First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance)

What is First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance)?

First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance) is a deferred second loan for homebuyers in Rochester, Minnesota, administered by First Homes Properties (an initiative of Rochester Area Foundation).

• The First Homes Gap Loan provides 0% interest deferred down payment and closing-cost assistance exclusively to first-time buyers purchasing a home in the First Homes Community Land Trust. Gap loans are up to $10,000 for new construction and up to $5,000 for existing CLT homes, deferred up to 30 years (contiguous with the first mortgage) and due on sale, transfer, refinance, first-mortgage payoff, or loss of owner-occupancy. Borrowers contribute at least $500; a $400 processing fee is paid at closing.
• 0% interest deferred loan.
• Up to $10,000 new construction / $5,000 existing.
• No prepayment penalty.
• 30-year deferral.
• Covers down payment and/or closing costs.
• Stackable with MN Housing DPA.
• Funding comes from First Homes Properties / Rochester Area Foundation (Community Homeownership Impact Fund and charitable funding).

How much assistance does it provide?

First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance) offers between $1 and $10,000 in assistance.

• Award tiers: New-construction CLT homes: up to $10,000 and Existing CLT homes: up to $5,000. 0% interest, deferred up to 30 years (contiguous with first mortgage term).
• Buyer contribution: Minimum $500 from borrower's own funds (earnest money counts). No cash back at closing.
• The program can be combined with Minnesota Housing Start Up / Step Up DPA; other programs approved by First Homes and lender.
• Amounts are the program's published maximums, not an offer — First Homes Properties (an initiative of Rochester Area Foundation) determines any individual award.

Do you have to pay it back?

First Homes CLT Gap Loan (Down Payment & 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 Due on sale or transfer of title, refinance, payoff of first mortgage, or loss of owner-occupancy. No prepayment penalty. Subordination only permitted for rate/term refinance.
• The assistance is recorded in Second (subordinate to first mortgage) position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance) is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance) limits household income to 80% of the area median income, which varies by county and household size.

• At or below 80% AMI per PDF guidelines (6/2/2025): Olmsted & Dodge $100,500; other counties $93,600. Website (6/1/2026) shows $106,800 / $95,100 — use current HUD AMI figures annually.
• 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?

First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance) caps the purchase price as follows: Must be a First Homes CLT property; no separate maximum purchase price for the gap loan.

• Eligible property types include Single-Family Detached, Townhome, and Condo.
• New construction is eligible.
• Manufactured homes are not eligible.

Where does it apply?

First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance) serves buyers purchasing in Rochester, Minnesota.

How do you apply?

Applications for First Homes CLT Gap Loan (Down Payment & Closing Cost Assistance) go through First Homes Properties (an initiative of Rochester Area Foundation), which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through Three Rivers Community Action; Minnesota Homeownership Center (HOME); SEMMCHRA. HomeStretch certificate or equivalent required..

2. 2

   Contact First Homes Properties (an initiative of Rochester Area Foundation) to reserve funds

   Funds are reserved through Lender submits Gap Loan Application with required documents to First Homes; case-by-case approval based on lender-determined need., and are subject to availability.

3. 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.