Down Payment Assistance in Minnesota

What is down payment assistance in Minnesota?

Minnesota's housing market may seem daunting at first glance, but plenty of buyers find that assistance programs make the path to owning a home far more accessible than they expected.

Homebuyers may be able to use down payment assistance (DPA) programs to help them purchase a property. Down payment assistance is made up of national, state, local, and employer-sponsored programs designed to support homebuyers who can afford a monthly mortgage payment but need help coming up with the upfront cash needed for a down payment and closing costs.

Offered by government agencies, nonprofits, and some private organizations, DPA provides financial support to help homebuyers cover the down payment, closing costs, or both. It helps to bridge the gap between what buyers have saved and the funding they need to buy.

It may also provide homebuyers with a financial cushion, so they don’t have to drain all of their savings to afford homeownership.

From Lake Superior's North Shore to the farmland of the southern prairie, Minnesota homebuyers can tap into statewide, local, and community-based programs that help cover the upfront costs of purchasing a home.

Assistance typically comes in one of three forms: a grant (money you don’t repay), a forgivable loan (which is gradually forgiven the longer you stay in the home), or a low-interest loan. The right option depends on the program and your individual situation.

Whether you’re a first-time homebuyer in Minnesota or returning to homeownership after years away, there may be money available to help make up the difference between how much you’ve saved and the amount you need to close on a home.  

How does down payment assistance work?

Every down payment assistance program has its own rules, but most follow a similar path from homebuyers researching their options to funding.

Research. The DPA landscape is larger than most people realize. In fact, there were more than 2,700 DPA programs as of July 2026, according to Down Payment Resource, a company that connects homebuyers to the programs. Assistance may be available at the state, county, city, or employer level, and different programs have different eligibility requirements. If one program doesn’t fit your situation, keep looking. There may be others that will.

Determine your eligibility. Common requirements include income limits, minimum credit scores, and property location restrictions. Understanding your financial profile, where you want to buy, and how long you plan to live in the home will help you identify which programs are worth pursuing.

Apply. Once you find a down payment program that fits your criteria and eligibility, you’ll submit an application and supporting documents. Expect to provide proof of income, personal identification, credit information, and details about the property you intend to purchase.

Get approved and receive funding. If your application is approved and your information verified, you’ll receive the assistance at closing. It’s typically applied directly toward your down payment, closing costs, or both, depending on the program’s terms.

It is important to note that most DPA programs have their own conditions, which may include having to repay the loan in part or full if you move early, sell, or refinance the home. Make sure to always review and understand the terms and conditions of any loan you use.

Additionally, some programs may run out of funding. That’s why it’s important to check availability and stay on top of deadlines.

Who qualifies for down payment assistance?

Many people don’t realize they may be able to qualify for down payment assistance. DPA isn’t just a tool for first-time and first-generation homebuyers or those with lower incomes.

The assistance is available for a wide variety of people in a range of financial situations. Nearly two-thirds, 62%, of current DPA programs serve homebuyers earning more than $100,000 a year and 11% have no income limits, according to Down Payment Resource.

Additionally, more than a third, 38%, of DPA programs don’t have a first-time homebuyer requirement.

There are DPA programs for: First-generation homebuyers, Native American homebuyers, veterans, educators, law enforcement, first responders, municipal employees, those who earn less than a certain threshold, and more. Some programs also exist for buyers who purchase properties in certain communities.

Some organizations also offer homeownership assistance programs for their employees, so make sure you check with your employer as well.

Types of down payment assistance

The majority of DPA programs fall into two categories: Second mortgages and grants.

Second mortgages are by far the most common form of down payment assistance, making up 56% of all programs, according to Down Payment Resource. This is a separate loan running alongside your primary mortgage, with its own monthly payment.

Second mortgages are often set up to be a deferred or forgivable loan to reduce the upfront cost. If you have a deferred loan, it means that it doesn’t have to be repaid until you sell, refinance, or move out. A forgivable loan is gradually forgiven if you live in the home for a set amount of time.

