First time homebuyer programs

Minnesota has a few first time homebuyer programs, but the most popular is through Minnesota Housing.  MHFA offers a program with a lower interest rate and you can also qualify for down payment assistance.

One of the programs is MMP (Minnesota Mortgage Program).  This program allows you to get a mortgage at an affordable interest rate, currently 3% for FHA mortgages.  That rate may change daily, but it is current right now.   You also have an option to get down payment assistance.  Depending on your income, you can get up to $3,000 in down payment assistance.

Another program offered by MHFA is CASA (Community Activities Set-Aside Program).  With CASA you are allowed up to $4,500 in down payment assistance if you meet the income guidelines. 

Within the CASA program is another program called Home Help.  This program allows for up to $10,000 in down payment assistance. 

In order to qualify for the programs, you must be a first time homebuyer (you can not have owned a home for the past 3 years), you must have acceptable credit,  and you must meet the income guidelines for the program you are using.  The home purchase price limit is $298,125 in the 11 county metro area, outside the metro area, the purchase price limit is $237,031. 

For MMP, the income limit is$83,900 for a 1-4 person household.  However to qualify for down payment assistance, the limit is lower depending on where you are buying.  For CASA, the income limit is $67,10o for a 1-4 person household.  You must also meet the other CASA program guidelines.

With the CASA program, you must have $1,000 of your own funds in the transaction and have limited assets to qualify.  The down payment assistance is a deferred payment, interest free loan.  The loan must be paid when the loan matures, the first mortgage is refinanced or the home is sold or no longer owner occupied.

With Home Help, 70% of the down payment assistance is forgiven after the sixth year and the 30% is repaid when the loan matures, the first mortgage is refinanced, or the home is sold or no longer owner occupied. 

MN Housing also offers rehab loans and and there is also a Fix up Fund.

Not all lenders offer these programs  If this is something you are interested in, there is more information on MN Housing's website,  This can be a great help for those that need a little more help to purchase a new home!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage and Equity Consultants - Email

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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