Minnesota First-Time Home Buyers Assistance Programs

Buying a home in Minnesota is not too far out of reach, especially if you are able to take advantage of the state’s first-time home buying programs. There are both mortgages and down payment assistance available to first-time buyers through the Minnesota Housing Finance Agency (Minnesota Housing). Depending on where you live, there are also city and county specific programs that you may be eligible for.

Minnesota First-Time Buyer Loan Programs

Housing startup in Minnesota

Minnesota Housing’s Start Up First-Time Home Buyers Program offers low fixed rate loans – including conventional, FHA, VA, and USDA loans – through approved mortgage lenders. Loans can be matched with a down payment or closing cost assistance through the agency. To be eligible, borrowers must be a first-time home buyer, defined as someone who has not owned a home in the past three years.

The conventional Start Up loan requires only 3% down payment; However, you will also need to pay for private mortgage insurance (PMI). Government guaranteed loans have their own down payment and mortgage insurance requirements.

Borrower Requirements:

  • 3 percent down payment for conventional loan (down payment assistance available)
  • Must meet minimum credit score
  • Must take Homebuyer Training Course (if all borrowers are first-time buyers)
  • Must meet Minnesota Housing income limits

Ownership Requirements:

  • Must respect purchase price limits (currently $ 340,000 in the Twin 11 Counties metro and $ 249,600 elsewhere)

Minnesota down payment assistance

Monthly Payment Loan for Minnesota Housing

Minnesota Housing’s monthly payment loan program offers first-time homebuyers in the state the option of borrowing up to $ 17,000 for a down payment or closing costs. Borrowers must qualify for the Start Up or other Minnesota home loan to take advantage of this assistance. The term of the monthly payment loan is 10 years, to be repaid in monthly installments at the same interest rate as that of your first mortgage.

Borrowers must meet the same requirements as the Start Up program and generally must contribute at least $ 1,000 of their own funds toward the purchase.

Minnesota Deferred Payment Home Loans

First-time home buyers in Minnesota can also get down payment assistance through a Deferred Payment or Deferred Payment Plus loan. The Deferred Payment option offers up to $ 10,000 for a down payment or closing costs, while the Deferred Payment Plus option can go up to $ 13,000.

In addition to meeting the standard requirements for a first mortgage in Minnesota, Deferred Payment Plus borrowers must meet certain “targeting criteria,” according to the agency’s website.

Other first-time home purchase loan programs

First-time home buyers can take advantage of mortgages that offer a low down payment, lower credit rating, or both, such as FHA loans or the Good neighbor next door program, which offers half-price housing to people in skilled occupations, such as law enforcement. There are tons of first-time homeownership programs out there – check out Bankrate’s first-time home loan guide for more.

For other Minnesota home ownership programs, including by city or county, visit HUD.gov.

To start

First-time home buyers in Minnesota can explore their options with the Minnesota Housing Website. Before talking to a mortgage lender, check to see if you meet the eligibility criteria. A lender can help you determine how much assistance you may be eligible for.

Whether or not you get a mortgage under one of these programs, it is always important to shop with multiple lenders in your area to find the most competitive rates. This can save you tens of thousands of interest over the life of your loan.

Neighboring State Homeownership Programs

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