Many people want to buy a home but saving money for a down payment can be difficult. Part of qualifying for a mortgage is having enough income to qualify for the new home, but you also need the down payment and closing costs. Frequently when I talk to clients, they have enough for a down payment but not closing costs, or maybe they are struggling to even save for the down payment. Others may have enough for both but using assistance may allow them to make a larger down payment.
In Minnesota, there are several down payment assistance programs. The main program is statewide with MN Housing. This allows you to get up to $18,000 in monthly payment assistance, and for some, you can get $16,500 in deferred assistance. There are income limits and purchase price limits. Many people are aware of these programs, but there are others not everyone is aware of.
Ramsey County has a program for those buying outside of the St Paul city limits. You can get up to $20,000 in assistance if you are a first time homebuyer. But if you are a first generation homebuyer, you can get up to $93,150! Your income needs to be at 80% of the median income limit in most cases.
Scott County offers an $8000 grant to first time homebuyers. You need to take a first time homebuyer class (most of these programs require this) and there are different income limits depending on the size of your family. This grant doesn’t have to be paid back.
Bloomington offers down payment assistance of $10,500 for those under 80% of the median income limit, you do not have to be a first time homebuyer. And if you live in the home until at least Jan 2027, the money is forgiven!
Woodbury has a down payment assistance program of $30,000. You need a minimum contribution of 3.5% of the purchase price, but this program can be layered with MN Housing.
There are many other programs in Minnesota, most require at least $1000 of your own money. They all usually require first time homebuyer classes and you need to meet income guidelines. The best way to find some of these programs is to reach out to loan officers that work with the different programs. You can find programs in the area you are looking for a home by going to the city’s HRA website. Some are offered by the county and then you need to check the county website.
These programs can help you get your offer accepted these days – a larger down payment or not having to ask the seller for closing cost assistance may make it easier to get your purchase agreement accepted. Please reach out if you have any questions on these programs or any others.