Minnesota Down Payment Assistance and First-Time Homebuyer Programs

Plenty of homebuyers are thinking about buying a home in Minnesota. Homebuyers in the state enjoy a solid economy, with plenty of job opportunities and a low cost of living. Minnesota is a state with plenty of natural beauty, with lakes and forest galore, with plenty of room for camping, hiking and other outdoor activities. In the big cities you can find a great art and scene as well.

Are you looking to buy a home in Minnesota? If so, we’ve collected homebuyer programs with down payment and closing cost assistance, affordable interest rates, and more benefits–some programs offer as much as $18,000 to help you buy a home so you can grab your new home in the Land of 10,000 Lakes.

Looking for assistance in Twin Cities?

This page lists all of the assistance available to Minnesota homebuyers, including statewide and local resources. If you’re looking for information about down payment assistance in Twin Cities only, you can find local information here.

Down payment assistance programs in Minnesota

Finding Minnesota down payment assistance is a great way to make it easier to afford to buy a home. In addition to conventional loans, there are FHA loan, VA loan and USDA loan options to consider. Some of these options will include mortgage insurance, so it’s important to consider the effect of these programs and any other factors on your monthly payment.

Minnesota Housing Start Up Program

The Minnesota Housing Finance Agency sponsors several programs designed to create more homebuyers. Start Up is a Minnesota Housing first mortgage that is designed specifically for first-time homebuyers, defined as someone who “has not had an ownership interest in a principal residence in the last three years.”

Sponsor: Minnesota Housing Finance Agency

Income limit: Up to $142,800 in 11 County Metro area, $135,700 in Dodge and Olmsted counties, $128,400 all other counties, depending on household size

Purchase price limit: $515,200 in 11 County Metro area, $472,030 in all other counties

Minimum borrower contribution: $1,000

Minimum credit score: 640

Other Eligibility requirements:

• First-time homebuyer
• At least one buyer must complete homebuyer education course
• Must live in the home

Borrowers who use the Start Up program are eligible for two different types of down payment assistance, a Monthly Payment Loan and a Deferred Payment Loan. For more information on the benefits and eligibility requirements, see below.

Monthly Payment Loan

Assistance amount: Up to $18,000

Interest rate: Same as the first loan

Repayment term: 10 years

Deferred Payment Loan

Assistance amount: Up to $16,500 ($18,000 if eligible for Deferred Payment Loan Plus)

Interest rate: 0%

Repayment term: 10 years. No monthly payments. Balloon payment due in full at the end of the mortgage term, or when the borrower moves, the property is sold or refinanced (unless refinancing with Step Up) or the first mortgage is paid off.

Minnesota Housing Step Up Program

The Step Up program is designed for a wider range of borrowers than the Start Up program. There is no first time homebuyer requirement, and the income limits are higher. That means that first time homebuyers who don’t qualify for Start Up can still qualify for Step Up to take advantage of a down payment assistance program.

Sponsor: Minnesota Housing Finance Agency

Income limit: Up to $185,000 in 11 County Metro area, $167,000 in all other counties, depending on household size

Purchase price limit: $659,550 in 11 County Metro area, $637,950 in all other counties

Minimum borrower contribution: $1,000

Minimum credit score: 640

Other Eligibility requirements:

• First-time homebuyer
• At least one buyer must complete homebuyer education course if all borrowers are first time buyers
• Must live in the home

Borrowers who use the Step Up program are eligible for a downpayment assistance program: Monthly Payment Loan. For more information on the benefits and eligibility requirements, see below.

Monthly Payment Loan

Assistance amount: Up to $18,000

Interest rate: Same as the first loan

Repayment term: 10 years

Twin Cities TruePath Mortgage

The True Path mortgage is run by TCHFH Lending Inc., the Twin Cities Habitat for Humanity’s mortgage company. It’s designed to help low and moderate income borrowers by homes in the seven-county metro area.

Sponsor: Twin Cities Habitat for Humanity

Income limit: Minimum: $45,000, Maximum: $94,650 for a family of four. To see income limits for other family sizes, visit their website: Income limits

Minimum borrower contribution: $3,000 plus the first year of homeowner insurance

Minimum credit score: 580, though 620 is preferred

Other Eligibility requirements:

• First-time homebuyer
• Complete Twin Cities Habitat for Humanity’s Homeownership Program
• Primary residence
• 6 months employment at current job with two years of employment history
• At least two years since bankruptcy and three years since foreclosure or short sale

Assistance amount: Limits monthly payments to 30% of household income for entirety of the loan

*For all DPA programs, income limits are regularly reviewed and updated. Be sure to check the most current limits before assuming you don’t qualify.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.