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University District Home Buyers Incentive Program


Now more than ever, it makes sense to live close to the U!

by Deborah Stull Kinsley

small house


December 17, 2008

In recent years, the Office of University Relations and the Relocation Assistance Program have partnered to support the initiative, "Living Close to the U." This program encourages University employees to explore the benefits of living close to the Twin Cities campus. While some of the benefits are obvious--saving transportation costs and commuting time--others may be more intrinsic--being located in the heart of the Twin Cities and experiencing the rich diversity of the metropolitan area and the small-town feel of local communities and neighborhoods.

University employees who have chosen to live close to the U know of these benefits first-hand. Calder Hibbard, Minnesota Forest Resources Council, says, "There are lots of reasons why my wife, children, and I love living near campus. One is that we can be a one-car family. It saves us thousands of dollars a year, and we get the satisfaction of living in an environmentally sensible way. The transit service in this part of the city works really well for us."

Mike Ramolae, Parking and Transportation Services, says, "My neighborhood (Marcy Holmes) is close to everything. I can walk to east Hennepin, Dinkytown, and downtown. I live close to where I work, and my time is valuable. I don't want to spend it commuting."

University financial help

In the face of the current housing crisis, the U of M is stepping up its efforts to assist U employees by offering an incentive program to home buyers. The University District Home Buyer Incentive Program is designed for University employees seeking to purchase a home in one of the University District neighborhoods. These neighborhoods include: Cedar Riverside/West Bank, Marcy Holmes, Prospect Park East River Road, and Southeast Como. This program was developed through a partnership among the University, the City of Minneapolis, and the West Bank, Marcy Holmes, South East Como, and Prospect Park East River Road neighborhood associations.

To be launched on January 1, 2009, the Home Buyer Incentive Program provides down payment or closing cost assistance through a $10,000 two-percent interest loan that requires no monthly payments and is forgivable over five years.

The incentive program is available to any eligible University employee buying a home in the University District and planning to live in the home as an owner occupant and who also qualifies or is receiving a traditional (prime or A-rated) fixed-rate first mortgage loan or who is making the purchase by cash.

Terms

The loan program is subject to the following terms:

1. Two-percent interest

2. No monthly payment

3. The loan will be forgiven over a five year time period from the date of closing, with forgiveness occurring at a rate of 20 percent each year on the anniversary of the closing date.

4. The loan is due on sale, transfer of title, when the primary mortgage is paid off, or when the property ceases to be the owner's primary place of residence, except that in the case of a refinance, the loan may be subordinated subject to the Subordination Policy in effect at the time of the request for subordination.

5. These loans are considered a "Special Mortgage" under the terms of Minnesota Statute 58.13. The mortgage may be subordinated as part of a refinance of the primary loan; however, the owner must receive counseling regarding their refinance transaction. Proof of the completion of the counseling will be required prior to approval of the subordination in a refinancing.

6. Borrowers will agree to a 'right of first offer and refusal' which requires the borrower to offer the home to the entity who holds the lien on the property, should they decide to sell. If the lien holder cannot offer a price satisfactory to the owners, they may sell through conventional channels.

For more information on eligibility or other details of the University District Home Buyer Incentive Program, see Relocation Assistance Program.

If you have additional questions or would like to complete a loan application, contact the Greater Metropolitan Housing Corporation Housing Resource Center, at 612-378-7985.

For information about the University District Alliance, see Alliance.

For further information, contact:

Jan Morlock, director of Community Relations, University Relations.

Mary Everley, director of the Relocation Assistance Program, Office of Human Resources.

Deborah Stull Kinsley, communication project manager, Office of Human Resources.