First-Time Home Buyer Programs in Minnesota

Minnesota Housing Programs:

Start Up Program:

Eligibility: Targets first-time homebuyers (no homeownership in the past three years) statewide.
Offerings: Provides a 30-year fixed-rate mortgage (FHA, VA, USDA, or conventional) with competitive rates; can be paired with down payment assistance.
Requirements:

• Income must not exceed $121,300 (1-2 person household) or $139,495 (3+ persons) statewide as of 2025.
• Minimum credit score of 640 (varies by loan type).
• Debt-to-income ratio capped at 45% (50% with compensating factors).
• Homebuyer education course required if using down payment assistance.
• Purchase price limit of $390,000 (11-county Twin Cities metro) or $320,000 (other areas).

Monthly Payment Loan (MPL):

Benefits: Offers up to $17,000 as a 0% interest, deferred loan (repayable upon sale, refinance, or after 30 years) for down payment and closing costs; available with Start Up or Step Up mortgages.
Eligibility: Income capped at $103,500 (or 80% AMI in some areas); must use a Minnesota Housing first mortgage.

Deferred Payment Loan (DPL):

Description: Provides up to $15,000 as a 0% interest, deferred loan (repayable upon sale, refinance, or after 30 years) for lower-income first-time buyers; two tiers available based on income.
Requirements: Must pair with a Start Up mortgage; income capped at $74,000 (DPL) or $94,000 (DPL Plus for additional needs like disability or large families).

Local Programs:

Minneapolis

City Living Homebuyer Assistance: Offers up to $25,000 as a 0% interest, deferred loan (forgiven after 15 years) for down payment and closing costs; income must be at or below 80% AMI (e.g., $82,950 for a family of four).

St. Paul

Homebuyer Down Payment Assistance: Provides up to $40,000 as a deferred loan (0% interest, due upon sale) for first-time buyers; income capped at 80% AMI; targets revitalization areas.

Duluth

Duluth First-Time Homebuyer Program: Offers up to $10,000 as a forgivable loan (forgiven after 5 years) for down payment and closing costs; income must be below 80% AMI.

Additional Information:

• Mortgage Credit Certificate (MCC): Provides a federal tax credit of up to 35% of annual mortgage interest (max $2,000 yearly) for first-time buyers; fee applies; combinable with Minnesota Housing loans.
• FHA Loans: Minimum 3.5% down payment, suitable for credit scores as low as 580 (10% if below 580).
• USDA Loans: Zero-down payment for rural Minnesota areas; income limits apply.
• VA Loans: Zero-down payment for eligible veterans or active military.