Minnesota First-Time Homebuyer Programs 2026: Start Up, Down Payment Loans, Welcome Home & First-Gen Fund

Quick answer: Minnesota first-time buyers may qualify for Minnesota Housing's Start Up first mortgage, paired with a Monthly Payment Loan (up to $14,000), a Deferred Payment Loan (up to $14,000) or DPL+ (up to $18,000). Welcome Home (up to $50,000) and the First-Generation Homebuyers Fund (up to $32,000) are separate programs with their own rules. Everything depends on eligibility and available funds. We offer down payment assistance programs.

Ask about our down payment assistance options: book a free 30-minute call, or call 651-417-1085.

2026 limits, verified Nov 4, 2026. Program rules and funding change, so confirm current terms before you apply.

Minnesota first-time homebuyer programs compared

The table below describes each program for general education. It does not mean our team takes part in any program by name.

Who counts as a first-time homebuyer in Minnesota?

Short answer: For Minnesota Housing's Start Up program, you're a first-time homebuyer if you haven't had an ownership interest in a principal residence in the last 3 years. So if you've never owned a home, or it's been more than 3 years since you did, you may qualify. Other programs define it differently.

Welcome Home also requires at least one borrower to be a first-time homebuyer living in Minnesota. The First-Gen Fund is stricter: you and your parents or legal guardians must never have owned a home in any country, unless a home was lost to foreclosure and no one has owned since.

Minnesota Housing Start Up (first mortgage)

Start Up is Minnesota Housing's first mortgage for first-time homebuyers. You apply through a participating lender, not the state. Minnesota Housing sets its program rates statewide but doesn't make the loans itself. Start Up has minimum credit score and owner-occupancy requirements, and it's the only Minnesota Housing first mortgage that can be paired with the DPL or DPL+.

Income and purchase-price limits (2026)

Short answer: In 2026, Start Up income limits go up to $156,100, depending on the county. The purchase-price limit is $515,200 in the 11-county Twin Cities metro area and $472,030 in all other Minnesota counties. If you exceed these limits, the Step Up program may be an option.

2026 limits, verified Nov 4, 2026, on mnhousing.gov.

Homebuyer education requirement

Short answer: Yes. For Start Up, at least 1 borrower must complete an approved homebuyer education course before closing. The Minnesota Housing down payment loans have the same requirement. Some programs require it earlier: the First-Gen Fund wants it done before you make an offer, and Welcome Home wants it done before you sign a purchase agreement.

Approved courses named by these programs include Home Stretch, Framework and Realizing the American Dream.

Minnesota Housing down payment & closing cost loans

Short answer: Minnesota Housing's Deferred Payment Loan is up to $14,000, and DPL+ is up to $18,000 for Start Up buyers who meet extra targeting criteria. Both are 0% interest with no monthly payment. They are loans, not grants, so you repay them when you sell, refinance, pay off the first mortgage, or move out.

Each loan requires a Minnesota Housing first mortgage, and the money can go toward your down payment, closing costs and mortgage insurance costs.

Monthly Payment Loan (up to $14,000)

Available with Start Up or Step Up. It has a 15-year term, monthly payments, and a rate equal to your first mortgage rate. It's due in full if you sell, move out, or pay off or refinance the first mortgage.

Deferred Payment Loan (up to $14,000) and DPL+ (up to $18,000)

Start Up only, with no interest and no monthly payment. The balance is due at the end of the mortgage term, or earlier if you sell, move out, or refinance (unless with Step Up). DPL+ requires at least one targeting criterion, such as being a first-generation homebuyer, a household of 4 or more, or a household member with a disability. Deferred loans also require a 25% minimum housing ratio. Minnesota Housing programs may have asset limits, so check current program guidelines at mnhousing.gov.

Minimum buyer cash contribution (lesser of 1% or $1,000)

You must put in the lesser of 1% of the purchase price or $1,000 (prepaids count) from your own assets. Gifts, grants and loans don't count.

