First-Time Homebuyer Programs in Minnesota: What’s Available in 2026
Most first-time homebuyers assume they need 20% down. Without assistance, buying can seem out of reach, but you might be leaving tens of thousands of dollars on the table.
Minnesota has some of the most robust first-time homebuyer support in the country. Between state programs, city-level assistance, and federal loan options, qualifying buyers in the Twin Cities can access anywhere from $10,000 to $40,000 or more in down payment and closing cost help. This assistance often comes with zero interest and no monthly payment required.
This guide covers the major programs available to Minnesota buyers in 2026, what each one offers, and how to find out if you qualify.
First, Do You Actually Count As a “First-Time Homebuyer”?
More people qualify than you might think. Under HUD's definition (which most state and local programs follow), a first-time homebuyer is anyone who has not owned a principal residence in the past three years.
That means you might qualify even if you've owned a home before. Divorced homeowners, people who rented for a few years after selling, and buyers who owned a property more than three years ago are all often eligible. If you're not sure whether you qualify, take the quiz below to find out.
The Minnesota Housing Finance Agency (MHFA): Your Starting Point
The Minnesota Housing Finance Agency is the state body that administers Minnesota's primary homebuyer programs. You don't apply to MHFA directly. Instead, you work with an MHFA-approved lender who can access these programs on your behalf.
Most MHFA programs share a common set of requirements:
Credit score: 640 minimum (some lenders require higher)
Debt-to-income ratio: 45–50% maximum
Down payment: At least $1,000 of your own funds toward the purchase
Homebuyer education: Completion of an approved course (such as Home Stretch or Framework) before closing
Income limits: $111,800–$142,000 depending on location and household size; limits are higher in the Twin Cities metro
Purchase price limits: Vary by county; $340,000 for the 11-county Twin Cities metro area
If you meet these basics, you're probably eligible for at least one MHFA program. Buyers usually qualify for $14,000 in down payment assistance, but you could qualify for up to $18,000. Check their website for additional criteria. Here are the specific programs available through MHFA.
The Start Up Program
The Start Up program is the most widely used MHFA option for first-time buyers. It offers a 30-year fixed-rate mortgage at competitive interest rates paired with optional down payment and closing cost assistance.
Key details:
As little as 3% down required
Compatible with FHA, VA, USDA, and conventional loan types
Low or no mortgage insurance options available, which can seriously reduce your monthly payment
Down payment and closing cost assistance of up to $17,000–$18,000 available as a separate loan (see the next section for how this works)
Purchase price limit: $340,000 in the 11-county metro; $294,600 elsewhere in Minnesota
What $18,000 in assistance actually means: On a $330,000 home with 3% down ($9,900), $18,000 in Start Up assistance could cover your entire down payment and a portion of closing costs. That's a big difference from what most buyers assume is possible.
To access the Start Up program, you'll need to complete a homebuyer education course before closing. Most approved courses are available online and take a few hours to complete.
Down Payment Loan Options: Monthly Vs. Deferred
The Start Up program pairs with one of three down payment assistance options. Choosing the right one depends on your cash flow and how long you plan to stay in the home.
Monthly Payment Loan: Borrow up to $18,000 as a second mortgage, repaid over 10 years with a fixed monthly payment. Best for buyers who want to build equity faster and plan to stay in the home long-term.
Deferred Payment Loan: No monthly payments. This loan is repaid when you sell, refinance, or pay off your first mortgage. Best for buyers who want to keep their monthly costs as low as possible in the near term.
Deferred Payment Loan Plus: A combination of both options, offering higher assistance amounts for buyers who qualify. Ask your MHFA lender which combination makes sense for your situation.
None of these assistance loans is a grant—they do need to be repaid. But the deferred option in particular can feel close to a grant if you plan to stay in your home for many years before selling.
City-Level Programs in the Twin Cities
State programs aren't the only option. Minneapolis, St. Paul, and many other cities across the state run their own homebuyer assistance programs. In some cases, these can be combined with MHFA assistance to reduce your out-of-pocket costs even further.
Most of these programs operate on a first-come, first-served basis. When funds are used up, they’re gone until the next round of funding, so you’ll want to be strategic with when you apply.
Here are some well-known city-level programs in MN:
Minneapolis Down Payment Assistance Program
The City of Minneapolis offers a zero-interest, no-payment 30-year loan for qualifying buyers purchasing in Minneapolis:
$20,000 for buyers at or below 60% of Area Median Income (AMI)
$10,000 for buyers at 61–80% AMI
Income limits are based on household size. Check out their down payment assistance page or contact an approved lender to confirm the current limits for your household.
St Paul Citywide Down Payment Assistance Program
St Paul has a citywide down payment assistance program that opens on July 20th this year for applications. This zero-interest program offers eligible buyers up to $40,000 through a 15-year deferred term loan.
