Income Qualified

While North Star Neighbors is able to serve households earning up to 115% Gross Household Income (GHI), many of our subsidy resources are restricted to 80% GHI. We expect this to change in the future.

Ability to qualify for a mortgage:

NSN does not provide financing of homes but refers buyers to local participating lenders. Though highly subject to change, in order to qualify for a mortgage you typically need to meet the following criteria:

• Credit: You should have a good credit rating (640 or higher) with no recent bankruptcies. We can help you determine your current credit score and discuss ways to improve it. Please note: Credit score minimum requirements vary by lender and program. While 640+ is recommended, Lenders may require a higher score.
• Debt: Lenders determine your allowable total monthly housing payment including the principal, interest, taxes and insurance on a home mortgage (typically restricted to 25% of your gross monthly income). On the back end, buyers are restricted to a 40% debt-to-income ratio. Debt includes your monthly minimum credit card payments, car payments, student loans and your new housing payment. NSN staff can help you calculate this percentage during your initial meeting. Generally, monthly debt of more than 10% of monthly income in addition to housing costs may make qualification more difficult.
• Employment: You should have proof of steady employment or income for at least the past year.
• Assets: North Star Neighbors allows households to retain liquid assets up to 30% of their CLT purchase price. For example, if a household is paying $200,000 for their CLT home, they would qualify as long as they retain no more than $60,000 in liquid assets after the purchase of their CLT home. Similarly, a household paying $170,000 for their CLT home would have a liquid asset limit of $51,000. In the event of extenuating circumstances, North Star Neighbors will consider exceptions to this limit. Additionally, in the event that subsidy sources have different asset limits, the stricter policy will be followed.
• Cash contribution requirement: NSN requires a minimum cash contribution from households of $2,000. Depending on subsidy available at the time of purchase, you will also be required to pay some or all of your closing costs. NSN will be able to give you a better picture of the cash you’ll need to have to purchase during our initial meeting.

Willingness to own a home through our program:

NSN homeownership is very similar to market-rate homeownership, but it’s also different in very important ways. Community land trust buyers agree to receive a portion of the home’s appreciation at resale, limiting their equity in the home. CLT owners also agree to inform the CLT of any significant changes made to the home (those that require a permit). When considering the spectrum of housing, community land trusts fall between renting and ownership. NSN staff will work with you to ensure your understanding of the unique aspects and goals of our program prior to entering into a purchase agreement for a North Star Neighbors home.