On homes like this across New Ulm, first-time homebuyers are able to receive a loan and assistance with down payment and closing costs. This comes from the Minnesota City Participation program, which City Council approved entering for the third year in a row Tuesday.

NEW ULM — For a third year, prospective first-time homebuyers in New Ulm will be able to apply for a program that helps with the cost.

The City Council approved participating in the Minnesota City Participation Program (MCCP) for 2024 at their Tuesday meeting. The program is available for anyone making less than $111,700 in a 1-2 person household or $128,400 in a three-person household, looking at a house for less than $472,030. The program includes a first-time homebuyer loan with down payment and closing cost assistance if needed.

City Manager Chris Dalton said the program has been extremely popular so far. While the program is usually funded at $175,000 initially, around $400,000 ends up being used. The extra money comes from other cities where the program is not as popular, leaving money that can be redistributed.

“They want to allocate everything,” Dalton said. “If you go over [the amount given to you] and some other cities are underperforming, they take some of that money to help fill in. They don’t want to not fund a loan for someone eligible and qualified.”

Currently, the program is available through Frandsen Bank and Trust and Bank Midwest. Dalton said, given the current housing and economic situation, the program has helped many.

“It helps first-time homebuyers get into homes they otherwise wouldn’t be able to get into,” he said. “With first-time homebuyers, they may not understand you need X amount for a downpayment, but then you also have closing costs. They assist with these costs and help first-time homebuyers in that middle to low-income area we’re looking to get into homes. It’s been a pretty successful program.”

Dalton said besides the max house price and income threshold going up to match inflation, there aren’t any changes from the previous year. The program requires nothing from the city other than agreeing to help the Minnesota Housing organization with local publicity.

Councilman Les Schultz made the motion to approve participation in the MCCP, while Councilman Dave Christian seconded.