Overview
Minnesota's housing market offers opportunities for first-time buyers, with a median home price of approximately $330,000. The Minnesota Housing Finance Agency (MHFA) provides the primary state-level assistance through mortgage programs and down payment assistance for qualifying buyers.
The Start Up Program is a minnesota housing finance agency's key offering for first-time buyers, providing below-market rate first mortgage with up to $17,000 in deferred dpa. This program is designed to reduce the upfront cost barrier that prevents many qualified buyers from purchasing a home. Buyers must complete a HUD-approved homebuyer education course and work with an approved lender.
State Programs
Start Up Program
Below-market rate mortgage with DPAStep Up Program
Mortgage with DPA for repeat buyersFederal Programs Available in Minnesota
These nationwide programs can be combined with Minnesota state assistance for maximum benefit.
FHA Loan Program
Low down payment mortgageVA Home Loan
Zero down payment mortgageUSDA Rural Development Loan
Zero down payment mortgageTips for First-Time Buyers in Minnesota
The Step Up Program extends additional support through competitive rate first mortgage with up to $15,000 in dpa. Minnesota has a graduated income tax from 5.35% to 9.85%. Property taxes average about 1.11%. MHFA offers generous DPA up to $17,000 through the Start Up program.
Federal programs complement state offerings in Minnesota. FHA loans require just 3.5% down with flexible credit requirements. VA loans provide zero-down-payment financing for veterans and active-duty military, particularly relevant near rural communities throughout the state. USDA loans offer zero-down-payment options in eligible rural areas, which cover significant portions of Minnesota.
Prospective buyers should compare all available options, as combining state and federal programs can dramatically reduce out-of-pocket costs. Working with a HUD-approved housing counselor can help navigate the application process and identify the best program combination for your situation.
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Program details, eligibility requirements, and benefit amounts are subject to change. Verify all information directly with the administering agency before applying. Last verified: March 30, 2026.