Minnesota first time home buyer programs

Don't know where to begin?  We can help!  Please contact us below and we would be happy to assist you with the home buying process and what down payment assistance may be available to you!

Minnesota Housing - Start Up

This first-time homebuyer program is meant to promote affordable interest rates and help homeowners better tackle their down payments and closing costs. Qualified first-time homebuyers must have a credit score of at least 640, they must meet certain income limits and must be able to obtain a mortgage from a lender. Borrowers must also attend a homebuyer education course.

Summary:

  • Must be a first-time homebuyer.
  • Must have a credit score of at least 640.
  • Must meet income limits.

Minnesota Housing - Step Up

This is a loan can be used for home purchase or to help homeowners refinance. The loan is meant to promote affordable interest rates in the state of Minnesota. The monthly payment portion of this Minnesota Housing program is available to help buyers afford closing costs and the down payment of a home purchase. The loan allows borrowers to reduce or eliminate mortgage insurance costs. Qualified borrowers need to have a credit score of at least 640, they must meet program income limits and in some cases, borrowers must attend homebuyer education courses.

Summary:

  • Loan can be used for home purchase or refinancing.
  • Must have a credit score of at least 640.
  • Must meet income limits.

Minnesota Housing - Deferred Payment Loan

This loan is meant for first-time homebuyers to help ease the cost of home ownership. There are two loan options, a deferred payment loan and a plus loan. The deferred payment loan starts at $5,000 and up to $7,500. The maximum for the plus loan is higher, up to $10,000 for those borrowers who fit target criteria. Minimum credit score for qualified borrowers is 640. The borrowers must also attend a homebuyer education course. The loan term is equal to the first mortgage and has 0% interest - the loan is repaid when the property is sold, no longer the homestead of the homeowners or the loan is refinanced.

Summary:

  • Must be first-time homebuyers.
  • Two loan options — can borrow from $5,000 to $10,000.
  • Minimum credit score of 640.

Minnesota Housing - Monthly Payment Loan

This program is designed to help Minnesota homebuyers afford the costs of purchasing a home. Minnesota Housing has a monthly payment loan to help with 5% of the purchase price or $5,000, whichever is greater, to be put towards closing costs and the down payment. Borrowers need to get a Minnesota Housing first mortgage loan as well, which is either a Start Up (first-time homebuyers), Step Up (refinancing), or MCC (mortgage credit certificate). The ten-year loan term comes with monthly payments with an interest rate equal to first mortgage rate. Qualified borrowers need a minimum 640 credit score and must meet program income limits. Borrowers also need to attend a homebuyer education course.

Summary:

  • Loan towards closing costs and home down payment.
  • Ten-year loan term with monthly payments.
  • Minimum 640 credit score.
  • Qualified borrowers must attend homebuyer education course.

Minnesota Housing - Mortgage Credit Certificate

This program was designed to help Minnesota homeowners better afford their mortgages. This Mortgage Credit Certificate allows homeowners to claim 35% of their mortgage interest paid every year as a federal income tax credit — this can provide households with up to $2,000 in tax savings. This certificate can used in conjunction with a Minnesota Housing mortgage, as well as the Monthly Payment Loan which helps with the home down payment and closing costs. This program is geared towards first-time homebuyers (not owned a home in at least three years and not displaced by divorce). The certificate has many qualifications like: borrowers must qualify for a mortgage on a house, meet the income limits of the program, plan to have the property as their primary residence and hold a federal income tax liability.

Summary:

  • Must be first-time homebuyers.
  • Must qualify for a home mortgage.
  • Must meet income limits.
  • Up to $2,000 a year in tax savings.

Buying your first home can be overwhelming. Let us help!  We are committed to finding you any grant monies or assistance programs available to you.  Our buyer agent services are FREE!  Please contact us for more information.  We have assisted hundreds of first time home buyers and look forward to the opportunity to assist you!

Find Out What Mortgages You Might Qualify For

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Minnesota Mortgage Program (MMP) (no longer available)

The Minnesota Mortgage Program is a first time home buyer loan program that helps low to moderate income Minnesotans buy their first home. Qualified applicants are first time home buyers with acceptable credit, have an income at or below prescribed Minnesota Housing income limits and want to buy a qualifying home.  The home must be in the 11 - County metro and 1-4 person households must have income under $84,000. Outside the metro area there are lower income limits depending on the county. These affordable, low interest, fixed rate loans are available to eligible homebuyers statewide.

Community Activity-Set Aside Program (CASA) (no longer available)

Community Activity Set Aside program is a loan program that helps low to moderate income Minnesotans buy their first home. These affordable, low interest, fixed rate loans are available to eligible homebuyers through participating lenders in several communities around Minnesota. Homebuyer education is required for all borrowers receiving a CASA loan.  Using CASA gives you $4500 toward down payment or closing costs. This is considered a “special mortgage” in that it is a lien against your home, BUT it’s interest free and payment free.  When you sell or refinance, the “special mortgage” must be repaid. You are required to have $1000 of your own funds into the transaction.

Qualified applicants are first time home buyers with acceptable credit, have an income at or below prescribed Minnesota Housing income limits and want to buy a qualifying home. Some residents may also qualify as an eligible targeted market for one of the CASA Community Initiatives in either the Twin Cities Metro Area or Greater Minnesota.

CASA Eligible Target Markets:

  • Emerging Markets:  Households of Color or Hispanic Ethnicity or pilots endorsed by the Emerging Markets Homeownership Initiative (EMHI)
  • Single Headed Households:  A family with one adult householder, no spouse/partner in the household, and one or more dependents in the household.
  • Household with a disability

Additional Info:

  • Must have $1000 of own funds into the transaction-gift funds are not considered your funds.
  • Maximum household income for 1-4 people household is $67,200

Homeownership Assistance Fund (HAF) (no longer available)

Through the Homeownership Assistance Fund, Minnesota Housing provides qualified homebuyers with an interest-free, deferred loan to help with down-payment and closing costs. First time homebuyers interested in down-payment and closing costs assistance should determine if they are qualified with a Minnesota Housing approved lender prior to signing a purchase agreement.  Home Buyers may be eligible if they meet one of the following criteria:

  • Borrowers eligible for the CASA program
  • Qualify as an eligible target market
  • Household earning 60% (or less) of area median income

Homeowner Entry Loan Program (HOME HELP) (no longer available)

Through the Homeowner Entry Loan Program, Minnesota Housing also provides eligible homebuyers who qualify for a Minnesota Housing loan with the opportunity to receive an interest-free, deferred** loan to help with down-payment and closing costs. Applicants may be eligible for HOME HELP if they:

  • Are spending over 25% of their gross monthly income towards their house payment
  • Are eligible for the CASA program as described above

  • Have $1000 of their own money to put toward the transaction(no gifts)
  • Have an income at or below HOME HELP program limits(lower than MMP and CASA Limits)
  • Qualify as an eligible target market for one of the CASA Community Initiatives approved to offer HOME HELP

HOME HELP provides an interest free, deferred loan with repayment of the full loan amount in the first 6 years of the loan. After the first six years, the principal of the assistance will be reduced to 30% of the initial loan amount. You can get up to $8,500, which depends on how much your payment is relative to your gross income (housing ratio).

Additionally, Minnesota Housing Mortgage Insurance Partners provide borrowers with lower mortgage insurance rates and involuntary unemployment insurance at no extra cost. 

If you've always wanted a home of your own, these programs can make it possible.  Even if you don’t think you can afford it or don't have a down payment, Minnesota Housing programs truly can lead you on the path to homeownership.

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