Grants make up 9% of DPA programs and are the most straightforward form of assistance. They’re a gift, with no repayment required under any circumstances. As always, read the terms carefully to make sure you understand any conditions attached.

Finding down payment assistance

Down Payment Resource offers an interactive search feature that allows you to search available DPA programs by location as well as by things like your occupation, military status, or disability status.

New American Funding (NAF) also offers a down payment assistance program called Pathway to Homeownership. Specifically available to first-time homebuyers, eligible borrowers may receive up to $6,000* in financial assistance. This money can be used to help with your down payment, closing costs, or other costs. It can also be combined with other DPA programs.

National down payment assistance programs

While there is not national database of nation-wide DPA programs available, there are several main ones that are notable. They include:

The Chenoa Fund

The Chenoa Fund is administered by CBC Mortgage Agency (a federally chartered tribal housing finance authority). It is one of the most accessible national DPA programs available because it drops two of the most common barriers to qualification. It has no income limits and no first-time homebuyer requirement.

The program covers the required 3.5% down payment on Federal Housing Administration (FHA) loans. The aid is structured either as a forgivable second mortgage or a repayable second mortgage, depending on the option selected.

Borrowers need a minimum 600 credit score to qualify. The program is available in all states except New York.

Since it works through a network of participating lenders nationwide, buyers can access it through their mortgage lender rather than applying directly.

The National Homebuyers Fund

The National Homebuyers Fund (NHF) is a nonprofit organization that provides down payment and closing cost assistance of up to 5% of the loan amount. It’s administered as a grant, meaning no repayment is required.

It has no first-time homebuyer requirement, making it available to repeat buyers who may not qualify for programs with that restriction. It works with FHA, U.S. Department of Veterans Affairs (VA), U.S. Department of Agriculture (USDA), and Conventional loans.

The credit score and debt-to-income requirements are flexible.

The NHF is available in most states and is accessed through a network of participating lenders rather than through a direct application to the fund itself.

Many of the national DPA programs are offered by various lenders and private non-profit organizations like the Homeownership Council of America.

Down payment assistance programs in Minnesota

The Minnesota Housing Finance Agency (MHFA) is the state’s housing finance agency and the central source for statewide DPA programs. MHFA doesn't lend directly to buyers. Homebuyers apply through an MHFA-approved participating lender that will combine the assistance with the mortgage.

MHFA offers different loan programs for first-time and repeat homebuyers, with down payment and closing cost assistance of up to $18,000.

MHFA DPA and Closing Costs Loan

When homebuyers qualify for a loan and are eligible for the Minnesota Housing Start Up or Step Up programs, there is also an option to access down payment and closing costs loan programs. These loans, of up to $18,000, are not grants and must be repaid. The DPA can only be used when combined with a Minnesota Housing first mortgage.

MHFA Monthly Payment Loan:

• This DPA is available with both the Start Up and Step Up first loans
• Homebuyers can receive up to $14,000 in assistance
• The loan comes with a 15-year repayment term, and the interest rate is equal to the first mortgage
• Income limits are the same as the Minnesota Housing first mortgage loan program

MHFA Deferred Payment Loan (DPL)/Deferred Payment Loan Plus (DPL+):

• This DPA is only available with the Start Up first loan
• Borrowers can receive up to $14,000 with the DPL, and up to $18,000 with the DPL+
• The loan has no interest, and no monthly payments
• A balloon payment is due in full at the end of the mortgage term, or if the borrower moves, the property is sold or refinanced, or the first mortgage is paid off

Beyond MHFA’s statewide programs, several Minnesota cities and counties have established their own DPA programs. Many of these can be stacked with MHFA assistance. That means some eligible buyers may be able to combine multiple programs and significantly increase their total help.

This can help them to cover their down payment, closing costs, or simply have a little left over as a financial cushion.

Saint Paul down payment assistance program

Saint Paul is Minnesota's capital and one half of the Twin Cities, known for its historic architecture, tree-lined neighborhoods, and a slower pace than its neighbor across the river. It's a popular choice for buyers who want big-city amenities with a quieter, more walkable feel.

