Home financing in Houston County.

Home financing is simply a loan you use to buy or improve a home, secured by the property itself. You borrow a set amount, agree to a repayment schedule (usually 15 or 30 years), and pay interest on what you owe.

Each monthly payment chips away at both the principal (the amount you borrowed) and the interest.

If you stop making payments, the lender can eventually take the home through a legal process called foreclosure — so it is important to borrow only what fits your actual monthly budget.

In Houston County, most home purchases involve one of three loan types:

• **Conventional loans** — offered by banks and credit unions, typically requiring a credit score above 620 and a down payment of 3–20%.

• **Government-backed loans** — FHA loans (low down payment, more flexible credit), USDA Rural Development loans (common in rural Minnesota, can be 0% down for eligible buyers), and VA loans (for veterans).

• **State-assisted loans** — Minnesota Housing Finance Agency (MHFA) programs that layer down payment help on top of a conventional or FHA loan.

For most buyers in Houston County, USDA Rural Development and MHFA programs are the most powerful tools on the table — not because federal programs are the headline, but because local lenders here are already approved to originate them.

Houston County has a population of roughly 19,000 people spread across small cities like Caledonia (the county seat), La Crescent, Spring Grove, and Hokah, plus dozens of rural townships. The local economy leans on agriculture (dairy, row crops, specialty produce), healthcare, small manufacturing, and trade jobs tied to the regional La Crosse, Wisconsin metro just across the river.

Because much of the county is designated rural by the USDA, a large share of properties qualify for USDA Rural Development guaranteed loans — one of the most accessible mortgage products available for working families. Income limits apply (roughly $110,650 for a 1–4 person household in 2024, subject to annual update), but many Houston County households fall within them.

**Solo contractors and self-employed workers** — including construction trades, farm workers, and small business owners — can qualify for home loans. Lenders will ask for two years of tax returns to verify income, so consistent filing is important.

**ITIN holders** — individuals who pay taxes but do not have a Social Security number — can also qualify through select local lenders and CDFIs. You will not be turned away just because you use an ITIN; the key is finding the right institution (see Section 4).

**Credit score guidance:** Most conventional programs want a 620 or above. FHA goes as low as 580 with 3.5% down. Some CDFI and MHFA programs have more flexible credit standards. If your score is below 580 today, a HUD-approved housing counselor can help you build a plan — usually within 6–12 months.

Every lender has its own checklist, but the following documents come up in almost every home loan application in Minnesota. Gather these before your first meeting — it speeds everything up and gives you a clearer picture of your own financial standing.

**Identity & residency**

• Government-issued photo ID (driver's license, passport, consular ID / matrícula consular)

• Social Security number or Individual Taxpayer Identification Number (ITIN)

**Income**

• Last two years of federal tax returns (all pages, all schedules)

• W-2s or 1099s for the past two years

• If self-employed: business tax returns (Schedule C or corporate returns), year-to-date profit and loss statement

• Most recent 30 days of pay stubs (if you have an employer)

• Award letters for Social Security, disability, or pension income if applicable

**Assets**

• Last two to three months of bank statements (all accounts)

• Documentation for any gifts toward your down payment (a gift letter from the donor)

**Property**

• Purchase agreement (once you have one)

• Address of the property you want to buy

**Debts**

• Account numbers and balances for credit cards, student loans, auto loans, or other monthly obligations

If any document is in Spanish or another language, some lenders and CDFIs have bilingual staff who can help you organize and explain them. Ask before assuming.