NeighborhoodLIFT FAQ

 

Minneapolis-St. Paul NeighborhoodLIFT Frequently Asked Questions

 

Q. What are the terms of the NeighborhoodLIFT funding?
A. NeighborhoodLIFT down payment assistance is provided as a five-year forgivable loan for owner-occupied properties. As long as the borrower(s) resides in the home, the loan will be forgiven at 20 percent each year on the anniversary date of settlement. If the house is no longer a principal residence or the property is transferred, repayment of the balance of funds will be immediately due. For any questions on this please reach out to NeighborWorks Home Partners directly.

Q. Are there income restrictions for eligible borrowers?
A. Yes. Income limits are set for each market for NeighborhoodLIFT funds. The income limits are calculated based on all borrower income. In Minneapolis and St. Paul, borrower income may not exceed $77,840 as determined as family median income as determined by Federal Financial Institutions Examination Council.

Q. If a person living in the home is not included on the loan to purchase the home does their income count in the calculation of income?
A. No. Only borrower(s) income is calculated. In Minneapolis and St. Paul, all borrower income may not exceed $77,840.

Q. What first mortgage lenders are eligible to participate in the NeighborhoodLIFT program?
A. A complete list of participating partner lenders is available here.

Q. What is homebuyer education and how do I get it?
A. Homebuyer education is an eight-hour class that provides information about the home buying process. It is available virtually, through self-guided platforms, or in-person (as available). It can be completed in person or online. Homebuyer education must be provided by a HUD-Approved Housing Counseling Agency that has adopted the National Industry Standards for Homeownership Education and Counseling. View list of NeighborhoodLIFT-approved providers here.

Q. When do I need to complete my homebuyer education?
A. Homebuyer education must be completed prior to submitting a request for NeighborhoodLIFT down payment assistance.

Q. I have a homebuyer education certificate from an agency that is not HUD Approved. Will that be accepted?
A. No. Only homebuyer education certificates from HUD-Approved Housing Counseling Agencies that have adopted the National Industry Standards are eligible for NeighborhoodLIFT funds. View list of NeighborhoodLIFT-approved providers here.

Q: Is other counseling available through the NeighborhoodLIFT program?
A. Yes. The NeighborhoodLIFT Home Ownership Counseling Initiative offers credit and homebuying counseling to individuals at no cost though approved counseling agencies. This counseling is an added benefit and does not meet the eight hours of homebuyer education required to receive LIFT down-payment assistance. A list of these counseling providers is available here. Please note, some approved counseling agencies may charge an upfront fee which is reimbursed when the NeighborhoodLIFT Home Ownership Counseling Initiative requirements are met.

Q. Can I own another home and still qualify for the NeighborhoodLIFT program?
A. Yes, if you currently own a home but will be selling it prior to closing on the NeighborhoodLIFT property, you can still be eligible for the program. At the time of closing you may not own any additional properties including investment properties.

Q. Are short sale properties eligible for NeighborhoodLIFT funds?
A. Short sale properties are eligible for the program. When you are ready to move forward in the LIFT process, you must upload the purchase agreement for the short sale property, which must be signed by the buyer and the seller. The lender (lien holder of short sale property) must ratify the agreement prior to closing. NeighborhoodLIFT funds can be used in connection with the financing of a Wells Fargo short sale but only if Wells Fargo is not the new first mortgage lender on the short sale purchase. Another lender must originate the new first mortgage loan.

Q. What expenses can I use the NeighborhoodLIFT down payment assistance to cover as part of my home purchase?
A. NeighborhoodLIFT down payment assistance funds may be used for any eligible purpose including closing cost assistance, down payment assistance, or borrower minimum out-of-pocket investment if allowed by the first mortgage loan program. NeighborhoodLIFT funds may cover the closing costs or out-of-pocket requirements of an FHA first mortgage or other type of first mortgage loan; however, for an FHA mortgage the borrower must still provide their own 3.5 percent down payment. You should consult directly with your first mortgage lender and NeighborWorks Home Partners to determine how NeighborhoodLIFT program funds may be used in connection with your home purchase.

Q. Can I qualify for other down payment assistance programs along with NeighborhoodLIFT funds?
A. Yes. There may be other programs eligible and available for layering together with NeighborhoodLIFT down payment assistance. Programs sponsored by local municipalities or the state of Minnesota could potentially be included. Information on other assistance programs coming soon.

Q. How do I know if I am eligible for additional down payment assistance programs?
A. Eligibility for each program is determined by the program administrators. Contact them directly to find out if you are eligible for their programs.

Q. Are there any properties that are not eligible for NeighborhoodLIFT funds?
A. Yes. Wells Fargo REO (real estate owned) properties are not eligible for NeighborhoodLIFT funds. To learn if a property is a Wells Fargo REO click here.

Q. Once a buyer is determined to be eligible for NeighborhoodLIFT, how quickly will the process move forward?
A. Buyers determined to be eligible will be issued a Reservation Letter holding funds for 90 days. During this time borrowers will need to shop for and sign a contract to purchase an eligible home. Buyers who have a fully signed contract will be required to upload the contract to their account with NeighborWorks Home Partners. If the property is eligible, a LIFT commitment letter will be issued that is valid for 60 days or 180 days if the property is new construction, with a copy sent to the first mortgage lender. The first mortgage lender will then prepare documents for closing and provide copies of the required documents to NeighborWorks Home Partners at least 10 calendar days prior to closing. NeighborWorks Home Partners will then have all documents prepared for the closing.

Q. Once a buyer receives a reservation letter NeighborhoodLIFT, how quickly will the process move forward?
A. You will not move for in the NeighborhoodLIFT process until you have a fully executed purchase and sale agreement. You should upload your purchase and sale agreement to your account upon execution. You will receive a LIFT commitment letter approximately three business days after NeighborWorks Home Partners reviews your purchase and sale agreement. Be sure to notify your first mortgage lender that you are under contract and have received a NeighborhoodLIFT commitment letter. The first mortgage lender will then prepare documents for closing and provide copies of the required documents to NeighborWorks Home Partners at least 10 calendar days prior to closing. NeighborWorks Home Partners will then have all documents prepared for the closing.

Q. Do I need to be under contract to buy a home to submit a request NeighborhoodLIFT funds?
A. No, you do not have to be under contract to submit a request.

Q. Will extensions be allowed for clients who do not have a contract on a home at the end of the 90-day reservation period?
A. No. Extensions are only available for clients who have met the program requirements and are preparing for settlement.

Q. If a contract falls through can the client change to another property?
A. It depends on where the client is in the process. If this happens the client should follow up with NeighborWorks Home Partners directly.

Q. What happens if I can’t become pre-approved for a first mortgage?
A. Customers who are not able to qualify for a mortgage loan should contact NeighborWorks Home Partners to explore course offerings and/or housing counseling opportunities.

Q: What happens if I am not selected after the random selection takes place?
A: You can come back and check this webpage to see if funds become available in the future. We encourage you to reach out to NeighborWorks Home Partners and schedule a counseling appointment to determine your homeownership options.

Q: Once I have an executed purchase and sale agreement how long will it be before I can close on my new home?
A: It depends. You will need to work with your first mortgage lender, real estate agent and NeighborWorks Home Partners to identify your closing date. You should include a minimum of 30 days to close in your real estate contract.

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NeighborWorks Home Partners

NeighborWorks Home Partners’ mission is empowering individuals and communities by helping people buy, fix and keep their homes. Learn more.

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