Minnesota First Time Homebuyer Loan Programs


The Minnesota first time homebuyer has options when it comes to loans to buy the home that they want and deserve. These loan programs occur on the federal, state, county, city, and neighborhood levels. These loan programs enable those looking to buy their first home the ability to affordably buy the home that they desire.

Federal Loan Programs

There are many loan programs and grants that are offered by the federal government. These programs are designed to make obtaining loans easier, as well as offering opportunities to obtain money to cover down payments and closing costs.

There are such loan programs as the U.S. Department of Housing and Urban Development. An individual can obtain this loan if their credit score meets a certain requirement, usually around 620, and other credit and income requirements are met. The home must be one outside of city limits due to the fact that the loan is meant for the development of areas outside of cities.

Here are some of the available loans:

  • FHA – The Federal Housing Administration offers government backing to loans, making them easy to qualify for. A person can have less than perfect credit, the loan costs less, and the down payment is also low at 3.5%.
  • VA loans – There are currently more than 27 million veterans and those within the armed services that qualify for VA loans. An individual does not have to be a first time homebuyer and little to no down payment is needed.
  • Federal tax credit – The recent federal tax credit provided first time homebuyers $8,000 that does not have to be paid back. This credit applies to homes purchased until April 30, 2010.

Minnesota First Time Homebuyer Loan Programs

Minnesota has a number of loan programs that can be taken advantage of, such as:

  • Minnesota Mortgage Program (MMP) – This program is meant to help low to moderate income residents to purchase their first home. Credit must be acceptable, income cannot exceed $67,200, and the household should be a 1 to 4 person household.
  • Community Activity-Set Aside Program (CASA) – This loan program is also meant for low to moderate income Minnesotans to buy their first home. Those who qualify are given $5,000 toward their down payment or closing costs. You are required to put down $1,000 of your own funds.
  • Homeownership Assistance Fund (HAF) – Minnesota first time homebuyers are given an interest-free deferred loan to help with their down payment and closing costs. Residents must live in the 11 County Twin Cities Metro Area.
  • Homeowner Entry Loan Program (HOME HELP) – This is also a program that offers an interest-free deferred loan that helps with the down payment and closing costs. Residents must live in the 11 County Twin Cities Metro Area and meet a number of income and other requirements.

County And City Programs

There are also more localized programs such as county and city programs. You can consult with your bank or your Minnesota realtor regarding these programs in your particular area.

In almost every county within the Twin Cities Metro Area, there are programs to help first time homebuyers obtain their first home. The same is true for the city and neighborhood levels. There are funding programs available and they are available on a first come first serve basis. This is because funds may run out, so it is important to apply as soon as possible.

Minnesota First Time Home Buyer

It is important that a Minneapolis first time home buyer or anyone in Minnesota looking to buy a home for the first time evaluates all options. Don’t think that you do not qualify for loan or grant opportunities. Grants, for instance, are always changing, beginning, and ending.

To get started in the home buying process, call Edina Realty at 763-607-1415 or fill out the form on this page to start looking at homes and learning of your options.