Help for home buyers
Some of the biggest employers in the area are teaming up with Becker County and area city governments to help workers buy a home.
The idea behind the employer-assisted housing program is to provide an employee $5,000 or more in down payment assistance by tapping into the Greater Minnesota Housing Fund, which will provide matching grants of up to $2,500 per first-time homebuyer.
The businesses and local governments would kick in cash and tax credits to meet the matching requirements, and the program will be administered by the Midwest Minnesota Community Development Corp. in Detroit Lakes.
So far Lakeshirts, SJ Rhombus, Team Industries and Ecumen have expressed interest in participating in employer-assisted housing.
“It’s been very successful in Perham,” where it’s been used on and off for about 10 years and has helped businesses there retain employees, said Becker County Economic Development Coordinator Guy Fischer.
In Perham, the program is backed by Arvig and KLN Family Brands (Barrel O’ Fun, Tuffy’s, Kenny’s Candy and Nutheads).
The businesses and the Perham HRA provide up to $3,000 per homebuyer, who must work in or within a half-mile of Perham and have a letter of support from their employer.
The Greater Minnesota Housing Fund kicks in another $2,500, providing an incentive plan of $5,500.
For its employees, KLN Family Brands kicks in up to $10,000 more, for a total package of $15,500.
In Perham, family income can’t exceed $41,400 for a single employee or $53,300 for a family of three.
In Becker County, the income guidelines will be tougher: $34,550 for a single employee or $44,450 for a family of three.
The down payment assistance is structured as a 30-year, zero-interest loan that is paid back when the house sells or the first mortgage is paid off.
In part, that’s because structuring the assistance as a grant would count as income for the employee, and could cause problems at tax time.
Participating businesses and local communities benefit from a stable workforce and improved housing stock —and it allows businesses to more easily expand and recruit new employees.
Local governments can provide their share of the matching funds through tax abatements.
Cities that want to attract residents may want to provide a more generous abatement, Fischer said.
The Becker County Economic Development Authority supported the idea and recommended that the county board adopt it, which it did unanimously last week.
Becker County agreed to provide $10,000, or 20 $500 tax abatements, in the first year of the program, which will start Jan. 1.
“This is a well-thought out proposal,” said Becker County Commissioner Ben Grimsley.
“This is a great place to live and our employers are also looking for people — it could help attract people from outside the area.”