Minnesota Housing (MHFA) Programs:
Updated July 31, 2026MHFA (Minnesota Housing) offers 30-year fixed first mortgages through approved lenders (Start Up for many first-time buyers; Step Up for repeat buyers or higher incomes) and multiple down payment/closing cost loans. Verify county-specific income and purchase-price limits, interest-rate availability, and targeted-area waivers with an MHFA-approved lender or MHFA directly at mnhousing.gov.
Minnesota First-Time Homebuyer Mortgage Programs:
Who it helps: First-time buyers (no ownership in past 3 years for Start Up; Step Up covers some repeat buyers or higher incomes).
Loan types: FHA, VA, USDA, or conventional first mortgages originated by participating lenders and used with MHFA support; 30-year fixed options commonly available.
Quick facts:
- Start Up income limits vary by county; MHFA lists Start Up limits commonly up to about $156,100 depending on household size and county. Step Up extends to higher limits commonly up to about $196,600 depending on county. See MHFA income charts. MHFA Buy a Home.
- Purchase-price caps apply by county — metro caps are commonly higher. MHFA lists Start Up purchase limits up to about $515,200 in the 11-county Twin Cities metro and roughly $472,030 for other counties; Step Up house price limits are listed up to about $515,200 (metro) and about $498,257 (other counties). Check the MHFA county tables for exact caps where you plan to buy. MHFA Buy a Home.
- Credit & underwriting: MHFA refers lenders to its credit & DTI matrices; minimums depend on the underlying first-mortgage product and lender overlays. FHA baseline policy commonly permits a 580+ score for the 3.5% down option, but many lenders set higher overlays — confirm with your lender and see HUD guidance. See MHFA and HUD resources. MHFA overview · HUD FHA handbook (Handbook 4000.1).
- Debt-to-income: MHFA points lenders to a Credit & DTI Matrix. In practice, many lenders commonly use back-end DTIs near the mid-40s (for example ~45%) with case-by-case flexibility; this is lender-dependent and should be checked with a participating lender.
- Homebuyer education: at least one borrower usually must complete an approved homebuyer course before closing for Start Up; MHFA lists approved counseling partners. MHFA homebuyer education.
Down Payment Assistance (DPA) Options (MHFA):
Minnesota Housing offers several second-mortgage DPA products that must be used with a Start Up or Step Up first mortgage. Official MHFA program caps and terms include:
- Monthly Payment Loan (MPL): available with Start Up/Step Up; loan amounts commonly up to $14,000; 15-year repayment (see MHFA comparison sheet). MHFA DPA comparison sheet (PDF).
- Deferred Payment Loan (DPL): 0% interest deferred second mortgage — commonly up to $14,000; repayment typically due on sale, refinance, payoff, or loss of primary residence. MHFA DPA comparison sheet (PDF).
- Deferred Payment Loan Plus (DPL+): targeted DPA options (income/targeting rules apply) — commonly up to $18,000 for qualifying buyers. See MHFA comparison sheet for full terms and targeting rules. MHFA DPA comparison sheet (PDF).
Targeted & First-Generation Funds
State legislation and MHFA initiatives have created targeted first-generation and community-based DPA funds administered through CDFIs and partners. These funds are often time-limited and awarded through local administering organizations — check current availability and program administrators. See MHFA program pages and Minnesota statute for the first-generation program framework. MHFA program pages · Minnesota Statutes (first-generation fund language).
Local Programs (examples and how to check):
County and city HRAs, community development agencies, and neighborhood CDFIs often layer additional assistance (deferred or forgivable second mortgages). Funding and award caps vary by program and year — confirm with the local administrator.
Minneapolis / Hennepin County
Minneapolis Homebuyer Assistance: The City’s rules show typical awards by AMI (examples: $10,000 at up to 80% AMI and $20,000 for households under 60% AMI). Confirm current AMI thresholds, award sizes, and application cycles on the city page. Minneapolis DPA rules.
St. Paul / Ramsey County
Ramsey County FirstHOME: Ramsey County operates the FirstHOME down payment assistance program (suburban Ramsey County and separate arrangements for properties inside Saint Paul). Policy and program pages show second-mortgage DPA commonly in the mid-teens of thousands depending on source and funding year; buyer contribution, asset limits, and property eligibility apply — confirm with Ramsey County. Ramsey County FirstHOME / Homebuyer Assistance · Saint Paul citywide DPA.
Duluth / St. Louis County
One Roof Community Housing (Duluth) and city HOME-funded programs provide local DPA, PAL (purchase-assistance loan), and targeted impact awards (amounts vary and are limited by available funding; Impact DPA has been offered around ~$20,000 when available). Confirm current funding with One Roof or City of Duluth Community Development. One Roof Community Housing - DPA.
Other standard loan options:
- USDA Rural Development: 0% down financing is available for eligible rural properties through USDA Rural Development guaranteed and direct loan programs — property eligibility maps and area income caps apply. USDA RD SFH Guaranteed program (fact sheet).
- VA loans: Eligible veterans and active-duty service members can often get VA-guaranteed loans with no required down payment; lenders and VA determine eligibility and entitlement. See the VA official page. VA home loan basics.
- FHA loans: HUD/FHA guidance generally allows for a 3.5% down option for borrowers with a Minimum Decision Credit Score (MDCS) of 580 or higher (lower tiers exist with larger down payments); lenders commonly apply overlays, so check with your lender and HUD resources. HUD FHA handbook (Handbook 4000.1).
Final note: MHFA sets program caps and product rules, but participating lenders handle loan terms, rates, and many underwriting details. Always confirm county-specific income and purchase-price limits, DPA fund availability, and lender overlays before relying on a particular program.
Check the MHFA pages and talk to an MHFA-approved lender before assuming availability or exact eligibility: MHFA Buy a Home & Refinance and the MHFA downpayment loan comparison sheet.
Seeking Agents® connects you with Minnesota agents experienced in these programs who compete to offer reduced commissions or added services—free for buyers/sellers.