First-Time Home Buyer Programs in Minnesota 2026
Minnesota Housing’s Start Up program is the state’s first-time buyer mortgage, for anyone with no ownership interest in a principal residence in the last three years. It pairs with a down payment and closing cost loan of up to $18,000, loans that Minnesota Housing says “are not grants.”
Minnesota Housing (the Minnesota Housing Finance Agency) sets the program rules and “sets the interest rates available statewide” for these loans, but it “does not make or arrange loans. It is neither an originator nor creditor.” You apply through a participating lender, “just like you would for any other loan.” Everything here was read on Minnesota Housing’s site and the sites it links to on September 24, 2026.
Start Up or Step Up: which Minnesota Housing mortgage fits you
The dividing line is the three-year ownership test. If you have never owned a home, or “it’s been more than three years since you’ve been a homeowner,” Start Up is built for you. If you owned more recently, or you are a first-time buyer whose income or price is over the Start Up limits, Minnesota Housing points you to Step Up. Both work with FHA, VA, RD and conventional Fannie Mae and Freddie Mac loans.
| Start Up | Step Up | |
|---|---|---|
| Who | First-time buyers (no ownership interest in a principal residence in 3 years) | Repeat buyers, first-time buyers over the Start Up limits, and refinances |
| Income limit, 11-county metro | $131,500 (1-2 people) / $151,200 (3+) | $196,600 |
| Income limit, Dodge and Olmsted counties | $135,800 / $156,100 | $196,600 |
| Income limit, all other counties | $118,900 / $136,700 | $177,800 |
| House price limit | $515,200 in the 11-county metro; $472,030 elsewhere | $515,200 in the 11-county metro; $498,257 elsewhere |
| Down payment / closing cost loan | Monthly Payment Loan, DPL or DPL+ (up to $18,000) | Monthly Payment Loan only (up to $14,000) |
The 11-county Twin Cities area is Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington and Wright. Minnesota Housing’s income limits page prints no effective date; the figures above are what it showed on September 24, 2026. Both programs also list a minimum credit score and an owner-occupancy requirement, and your lender tells you the score cutoff.
Monthly Payment Loan, DPL and DPL+: three ways to borrow the cash to close
- Monthly Payment Loan. Up to $14,000, repaid over 15 years at the same rate as your first mortgage. It works with Start Up or Step Up and has no income limit of its own.
- Deferred Payment Loan (DPL). Up to $14,000, with Start Up only.
- Deferred Payment Loan Plus (DPL+). Up to $18,000, with Start Up only.
The two deferred loans carry “No interest, no monthly payments,” but they are not forgiven. Each is a balloon that “must be fully repaid in a lump sum at the end of the mortgage term, or if the borrower moves, the property is sold or refinanced (unless refinancing with our Step Up program) or the first mortgage is paid off before the term of the loan.” They also have lower income limits than Start Up itself. For four people, the limit is $118,300 in the metro and in Dodge and Olmsted counties and $107,000 in the rest of the state. For 1-2 people, it is $94,600 in the metro and in Dodge and Olmsted counties and $85,600 in the other counties. A buyer who fits Start Up but not the DPL table can still use the Monthly Payment Loan.
The Minnesota down payment assistance page looks at these loans next to other down payment sources in the state.
A first-generation fund that is separate from Minnesota Housing’s closed loan
Two programs have similar names. Minnesota Housing’s own First-Generation Homebuyer Loan Program is gone: “As of December 19, 2024, these one-time funds have been exhausted and the program is closed.” The other program is the First-Generation Homebuyers Community Down Payment Assistance Fund, run by the Minnesota Homeownership Center with money provided under Minn. Stat. 462A.41 through a contract administered by Minnesota Housing. Its site says “Applications Now Being Accepted.”
- You and your parents or legal guardians must never have owned a home in any country (a home lost to foreclosure is the exception), and you must live in Minnesota. Any co-borrowers have to be first-time buyers under the three-year rule.
- The fund pays up to 10% of the purchase price, capped at $32,000. It is a zero-interest loan forgiven 20% a year over five years while you live in the home.
- Combined income must be $118,900 or less, and you cannot hold more than $50,000 in liquid assets after closing.
- All buyers and spouses must finish an approved workshop within the last 12 months, before making an offer.
- Price caps for a one-unit home are $515,200 in the 11-county metro and $472,030 elsewhere. You can use any lender.
- Applications are handled first come, first served, and approved funds are reserved for 90 days.
Homebuyer education and the end of Minnesota’s MCC
On Start Up, at least one borrower must complete an approved homebuyer education course before closing. On Step Up, the course is required only if every borrower is a first-time buyer. The approved courses are Framework, Freddie Mac CreditSmart Homebuyer U, Home Stretch and Realizing the American Dream, and any of them counts whatever the first mortgage type. Minnesota Housing adds that “Fannie Mae HomeView® is not an approved course.”
Older guides still mention a Minnesota mortgage credit certificate. Minnesota Housing’s buy-a-home page says: “As of December 31, 2017, the Mortgage Credit Certificate (MCC) Program is no longer available.” The FAQ that remains is for existing certificate holders only.
Minnesota first-time buyer questions
I sold my townhouse in 2022. Can I use Start Up?
Yes, if you have had no ownership interest in a principal residence since then. A 2022 sale falls outside a three-year look-back for a purchase in late 2026. If you had bought again in the last three years, Step Up would be the Minnesota Housing option, with the Monthly Payment Loan for closing costs.
Which is better, DPL+ or the Monthly Payment Loan?
DPL+ gives more money (up to $18,000) with no payment, but it is only for Start Up borrowers under the lower DPL income table, and you repay the full amount when you sell, refinance, move out or reach the end of the term. The Monthly Payment Loan is smaller (up to $14,000) and adds a 15-year payment, but it has no separate income limit.
Can I use the $18,000 with a mortgage from any bank?
No. The downpayment and closing cost loans “can only be used with a Minnesota Housing first mortgage,” so you need a participating lender.
Does Minnesota Housing publish its rates?
It sets them statewide but sends you to a participating lender for today’s rate.
Minnesota Housing pages: Start Up and Step Up, income limits, homebuyer education; the fund: firstgendpa.org. On askdoss: closing costs in Minnesota, the Minnesota page, FHA or conventional?, FHA loan requirements, VA loans, pre-approval, and three calculators: affordability, monthly payment, down payment. Bordering states: Wisconsin, Iowa, North Dakota.