a lender who handles the program

    Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.

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