Down Payment Path

Down Payment Assistance Programs in Minnesota

Minnesota offers several programs to assist homebuyers with down payments and closing costs. These initiatives aim to reduce the financial barriers to homeownership and are available to a wide range of buyers, including both first-time and repeat purchasers across the North Star State.

Start Up Program

The Start Up Program, offered by Minnesota Housing, provides financial support to help first-time buyers manage upfront costs, but some options may also apply to repeat buyers.

  • Offers up to $17,000 in down payment and closing cost assistance as a deferred loan.
  • Repayment is deferred until the home is sold, refinanced, or the mortgage is paid off.
  • Pairs with low-interest fixed-rate mortgage options.
  • Income and purchase price limits apply.

Step Up Program

The Step Up Program supports repeat buyers or those looking to refinance, providing access to affordable mortgage products with down payment assistance.

  • Provides up to $17,000 for down payments and closing costs.
  • Assistance is available as a deferred loan with no monthly payments required.
  • Open to buyers who meet income and credit qualifications.

USDA Rural Development Loans

For buyers in rural Minnesota, the USDA Rural Development Loan offers financing with no down payment requirement.

  • Available to low- and moderate-income buyers in USDA-eligible rural areas.
  • Flexible credit requirements and competitive interest rates.
  • Can be combined with state or local assistance programs to cover closing costs.

Mortgage Credit Certificate (MCC)

The Mortgage Credit Certificate (MCC) program provides significant tax savings for homebuyers by reducing the cost of homeownership.

  • Allows buyers to claim a federal tax credit for a portion of their annual mortgage interest.
  • Pairs with Minnesota Housing mortgage products and assistance programs.
  • Income and purchase price limits apply, but the program is accessible to many buyers.

Local Assistance Programs

Many cities and counties in Minnesota offer additional resources to help homebuyers with upfront costs.

  • Programs in areas like Minneapolis, St. Paul, and Rochester often include grants or low-interest loans for down payments and closing costs.
  • Some local initiatives provide targeted benefits for public service workers or buyers purchasing in revitalization neighborhoods.
  • Eligibility and assistance levels vary by location.

Minnesota’s down payment assistance programs are designed to make homeownership more attainable by addressing the financial challenges of buying a home. Whether you’re purchasing your first home or upgrading, these programs offer valuable support to help you achieve your dream of owning a home in the North Star State.