If you are considering buying a home for the first time, your perfect home might seem just out of reach financially. But if you live in Minnesota or are thinking of moving there, the state has several programs for first-time buyers to assist with a down payment and closing costs. Here is a list of programs currently available for Minnesotans, both new and repeat buyers, to get you started on your way to purchasing your dream home.
Who Qualifies as a First-Time Homebuyer in Minnesota?
Most organizations in the state, such as the Minnesota Housing Finance Agency, define a first-time homebuyer as any individual who has not owned and occupied their principal residence for the past three years. When reviewing the guidelines for each program, check the specific requirements for exceptions.
Statewide First-Time Buyer Programs
The following programs are available statewide to Minnesota residents.
Start Up Loan
First-time buyers may be eligible for a Start Up loan through Minnesota Housing if they meet the income limits and credit score requirements. When approved for a Minnesota Housing mortgage, borrowers may also be eligible for a down payment and closing cost loan of up to $17,000. Purchase price limits and other requirements may apply, so be sure to visit the Minnesota Housing website for details.
Deferred Payment Loan
In combination with the Start Up Loan program, a Deferred Payment Loan may offer eligible borrowers up to $10,000 to put toward a down payment and closing costs, and a Deferred Payment Loan Plus may offer up to $13,000 based on certain criteria. This program is available only to first-time homebuyers, and eligibility requirements may apply. Learn more about down payment and closing cost assistance by visiting the Down Payment and Closing Cost Loans page on the Minnesota Housing website.
Statewide Non-First-Time Buyer Programs
While the above programs are strictly available for first-time homebuyers, other statewide programs assist individuals looking to move from the current home they own to another.
Step Up Loan for Repeat Homebuyers
Minnesota Housing offers a Step Up Loan for Repeat Homebuyers. Repeat buyers can take advantage of an affordable, fixed-interest purchase loan with as little as 3 percent down. Approved borrowers may also be eligible for down payment or closing cost loans through Minnesota Housing. Other criteria such as income limits and credit requirements may apply, so be sure to check the website for more information and to apply.
Monthly Payment Loan
Both first-time and repeat buyers who qualify for a Minnesota mortgage may be eligible for the Monthly Payment Loan program. A Monthly Payment Loan offers eligible borrowers up to $17,000 to be used for down payment and closing cost assistance. Interest rates are equal to your first mortgage rate and payments are made monthly over a 10-year term. Other restrictions and eligibility criteria may apply, so see the website for details.
First-Time Homebuyer Programs by Location
In addition to the statewide programs, there are several homebuyer assistance programs based in different cities and counties around the state.
First-time homebuyers who purchase their residence in Dakota County may be eligible for the Dakota County First Time Homebuyer Program, an initiative offered by the Dakota County Community Development Agency. This program offers fixed, low-interest mortgages, a mortgage credit certificate and up to $8,500 in down payment and closing cost assistance to help new buyers. Qualified veterans may also be eligible even if they do not meet the first-time buyer requirement. Income limits and credit requirements, as well as other eligibility criteria, may apply. See the website for details and to apply.
St. Louis County
Residents of St. Louis County may be eligible for down payment and closing cost assistance when purchasing their first home. First-time homebuyer’s assistance is offered through the county in partnership with the federal funding program HOME Investment Partnerships. Visit the county’s website for eligibility criteria and to apply.
In Minneapolis, residents may be eligible for one of several homeownership programs to help them gain access to their dream home. Minneapolis Homes Homebuyer Assistance programs primarily offer down payment and closing cost assistance and are not limited to first-time homebuyers. Income limits and other restrictions may apply, so check the website for details. Not looking to settle down in the city proper? Check out some of the best Minneapolis suburbs. New to the area? Check out our Minneapolis relocation guide.
Purchase Your New Dream Home
Whether you are planning to retire in the Twin Cities or maybe purchase your first home near one of Minnesota’s 10,000 lakes to enjoy the natural scenery, this state offers beauty at every turn. Now that you have a summary of available financial assistance opportunities, it’s time to make your dream Minnesota home a reality.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Melanie Theriault is a writer, counselor, and lifelong learner. She holds a B.A. in Sociology from Southwestern University, where she discovered her passion for fostering human connection through storytelling.