Article by Kevin Cederstrom in the 5/15/08 New York Mills Herald
Families unable to purchase a home through traditional mortgage financing may have another option. Otter Tail-Wadena Community Action Council offers a program to sell refurbished homes to low-income families on a no interest, no down payment contract for deed at zero percent interest for 30 years.
Community Action is currently renovating a home in New York Mills and is accepting applications for purchase of the 3-bedroom house, located at 550 Gilman Street on the east side of town. An open house is scheduled for May 15, 5-7 p.m. For more information on the application process contact Diane Leaders at Otter Tail-Wadena Community Action Council, 385-2900, ext. 136.
Under the Minnesota Urban and Rural Homesteading (MURL) program, Community Action purchases and rehabilitates homes, and sells to qualifying families in Otter Tail and Wadena Counties. Eligible buyers are required to pay 25 percent of their adjusted gross monthly income for the house payment. Through the program, CAC has sold four houses - three in New York Mills and one in Wadena County. The majority of the renovation is being done by Community Action’s weatherization department.
“We’re looking for a family that needs some housing and that would fit well within the community,” Leaders said.
For this particular 3-bedroom house Leaders said, they are looking for a family that fits well with the community, has kids, and would utilize the large back yard to garden. The purchase program is intended for people who have good jobs but have experienced credit problems or have lost a home previously through bankruptcy, and are working their way back financially to home ownership.
The buyer must meet these criteria:
- Cannot have owned a home in the previous three years.
- The family income cannot exceed 60 percent of Otter Tail and Wadena Counties’ median income, which is $34,020 gross annual income for a family of four.
- 25 percent of household monthly adjusted gross income must be sufficient to cover the monthly payment required for principal, taxes and insurance.
- Must complete Home Stretch (home buying education) and Financial Literacy classes.
Special consideration will be given to applicants who meet one or more of the following:
- The applicant is currently living in substandard housing.
- The applicant is homeless
- The applicant is living in overcrowded conditions
- The applicant does not qualify for a conventional loan due to inability to provide a down payment, excess debt to income ratio, lack of income or poor credit history.
Homebuyer Requirements
- must be first time homebuyers
- must be homeless, receiving public assistance or unable to qualify for traditional mortgage financing
- must qualify as low income household at time of purchase. “Low income” shall be defined as 60 percent of the area median income
- must occupy the eligible property as a principal residence.
Once the home is sold the purchasing family must recertify by income each year, meaning if their income goes up or down the payment goes up or down accordingly. CAC has advertised for applications the last two weeks. If a suitable family isn’t found to purchase the house CAC will open the application process again.
Minnesota Urban and Rural Homesteading (MURL) is a state-funded program which provides homeownership opportunities to homebuyers who will assist in stabilizing declining neighborhoods. The MURL Program is designed to arrest or prevent the spread of blight through the preservation of existing, dilapidated single family housing by promoting a financing mechanism to acquire and rehabilitate such housing. Homes are sold to At-Risk homebuyers, who agree to follow a “good neighbor” policy, via an interest free Contract for Deed.
The NYM Youth Council met on Saturday May 17th to plan our next step. After a few activities we were ready to brainstorm and the ideas rained down upon us! Click here for details (nym-youth-council-5-17-meeting-notes.doc). Major outcome of the meeting is to Take Action on Fridays in June picking up trash around town. We plan to ask for pledges from sponsors to support our efforts and begin raising the funds we need for our the NYM Youth Center as well as “Show Up” and take action on issues that impact our community. 
