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First-Time Home Buyer Loans in Minnesota

If you’re a Minnesota first-time home buyer with a 20% down payment, you can most likely get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Not every first-time buyers has saved enough for 20% down. The good news is that you don’t need that much. Borrowers can often get into a new home with as little as 3% or even 0% down using one of the low-down-payment mortgage programs listed below.


  • Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years, once you’ve built at least 20% equity in your home
  • FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re typically on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan- Find out more here
  • VA loan: Only for eligible veterans and service members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible- Check Here
  • USDA loan: For those on low-to-moderate incomes buying in designated rural development areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
  • Minnesota Housing: May include competitive interest rates and can be used with down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on your mortgage loan, you could potentially get into a new house with minimal cash out of pocket.

WISH Program

The 2024 WISH amount has increased! The program now provides first time home buyers with up to $30,806 in down payment in the form of a forgivable grant. Want to know more? CLICK HERE


Minnesota Housing Start Up

The Start Up program offers first-time home buyer loans with 3% down, affordable interest rates, and income limits up to $134,800 (in 2023). Down payment and closing cost assistance is also available.

Minnesota Housing Step Up

If you’re a repeat buyer or a Minnesota first-time home buyer who exceeds household income limits, the Step Up program may be ideal for you. Perks are similar to the Start Up program, and refinancing and purchase price limits apply

Minnesota Housing Conventional Loans

Minnesota Housing’s website also says it “offers several HFA conventional mortgage products that must be layered with one of our Mortgage Loan Programs, offering the reduction or elimination of mortgage insurance (MI) costs with options available up to 97% LTV.”

Simply put:

  • You could get an HFA loan through the state
  • You’d only need a 3% down payment
  • Your mortgage insurance costs would be reduced, meaning you’d have cheaper monthly mortgage payments than with many other loan types

As a Minnesota first-time home buyer, expect to need a credit score of 620 or better to qualify for this program. You’ll also need to complete a home buyer education course to be eligible.

Zero Down Loan Program

Refined Lending is excited to offer a zero down loan program to qualified buyers. Check out the program highlights below and contact us for full program details!

  • 0% Down payment
  • No city or county geographical restrictions
  • $150,000 income limit
  • 600 min credit score
  • Up to 55% debt to income ratio
  • Available in Every state
  • $0 buyer funds required
  • Up to 5% seller paid closing costs
  • Standard 30 year fixed rates apply

Community Keys Plus Grants

If you are buying a home in Hennepin, Ramsey, Washington, Dakota, or Anoka County, you may qualify for up to $20,000 in Community Keys Plus down payment assistance!

Metro Home Down Payment Assistance

If you are buying a home in Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington or Wright county, you may qualify for over $10,000 in Metro Home down payment assistance!


There are multiple home buyer grants and loans in every state. In Minnesota, you should find helpful programs at the city, county, and state levels. You can ask your real estate agent or Refined Lending loan officer to point you in the right direction.

Statewide, Minnesota Housing provides down payment and closing cost loans that can help with your upfront home buying expenses.

It has three main down payment assistance options, all of which can be used for closing costs as well:

  • Monthly Payment Loan: Borrow up to $18,000 as a second mortgage and repay it over 10 years in parallel with your main mortgage. Available with Start Up and Step Up loan programs
  • Deferred Payment Loan: Borrow up to $16,500 at 0% APR. No monthly payments but you have to repay the loan in full when you move, sell, refinance, or finish paying down your main mortgage. Only available with the Step Up program
  • Deferred Payment Loan Plus: Borrow up to $18,000 at 0% APR. No monthly payments but you have to repay the loan in full when you move, sell, refinance, or finish paying down your main mortgage. This has stricter eligibility criteria than the standard Deferred Payment Loan


Each major city also has at least one down payment assistance program. They’re all likely to have similar eligibility requirements, including that you’ve completed a homeowner education course; use an approved lender; and meet local income limits. Check with your Refined Lending loan officer for other loan terms and conditions.

City of Woodbury Homeownership Programs

Woodbury provides down payment assistance to make homeownership more affordable. Low-interest, deferred loans of up to $30,000 are available to buyers who have not owned a home in the past three years. Down Payment Program Guidelines

Minneapolis first-time home buyers

The city of Minneapolis runs the Homeownership Opportunity Minneapolis (HOM) which provides a zero-interest, no payment 30-year loan with $10,000 in assistance for homebuyers between 61- 80% AMI and $20,000 in assistance for homebuyers below 60% AMI.

Hennepin County first-time home buyers

The HOME Investment Partnerships Program (HOME) is a flexible federal grant program that allows Hennepin County to fund affordable housing activities for very low and low-income families or individuals, homeless families, and persons with special needs.

Saint Paul first-time home buyers

The city of St. Paul offers up to $40,000 to those who are eligible, with amounts varying depending on your need. Download the full program guidelines (PDF) for all the details.

Bloomington Homebuyer Mortgage Assistance

If you are a Bloomington homebuyer, you may qualify for a $10,500 down payment assistance loan! Full Program Details

Rochester first-time home buyers

First Homes is a nonprofit subsidiary of the Rochester Area Foundation. It can provide down payment assistance either using the Minnesota Housing Start Up program (above) or through its own First Homes Gap Loan. For the latter, it offers up to $12,000 to qualifying buyers, but that depends on available funding. This appears to take the form of an interest-free deferred loan. And you don’t have to repay that until you move out, sell, refinance, or finish paying down your main mortgage.

Saint Louis County first-time home buyers

Federal funding for affordable housing activities in St. Louis, Cook, Itasca, Koochiching, and Lake Counties. St. Louis County serves as the lead agency and fiscal agent to the NE Minnesota HOME Consortium. The HOME Consortium encompasses Cook, Lake, Koochiching, Itasca, and St. Louis County (outside of Duluth).

City of Shoreview Homeownership Programs

New homebuyers may qualify for up to $30,000 in down payment assistance, at low- or no-interest, depending on the buyer’s income. Full Program Details here

Near North/Willard-Hay Homebuyer Entry Cost Assistance

NeighborWorks Home Partners has partnered with the Northside Residents Redevelopment Council (NRRC) to provide homeownership support to residents of the Near North and Willard-Hay neighborhoods. This partnership includes the Homebuyer “Entry Cost” Assistance Deferred Loan Program, which provides up to $10,000 in down payment assistance!

All programs subject to change at anytime without notice. Not a commitment to lend. Client must qualify for program with Refined Lending and the assistance or grant program selected.  * Sources | |

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