Eligibility requirements:
Earn at or below 80% AMI
Have no more than $25,000 in assets at the time of application
Preapproval from a lender
Complete a HUD-approved homebuyer education course
NeighborWorks Home Partners
NeighborWorks Home Partners is a well-known housing non-profit that serves buyers in various counties throughout the state. They help people with all things homeowner-related. They provide down payment help resources and several options for down payment assistance that vary throughout the year. As of right now (July, 2026), their options include Shoreview, Hennepin County, and Stearns County.
Check regularly to see their current options and available funds, and, when the time comes, work with a qualified lender to apply.
Federal Loan Programs That Pair Well
These aren't specific to Minnesota, but they're worth understanding because they work well alongside MHFA assistance:
FHA loans: Require as little as 3.5% down and accept credit scores as low as 580. FHA loans are compatible with the MHFA Start Up program and are a common pairing for first-time buyers.
VA loans: Available to veterans and active-duty service members, VA loans require no down payment and no mortgage insurance. They can also be paired with MHFA down payment assistance, making them an extremely powerful combination for eligible buyers.
USDA loans: Designed for rural and some suburban areas, USDA loans also require no down payment. Certain parts of greater Minnesota qualify. Check the USDA property eligibility map to see if your area is listed.
Fannie Mae HomeReady / Freddie Mac Home Possible: Fannie Mae offers these conventional loan programs that allow 3% down for lower-income buyers. These are alternatives to FHA if you want to avoid FHA mortgage insurance.
The One Step Most Buyers Skip: Homebuyer Education
Every major MHFA program requires completion of an approved homebuyer education course before closing. This isn't a governmental hurdle—it's a few hours of genuinely useful content that covers budgeting, the mortgage process, and what to expect at closing.
Approved course providers include:
Home Stretch: Available in-person across Minnesota. Many community organizations offer it for free or at a low cost
Framework: A respected online course available at homeownership.org
eHome America: Another online option accepted by most MHFA lenders
Minnesota Housing maintains a full list of approved courses on its website. We recommend you complete the course early. You'll need your certificate of completion when you apply for your mortgage.
How to Get Started
If you've read this far and you think you might qualify for one or more of these programs, here's what to do next:
Check your credit score. Most programs require a minimum score of 640. If you're below that, focus on paying down balances and avoiding new credit inquiries for 3–6 months before applying.
Estimate your income. Compare your household's gross annual income to the program limits above. Remember that limits vary by household size. A four-person household qualifies at a higher threshold than a one-person household.
Complete a homebuyer education course. You'll need it regardless of which program you use, and completing it early gives you a better understanding of the process before you start talking to lenders.
Connect with an MHFA-approved lender. Not every lender participates in these programs. Minnesota Housing's website has a lender locator tool to find participating lenders in your area.
Work with a buyer's agent who knows these programs. A good buyer's agent can help you navigate the timing of assistance, coordinate with your lender, and make sure you're not leaving money on the table.
Take The Quiz: Which Programs Do You Qualify For?
Not sure where you stand? Use the interactive eligibility quiz below to answer five questions and see which programs are most likely to apply to your situation.
Frequently Asked Questions
Do I have to be a true first-time buyer to qualify? No. Under HUD's definition, anyone who has not owned a primary residence in the past three years qualifies as a first-time buyer, even if they've owned a home before.
Can I combine state and city programs? Sometimes. Certain MHFA loans can be combined with city-level assistance like Minneapolis HOM or NeighborWorks. Ask your lender which combinations are allowed under current program rules.
What credit score do I need? Most MHFA programs require a minimum credit score of 640. Some lenders may require higher. If your score is below 640, focus on credit-building before applying. Even a few months of consistent payments and lower utilization can make a big difference.
Is the assistance a grant or a loan? Most assistance is structured as a loan, either with monthly payments or deferred until you sell or refinance. The First-Generation Homebuyer Loan is partially forgivable (half after 10 years, the rest after 20), which makes it function like a grant for buyers who stay in their home long-term.
What's the income limit for the Start Up program in the Twin Cities? Income limits for the 11-county Twin Cities metro are currently $111,800–$142,000, depending on household size. Limits are updated periodically. Confirm current figures with your lender or on the Minnesota Housing website.
What if my income is too high for these programs? The MHFA Step Up program is designed for buyers who exceed Start Up income limits or who have owned a home before. It offers competitive rates and up to $14,000 in down payment assistance with fewer restrictions.
This post is for informational purposes only and does not constitute financial or legal advice. Program details, income limits, and purchase price caps are subject to change. Contact a participating MHFA lender or licensed real estate professional to confirm your eligibility.
Ready to Take the Next Step?
We work with first-time buyers across the Twin Cities every day, and we know these programs inside and out. A free 20-minute consultation is all it takes to figure out what you qualify for and build a plan to get you into your first home.
