St. Paul is quietly cranking up one of its most talked-about housing tools, widening who qualifies for its Inheritance Fund and tweaking citywide down-payment rules as the long-paused program comes back into regular use this spring. The refresh is designed to let more buyers stack forgivable loans on top of each other, with extra bonuses for people tied to neighborhoods that were bulldozed for mid-century highway and industrial projects. City leaders are pitching the changes as a way to start rebuilding generational wealth in families that lost it during past redevelopment.
What changed
As reported by the Pioneer Press, the City Council and the Housing & Redevelopment Authority voted this month to broaden who can tap into the Inheritance Fund layers of assistance, including new categories of descendants connected to neighborhoods hit hard by urban renewal. City documents and staff briefings lay out a clear goal: make it easier for people with ancestral ties to properties taken for Interstate 94 or for the Riverview Industrial Park on the West Side to prove it, then reward them if they buy inside those historic boundaries. Advocates and several council members pushed for the looser rules so more households with direct historic ties can actually use the aid, according to the Pioneer Press.
How the money stacks up
The Housing & Redevelopment Authority’s official Downpayment Assistance Program guidelines spell out the math in black and white. Standard citywide assistance can reach up to $40,000. A first-generation homebuyer bonus tacks on another $10,000. The Inheritance Fund’s "generational wealth" layer adds $50,000, and the Inheritance Fund "community wealth" bonus chips in $10,000 more. Add it all together and a qualifying household can receive as much as $110,000, according to the City of Saint Paul.
These awards are set up as 0 percent interest subordinate loans that sit behind the primary mortgage and forgive gradually on an amortized schedule, as long as the buyer stays put as an owner-occupant.
Funding and timeline
Housing & Redevelopment Authority records show the city closed dozens of down-payment assistance loans in 2025 and early 2026 and spent about $2.3 million on that aid during the reporting period. HRA staff told commissioners they were targeting March for adoption of the revised guidelines, with a phased reopening that starts in April.
Coverage in the Star Tribune and city budget notes have pointed to roughly $2.6 million that will be available to the program once the council signs off on transfers from the Housing Trust Fund, which would give staff more room to actually process and fund awards this year.
What’s left out
Not every housing program survived the reshuffle. City staff told reporters the standalone homeowner rehabilitation program was not reopened to new applicants last fall, a move that some advocates argue limits options for small but urgent repair jobs at the same time the city is expanding help for down payments. The Pioneer Press noted that the city backed dozens of repair projects in recent years while steering its attention and dollars toward the revamped down-payment program, and council members have urged staff to keep repair access in the mix even as they lean into homeownership investments.
According to city staff, applications will be handled on a first-come, first-served basis. Descendants seeking Inheritance Fund layers will still have to clear the program’s verification requirements. The city’s down-payment assistance webpages and the HRA staff report include an interest form, step-by-step application guidance and a contact email for would-be buyers. For details and the program interest form, prospective applicants are directed to the City of Saint Paul’s down-payment assistance pages and the HRA materials linked above.