Saint Paul’s down payment assistance program includes:

Saint Paul Down Payment Assistance This down payment assistance program provides up to $40,000 as a 15-year deferred term loan at 0% interest loan. The amount of the assistance is determined by the borrower’s income. It may be used to cover closing costs, down payment, and an interest rate buydown.

Requirements include:

• Earn at or below 80% of area median income (AMI). This is the midpoint of local earnings for an area, calculated by the U.S. Department of Housing and Urban Development.
• Have no more than $25,000 in assets at the time of application
• Provide a pre-approval or pre-qualification letter from the lender
• Completion of a homeownership education course

The Saint Paul DPA may not always be available due to funding.

Minneapolis down payment assistance program

Minneapolis is Minnesota's largest city and the more energetic half of the Twin Cities, known for its lakes, thriving arts and music scene, and a skyline connected by miles of skyways. It draws homebuyers looking for an active, walkable lifestyle paired with strong job opportunities.

Minneapolis down payment assistance includes:

Minneapolis Down Payment Assistance The program offers up to $20,000 in down payment assistance in the form of a 30-year deferred mortgage with no interest. The amount of the assistance is determined by the borrower’s income and the AMI for your household size. The DPA may not always be available due to funding.

Hennepin County down payment assistance program

Hennepin County is Minnesota's largest and most populous county, home to Minneapolis along with a wide mix of suburbs like Bloomington, Edina, and Minnetonka. It offers buyers everything from urban condos to lakeside suburban homes, all within reach of the metro's biggest job centers and cultural attractions.

Hennepin County down payment assistance includes:

Hennepin County Down Payment Assistance The program provides up to $30,000 in down payment and closing cost assistance for income-eligible first-time buyers. The loan is a forgivable 10-year or 15-year term with 0% interest, and deferred payments. Funds must be repaid in full if the property is sold, ownership is transferred, or the home is refinanced. The loan is fully forgivable on the day after the 10-year or 15-year anniversary of the note.

Program requirements include:

• Must be a first-time homebuyer
• Household gross income must be at or below 80% or current HUD Minneapolis/St Paul Metro AMI. 60% AMI or below = $30,000 15-year forgivable loan. 61-80% AMI = $20,000 10-year forgivable loan.
• Gross monthly debts cannot exceed 50% of gross monthly income
• Borrower must provide minimum contribution of $1,000
• Completion of a homeownership education course

These are the main down payment assistance programs available across Minnesota. However, there may be more programs available to you based on your location in the state or your occupation.

For instance, some towns or cities may offer down payment assistance specifically for first responders or teachers. Make sure to do your own research to see if there is a program that may be right for you. And be aware that certain programs may only be available until all of the funding is used.

How to apply for Minnesota down payment assistance

The application process for different DPA programs may change. However, some general application steps include:

1. Check your eligibility. Review income limits, credit requirements, and first-time buyer status at mnhousing.gov. For local programs, contact the relevant city or county housing office.  
2. Find a participating lender. MHFA programs are only available through approved lenders in their network.  
3. Get pre-qualified. Your lender reviews your income, credit, and debts to determine which programs you may qualify for to receive funding.
4. Complete homebuyer education. Enroll in an approved homebuyer education course and keep your completion certificate for closing.
5. Find your home. Work with a licensed agent to locate a qualifying Minnesota property. Your lender will confirm if it meets program requirements.
6. Close on your home. Your lender packages your first mortgage and DPA together. Assistance funds are applied at settlement.

Minnesota down payment assistance FAQs

^{Program details reflect August 2026 information. Down payment assistance programs are subject to change and depend on current funding availability. Always confirm income limits, eligibility requirements, and program details with your lender or the applicable program administrator before applying.}

^{*Credit up to $6,000 maximum. Due to maximum seller concession rules applicable to purchase loan transactions, this credit could be less than $6,000 in some cases where other concessions have been made to the consumer.}