St. Paul Mayor Melvin Carter, left, Mikeya Griffin, Tara Beard and Anthony Bradford, cut a ceremonial ribbon in 2023, at Bradford's house. St. Paul's Inheritance Fund is a program designed to give Rondo neighborhood families displaced by the construction of Interstate 94 forgivable loans to purchase or fix a house. Bradford was the first recipient as his great-grandfather was forced to move his family when the highway was built in the 1950s. (Alex Kormann, Star Tribune/The Minnesota Star Tribune)

Deluged by applications and put on ice for more than two years, St. Paul’s down payment assistance program is finally open again.

Even as dozens of suburban buyers received aid from Ramsey County, St. Paul’s program for buyers in the city was closed to applications for so long because the city’s small team was overwhelmed by more than 700 applications, said Jules Atangana, St. Paul’s housing director.

He is looking forward to getting more help to prospective first-time homeowners in the city.

“I know that the market can feel gloomy out there, but we are working to make sure we have these resources for people,” Atangana said, “to give them that chance to get a home in St. Paul.”

The aid is meant to boost lower-income buyers’ purchasing power, said Rachel Finazzo Doll, St. Paul’s housing policy coordinator. Lower-income buyers can be eligible for up to $40,000 in aid, which opens up more options for buyers. Buyers who are the first in their families to own a home can get up to another $10,000.

There’s fierce competition for smaller homes, with people buying starter homes competing with downsizing buyers and landlords. Homes priced between $250,000 and $500,000 sell quickly, often for more than the asking price, according to a Star Tribune analysis.

Why the long wait for more aid?

Atangana said the combination of a long list of potential buyers, a small staff to review applications, and some misunderstanding about who was eligible for aid were among factors that kept the program closed since early 2023.

The city has tweaked the program in hopes of approving funds faster.

The last round of down payment aid helped 40 buyers in St. Paul, with 27 of those buyers receiving additional aid through a separate fund meant to help descendants of people who lost their homes in the historically Black Rondo neighborhood and when the West Side Flats, where many immigrants lived until the 1960s, were demolished.

Inheritance Fund

St. Paul’s Inheritance Fund is for descendants of St. Paulites displaced from Rondo and the West Side Flats generations ago. It has also been closed since early 2023, but is now open again.

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That fund can provide up to $100,000 for lower-income descendants of people who lost their homes during major construction projects that destroyed hundreds of homes in Rondo and the West Side .

The money is meant to address the loss of family wealth when the city and the interstate demolished homes that could have been worth much more today.

The Rondo Community Land Trust is working with the city to verify descendants, but Mikeya Griffin, the trust’s executive director, warned that the program has specific requirements too.

To be eligible for down payment assistance through the Inheritance Fund, prospective buyers must be descendants of homeowners, not renters. And they have to have lost their homes to the construction of Interstate 94 through Rondo and the Riverview Industrial Park construction in the West Side specifically, not other destructive urban renewal projects.

The Rondo Community Land Trust is planning information sessions this summer to help people figure out if they are eligible.

Suburban programs

St. Paul’s program is funded and administered completely apart from a parallel program run by Ramsey County, which started providing down payment assistance to buyers in 15 county suburbs in 2023 — but the program does not help anyone looking to purchase a home in St. Paul.

Ramsey County has provided down payment assistance to 96 families since the beginning of 2023, with Maplewood and Mounds View being the most common destinations for movers.

The program is closed now because all the current funding has been given out, county spokesperson Casper Hill said in an email, but the closure will be a matter of a few months, not years. Hill said the program is expected to reopen in early fall.

St. Paul City Council Member Cheniqua Johnson said she worried the city’s long wait to reopen its down payment assistance program pushed buyers to the suburbs.

Particularly on the East Side, in Johnson’s Ward 7, a prospective buyer from St. Paul can easily move into Maplewood. The suburb’s proximity lets them remain close to their communities, but leave the city of St. Paul.

“We’re competing to keep our Saint Paulites here in St. Paul.”