MN State Programs

State of Minnesota First-Time Home Buyer Programs

Minnesota has some of the best down payment assistance programs in the country which is one of the reasons that home ownership is among the highest in the Unites States. There are numerous statewide programs available including: MHFA, County specific resources, Minneapolis and St. Paul home buyer assistance, first time buyer grants and specialized home buyer seminars.

In addition to the statewide Minnesota programs, there are many resources available that have been specifically created for home buyers in various counties and cities in the Twin Cities metro and out-state areas. These assistance programs are generally made available to a select group of mortgage lenders who are trained and approved to work with home owners who will benefit from these first time home buyer programs.

All borrowers must qualify for an underlying mortgage product (FHA, VA, RD, Conventional). Minnesota Housing loan programs are then layered on top to provide you with additional benefits. If eligible, you can also add a downpayment and closing cost loan when you receive a Minnesota Housing loan.

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Minnesota Housing Start Up Program

The Start Up program through the Minnesota Housing Finance Agency offers first-time home buyers affordable interest rates as well as Down Payment and Closing Cost Assistance Loans. Eligibility Requirements: Must be a first-time home buyer (or have not owned a home in three years), maintain a credit score of 640 or higher, meet income guidelines and meet home cost limits

Down payment & Closing Cost Assistance Loans

When you get a Minnesota Housing mortgage, you can also receive an optional downpayment and closing cost loan up to $15,000. Downpayment and closing cost loans are only available when you get a Minnesota Housing first mortgage loan and additional eligibility requirements may apply, including income limits.

MHFA_1037867.pdf

Monthly Payment Loan

The Monthly Payment Loan can be used with the Start Up or Step Up program.
Loans up to $15,000
Interest rate is equal to your first mortgage rate
Monthly payments over a 10-year loan term

Deferred Payment Loan

The Deferred Payment Loan can be used with the Start Up program and is only for first-time home buyers. There are two options:
Deferred Payment Loan: Loans up to $8,000
Deferred Payment Loan Plus: Loans up to $10,000 for borrowers who meet targeting criteria

There is no interest or monthly payments, and the loan term is equal to your first mortgage term. You must repay the loan when you move, sell, refinance (unless your refinance with our Step Up program) or pay off your first mortgage.

Downpayment and Closing Cost Assistance Options

The Homeownership Assistance Fund (HAF) and HOME Homeowner Entry Loan Program (HOME HELP) offer interest-free, deferred downpayment and closing cost assistance loans to help low to moderate income first-time homebuyers who qualify for a Minnesota Housing loan. HOME HELP cannot be used with HAF.

Minnesota Housing Homeownership Assistance Fund (HAF)

Minnesota Housing provides eligible home buyers who qualify for a Minnesota Housing loan to receive an interest-free, deferred loan to help with down-payment and closing costs through the Homeownership Assistance Fund (HAF). First time home buyers interested in down-payment and closing costs assistance should contact a Minnesota Housing participating lender prior to signing a purchase agreement. HAF Entry Cost Assistance provides up to $3,000 to help borrowers with down payment or closing costs. HAF Monthly Payment Assistance provides up to $75 per month to help pay a portion of the monthly mortgage payment in the early years of the mortgage (available only with the Community Activity Set-Aside Program).

Deferred payment, interest-free loan up to $4,500
Borrower must be eligible for the CASA program OR borrower must be eligible for MMP and meet one of the following criteria: 60% of MMP median income 1 , OR purchasing a home in a MMP Spotlight Area (information located on our website)
Borrower must have $1,000 of their own funds in the transaction and have limited assets in order to qualify
The loan must be fully repaid when the loan matures, the first mortgage is refinanced, or the property is sold or no longer owner-occupied

mhfa_013000.pdf

HOME Homeowner Entry Loan Program (HOME HELP)

Minnesota Housing provides the opportunity for eligible home buyers who qualify for a Minnesota Housing loan to receive an interest-free, HOME HELP Loan to help with down payment and closing costs. The HOME HELP loan is an interest-free deferred loan, which must be fully repaid within the first six years of the loan if the borrower sells or vacates the property. After the sixth year, 50% of the loan is forgiven and the remaining 50% of the HOME HELP loan amount is repaid when the loan matures, the property is sold, or is no longer owner-occupied.

Minnesota Housing Mortgage Credit Certificate

With a tax credit through the Minnesota Housing Mortgage Credit Certificate program, you can get 35% of your mortgage interest back every year as a federal income tax credit - up to $2,000 per year. This can add up to as much as $50,000 in tax savings over the life of the loan.

Eligibility Requirements:

Be a first-time home buyer (or have not owned a home in three years) and meet income limits.
Qualify for a home mortgage
Plan to live in the home
Have a federal income tax liability

Affordable Advantage Program

Minnesota Housing is now offering Affordable Advantage, a conventional fixed-rate loan product that helps serve low- and moderate-income borrowers. Minnesota Housing’s Affordable Advantage has flexible terms and is one of the few 100% Loan To Value (LTV) products available in the market. The product is based on Fannie Mae’s Affordable Advantage, an initiative developed exclusively for Housing Finance Agencies (HFAs).

Affordable Advantage, a conventional fixed-rate loan product that helps serve low- and moderate-income borrowers. Minnesota Housing’s Affordable Advantage has flexible terms and is one of the few 100% Loan To Value (LTV) products available in the market. The product is based on Fannie Mae’s Affordable Advantage™, an initiative developed exclusively for Housing Finance Agencies (HFAs).

Affordable_Housing_Advantage_Program_MN.pdf

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