Step Up (if you're not a first-time buyer, or are refinancing)

Step Up is Minnesota Housing's program for repeat buyers. It also covers first-time buyers whose income or purchase price is too high for Start Up. For 2026, Step Up income limits go up to $196,600, depending on the county. Its price limits are $515,200 in the 11-county metro and $498,257 in all other counties.

Step Up buyers can use the Monthly Payment Loan, up to $14,000. They can't use the DPL or DPL+, which are for Start Up only. If every borrower is a first-time homebuyer, at least one must complete homebuyer education before closing.

Step Up can also be used to refinance, even if you aren't a current Minnesota Housing borrower.

2026 limits, verified Nov 4, 2026, on mnhousing.gov.

Welcome Home down payment assistance (NeighborWorks Home Partners)

Welcome Home is run by NeighborWorks Home Partners, a nonprofit, not Minnesota Housing. It provides up to 30% of the purchase price, capped at $50,000, as a 0% loan forgiven at 10% a year over 10 years while you live in the home. Sell, refinance or move out during that time, and it must be repaid.

Key requirements published by the program:

• One borrower must be a first-time homebuyer currently living in Minnesota.
• Gross household income must be at or below 130% of HUD's Minneapolis/St. Paul area median income.
• You must contribute at least $1,000 of your own money. Gifts, grants and loans don't count.
• You need a pre-approval for interest-free, fee-based first mortgage financing from one of the program's approved financing partners.
• At least 1 borrower must finish homebuyer education within the past 12 months and before signing a purchase agreement.

You need a signed purchase agreement to apply, and should allow at least 35 days to close.

First-Generation Homebuyers Community Down Payment Assistance Fund

The First-Gen Fund helps Minnesota residents who are first-generation homebuyers. It covers up to 10% of the purchase price, capped at $32,000, as a 0% loan forgiven at 20% a year over 5 years while you live in the home.

Published requirements include:

• Combined income of all buyers of $118,900 or less.
• No more than $50,000 in combined liquid assets after closing. Retirement accounts, life insurance and college savings don't count.
• Homebuyer education for all buyers and spouses within the last 12 months, finished before you make an offer.
• A pre-approval for a fixed-rate mortgage. The fund says you can apply with any lender.
• A 1-2 unit home in Minnesota. One-unit homes are capped at $515,200 in the 11-county metro and $472,030 elsewhere.

Applications are first come, first served, and acceptance doesn't guarantee funds. Once you're approved, the funds are reserved for 90 days while you shop.

Can you stack Minnesota down payment programs?

Short answer: Sometimes. Minnesota Housing allows outside down payment assistance to be layered with its loans, but only 1 Minnesota Housing down payment loan can be open at a time. Each outside program has its own first-mortgage rules, so whether 2 programs fit together depends on both sets of guidelines.

Here's how the published rules interact:

• Minnesota Housing + First-Gen Fund: The First-Gen Fund accepts a fixed-rate mortgage from any lender, so layering may be possible, subject to both programs' approval.
• Minnesota Housing + Welcome Home: Welcome Home requires interest-free financing from its own partners, while Minnesota Housing loans require a Minnesota Housing first mortgage. Based on those rules, they don't appear designed to work together. Confirm with both programs.
• Two Minnesota Housing loans: Not allowed. Only one can be open at a time.

Example scenario (illustrative only): A first-generation buyer is purchasing a $280,000 home in the Twin Cities metro with a Start Up first mortgage. The buyer contributes $1,000 of their own money, since that's less than 1% of the price ($2,800). A DPL covers part of the down payment and closing costs. The buyer also applies to the First-Gen Fund, which allows up to 10% of the price ($28,000). Actual amounts depend on the loan type, real closing costs, eligibility, and whether funds are available.

