U.S. in Recession

Mpls says loan to lure home buyers worked

by Brandt Williams, Minnesota Public Radio

St. Paul, Minn. — Minneapolis city officials say a loan program designed to bring residents into areas hard hit by foreclosures, is a success.

More than three-fourths of people who bought homes in Minneapolis using the program are first-time home buyers.

The Minneapolis Advantage Program provides $10,000-loans to people who buy homes in specific neighborhoods.

City officials say they received more than 700 applications for the 50 available loans.

Eligible buyers had to be able to qualify for a prime rate mortgage. And so far, 45 of the 50 loans have closed.

A majority of the home buyers in the program are under 36 years old and white. And one in three of the buyers moved from the suburbs or St. Paul to buy into Minneapolis.

The loans can be used for closing costs, renovation or a downpayment. If the home buyer stays in the property for at least five years, the loan is forgiven.