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Homestead Incentive Loan Program

St. Cloud, Minnesota

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Assistance

$3,000

The maximum the program publishes — not an offer

Income limit

$128,500

The household income limit the program publishes

Price cap

$300,000

Highest purchase price the program allows

Repayment

Deferred

No payments until the home is sold or refinanced

What is Homestead Incentive Loan Program?

Homestead Incentive Loan Program is a deferred second loan for homebuyers in St. Cloud, Minnesota.

  • St. Cloud HRA forgivable DPA. Up to $10,000 0% (5-yr/20%/yr). Max PP $300,000. Income $111,800-$128,500. 640 FICO. No FTHB required.
  • The St. Cloud HRA Homestead Incentive Loan Program provides up to $10,000 in deferred forgivable down payment, closing-cost, and minor rehab assistance to homebuyers purchasing a primary residence within the City of St. Cloud, Minnesota. Funded through CDBG, HOME, and St. Cloud HRA local funds, the assistance is structured as a 0% interest deferred forgivable loan, forgiven 20% per year over a 5-year compliance period (full forgiveness at end of year 5) so long as the borrower maintains owner-occupancy. Maximum purchase price $300,000. Income limits $111,800 (1-2 person) to $128,500 (3+ person). No FTHB requirement.
  • Funding comes from Local Government, CDBG, and HOME.

How much assistance does it provide?

Homestead Incentive Loan Program offers up to $3,000 in assistance.

  • The program asks buyers to contribute $1,000 minimum borrower contribution from own funds.
  • The program can be combined with other assistance, subject to the rules of each.
  • Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

Homestead Incentive Loan Program 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 forgivable loan, forgiven 20% per year over 5-year compliance period. Sale, refinance with cash-out, transfer of title, or non-owner-occupancy during years 1-5 triggers proportional repayment of unforgiven balance.
  • 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?

Homestead Incentive Loan Program is open to buyers who will live in the home as their primary residence.

The program requires

  • The home is occupied as a primary residence
  • On credit: 640 minimum FICO per first-mortgage product overlay.
  • A completed homebuyer education course, through Central Minnesota Habitat for Humanity / Three Rivers Community Action (regional HUD-approved counselors) - pre-purchase 8-hour homebuyer education required.
  • Residency: Property must be in City of St. Cloud, MN.
  • Citizenship or immigration status: U.S. citizen, permanent resident, or qualifying non-permanent resident alien per first-mortgage product overlays.
  • Property must be located within City of St. Cloud (Stearns, Benton, or Sherburne County portions of the city). Maximum purchase price $300,000. Income up to $111,800 (1-2 person) - $128,500 (3+ person). Must complete HUD-approved homebuyer education. $1,000 minimum borrower contribution. 5-year owner-occupancy compliance period (forgiveness 20%/year). Sale, refinance with cash-out, transfer of title, or non-owner-occupancy during years 1-5 triggers proportional repayment.

The program excludes

  • Purchases above the $300,000 price cap
  • Households above $128,500

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?

Homestead Incentive Loan Program limits household income to $128,500.

  • 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?

Homestead Incentive Loan Program caps the purchase price at $300,000.

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

Where does it apply?

Homestead Incentive Loan Program serves buyers purchasing in St. Cloud, Minnesota.

How do you apply?

Applications for Homestead Incentive Loan Program 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 Central Minnesota Habitat for Humanity / Three Rivers Community Action (regional HUD-approved counselors) - pre-purchase 8-hour homebuyer education required..

  2. Contact the administering agency to reserve funds

    Funds are reserved through Application via St. Cloud HRA office., 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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