How to apply, step by step

1. Take homebuyer education. Do it before you make an offer if you might use the First-Gen Fund or Welcome Home, since both require that timing.
2. Get pre-approved. Minnesota Housing programs go through participating lenders, and outside programs may require specific financing. Your pre-approval shows which programs fit your income, credit and budget.
3. Apply for outside assistance if it fits. First-Gen applications are first come, first served. Welcome Home requires a signed purchase agreement first.
4. Shop and make an offer. Keep the program price limits in mind.
5. Close. Bring your required cash contribution and sign the assistance documents along with your mortgage.

Ask about our down payment assistance options: book a 30-minute call, or call 651-417-1085.

How Kenny's team can help

We offer down payment assistance programs. Kenny Merdan is a licensed mortgage loan officer (NMLS 1504326) with NEXA Lending, serving Minnesota and Texas buyers. As a broker, our team can compare loan options from multiple wholesale lenders and show you which assistance options may fit, subject to eligibility and program availability. We don't promise any rate or approval.

Realtors, send this to your buyers.

FAQ: Minnesota first-time homebuyer programs

What down payment assistance is available for first-time buyers in Minnesota?

Minnesota Housing offers a Monthly Payment Loan (up to $14,000), a Deferred Payment Loan (up to $14,000) and DPL+ (up to $18,000). Separately, Welcome Home offers up to $50,000 and the First-Gen Fund up to $32,000. Each has its own rules, and funding can run out.

Who counts as a first-time homebuyer in Minnesota?

For Start Up, it's anyone without an ownership interest in a principal residence in the last 3 years. The First-Gen Fund is stricter: you and your parents or guardians must never have owned a home, unless one was lost to foreclosure.

How much is the Minnesota Housing Deferred Payment Loan (DPL / DPL+)?

The DPL is up to $14,000 and DPL+ is up to $18,000, both only with a Start Up first mortgage. They carry 0% interest and no monthly payments, but you repay them when you sell, refinance, move out, or pay off the first mortgage.

Are Minnesota down payment programs grants or loans?

They're loans. Minnesota Housing says its down payment and closing cost loans "are not grants." Welcome Home and the First-Gen Fund are 0% loans that are forgiven over 10 and 5 years, but only if you keep living in the home. Sell, refinance or move out early, and you may have to repay.

Can I combine Minnesota Housing assistance with Welcome Home or the First-Generation fund?

Minnesota Housing allows outside assistance to be layered, but only 1 Minnesota Housing down payment loan at a time. Pairing with the First-Gen Fund may be possible. Welcome Home requires interest-free financing from its own partners, so it doesn't appear to fit with a Minnesota Housing first mortgage.

What are the income and purchase-price limits for Start Up?

For 2026, Start Up income limits go up to $156,100, depending on the county. Purchase prices are capped at $515,200 in the 11-county metro and $472,030 elsewhere in Minnesota (verified Nov 4, 2026).

Do I need homebuyer education in Minnesota?

Yes. Start Up and the Minnesota Housing down payment loans require at least 1 borrower to finish an approved course before closing. The First-Gen Fund requires all buyers and spouses to finish one before making an offer, and Welcome Home requires it before a purchase agreement.

How long does Minnesota down payment assistance take?

There's no single timeline. Welcome Home asks buyers to allow at least 35 days to close after it receives a full application. The First-Gen Fund reserves approved funds for 90 days while you shop. Minnesota Housing's loans close alongside your first mortgage through a participating lender.

Do I have to repay Minnesota Housing assistance if I sell?

Yes. Minnesota Housing's Monthly Payment Loan, DPL and DPL+ must be repaid when you sell or transfer the home, and also if you move out or refinance. Forgivable programs like Welcome Home and the First-Gen Fund require repayment if you sell before forgiveness ends.

Ready to see what you may qualify for?

Every program has rules, and funds can run out, so talk with a licensed loan officer before you make an offer.

Ask about our down payment assistance options: book a 30-minute call, or call 651-417-1085.

Have questions first? Catch Kenny on Mortgage Talk LIVE on TikTok and ask them live.