Minnesota First-Time Home Buyer Programs 2026: Complete Guide

Minnesota Housing Programs Overview

Minnesota Housing is the state housing finance agency, offering first mortgages and down payment assistance through approved lenders statewide.

The core products are Start Up (first-time buyers) and Step Up (repeat buyers and refinances). Both can pair with two DPA structures — the Deferred Payment Loan and the Monthly Payment Loan. The First-Generation Homebuyers program offers up to $35,000 for eligible buyers.

Start Up: Below-Market First Mortgage

Start Up is Minnesota Housing's program for first-time buyers, offering 30-year fixed-rate FHA, VA, USDA, and conventional loans at below-market rates through approved lenders.

First-time buyer means no ownership interest in a primary residence in the past 3 years — waived in targeted areas and for qualified veterans. Step Up offers similar terms for repeat buyers and refinances.

Minimum credit score is 640. Income limits are approximately $120,000-$185,000 depending on county and household size — the Twin Cities metro has the highest limits. See our FHA vs conventional guide for loan-type help.

• 30-year fixed-rate FHA, VA, USDA, or conventional loans
• Below-market interest rates
• Minimum 640 credit score
• First-time buyer (waived in targeted areas and for veterans)
• Step Up available for repeat buyers
• Income limits ~$120,000-$185,000 by county

DPA Options: Deferred vs Monthly Payment

Minnesota Housing offers two down payment assistance loans, both up to $18,000.

The Deferred Payment Loan is a 0% interest second with no monthly payments — the balance is due only when you sell, refinance, or pay off the first mortgage. Best for buyers who want zero added monthly cost.

The Monthly Payment Loan provides the same up to $18,000 but is repaid in monthly installments over 10 years at the same rate as your first mortgage — about $190/month on the full amount at 6.5%. It may allow a slightly lower first-mortgage rate in some cases.

• Both options: up to $18,000 for down payment and closing costs
• Deferred: 0% interest, no monthly payment, due at exit
• Monthly: repaid over 10 years, ~$190/month on $18K
• Deferred = zero monthly cost
• Monthly = may offer slightly better first-mortgage rate
• Both pair with Start Up or Step Up

First-Generation Homebuyers: Up to $35,000

Minnesota's First-Generation Homebuyers Down Payment Assistance program is the most generous in the nation — up to $35,000 for buyers whose parents or legal guardians never owned a home.

The program was created to close the racial and generational homeownership gap. Eligibility is based on your parents' homeownership history, not just your income — though standard Minnesota Housing income limits still apply.

Funding is limited and released in rounds through participating lenders and community organizations. Check Minnesota Housing's website for current availability — this program has been extremely popular and funds move fast.

• Up to $35,000 in down payment assistance
• For buyers whose parents/guardians never owned a home
• Largest first-generation program in the country
• Standard income and credit requirements apply
• Limited funding — released in rounds, moves fast
• Can combine with Start Up first mortgage

Minnesota Housing Income and Purchase Price Limits 2026

Minnesota Housing income limits vary by county and household size. Here are the approximate 2026 limits for major Minnesota counties — verify at MNHousing.gov.

• Twin Cities metro counties share the highest limits
• Income limits based on total household income
• Purchase price limits apply to total price
• Targeted areas have higher limits and no first-time requirement
• Verify current limits at MNHousing.gov

Minnesota Housing Eligibility Requirements

To qualify for Start Up, first-time buyer status means no ownership in a primary residence in the past 3 years — waived in targeted areas and for veterans. Step Up has no first-time requirement.

Credit score: minimum 640 for all Minnesota Housing programs. DTI: maximum 45% for conventional, up to 50% for FHA with automated approval. See our DTI ratio guide for strategies.

Occupancy: primary residence only. Homebuyer education: required for first-time buyers — Minnesota Housing-approved courses (like Home Stretch) are available online and in-person.

• First-time buyer for Start Up (waived: targeted areas, veterans)
• Step Up: no first-time requirement
• Credit score: 640+ for all programs
• DTI: 45% conventional, up to 50% FHA
• Primary residence only
• Complete approved homebuyer education (Home Stretch)
• Must use a Minnesota Housing-approved lender

How to Apply for Minnesota Housing Programs

Minnesota Housing programs are accessed through approved lenders — you cannot apply directly to the agency.

Step 1: Find an approved lender at MNHousing.gov. Step 2: Get pre-approved — the lender verifies credit, income, and program eligibility including First-Generation status. Step 3: Complete homebuyer education. Step 4: Find a home within the purchase price limit. Step 5: Close — DPA funds are delivered at settlement.

• Step 1: Find an approved lender at MNHousing.gov
• Step 2: Get pre-approved and confirm First-Gen eligibility
• Step 3: Complete Home Stretch or approved education
• Step 4: Shop within county purchase price limits
• Step 5: Close — DPA funds delivered at settlement
• Tip: Ask about First-Generation funding availability early — it runs out

Local Minnesota DPA Programs

Several Minnesota cities offer additional assistance.

• St. Paul's program is among the largest local programs in the Midwest
• Local programs may stack with Minnesota Housing — ask your lender
• City programs typically have lower income limits
• Funding cycles open and close — check availability early