Minnesota’s housing market offers a wide mix of options, from vibrant Twin Cities neighborhoods to smaller towns and scenic rural communities. Whether you’re drawn to urban living or a quieter place, knowing what financial support is available can be just as important as finding the right home.
For many buyers, down payment assistance (DPA) can bring homeownership within reach. Across Minnesota, state agencies, local governments, and nonprofit organizations provide programs that include grants, forgivable loans, and deferred-payment loans to help cover upfront costs.
This guide highlights some of the most widely used and impactful DPA programs in Minnesota. While it’s not an exhaustive list, it focuses on those with steady funding and meaningful benefits. We’ll continue updating as new opportunities become available.
What Is Area Median Income?
Before we dive into the different down payment assistance programs available in Minnesota, it's important to understand one term you'll see often: area median income (AMI).
Many DPA programs restrict eligibility to applicants who earn less than a set level of income. In some cases, this may be presented as a specific dollar amount. Other times, program guidelines will state that homebuyers must earn no more than a certain percentage of the AMI of the location where they're planning to purchase.
You can search for AMI by property address using Fannie Mae’s map tool.
Example: You purchasing a home in a community with an AMI of $125,000. The program you're applying for requires you earn no more than 115% AMI. In this scenario, you could make as much as $143,750 and still potentially qualify for down payment assistance.
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Statewide Down Payment Assistance Programs
Minnesota offers several strong statewide options for buyers, many through Minnesota Housing. Here are some of the most notable:
Start Up Program (Minnesota Housing)
The Start Up Program helps first-time homebuyers with affordable first mortgages and optional down payment loans of up to $18,000. Assistance comes in the form of either a 0% deferred loan or a 10-year monthly-payment loan.
Eligibility: You must be a first-time buyer and have a household income up to $156,100 (varies by county), and buy a home priced at or below $515,200 in the Twin Cities metro or $472,030 in other counties (figures are based on the 2026 model).
Step Up Program (Minnesota Housing)
The Step Up Program supports both repeat and first-time buyers with higher income and purchase price limits than Start Up, plus optional down payment loans of up to $14,000.
Eligibility: In 2026, household income must be no more than $196,600, purchase price must not exceed $515,200 in the metro ($498,257 elsewhere), and borrowers must meet owner-occupancy and credit requirements.
First-Generation Homebuyers Down Payment Assistance Fund
The First-Generation Homebuyers Down Payment Assistance Fund provides up to 10% of the purchase price, capped at $32,000, as a 0% interest loan that is forgiven over five years.
Eligibility: You must be a first-generation homebuyer (neither you nor your parents have owned a home), be a current Minnesota resident, meet income limits, and have less than $50,000 in liquid assets after closing.
This is one of the many DPA programs that have limited funding, and it was closed to new applicants when we visited the site. It may be open again by the time you read this.
Welcome Home Program (NeighborWorks)
The Welcome Home Program supports buyers who use an interest-free first mortgage product by offering up to 30% of the purchase price (maximum $50,000) as a forgivable loan.
Eligibility: At least one borrower must be a first-time buyer, household income must be at or below 130% of area median income, the buyer must contribute at least $1,000, and the property must be an owner-occupied home priced under $766,550 (2026).
Down Payment Assistance Programs by County
Several counties in Minnesota operate their own assistance programs. These often complement statewide options.
Community Keys Plus Impact (Twin Cities Metro)
This Community Keys Plus Impact Program spans Hennepin, Ramsey, Dakota, Anoka, and Washington counties, offering up to $25,000 in assistance through a 20-year deferred, forgivable loan.
Eligibility: Household income must be at or below 80% AMI, you cannot own another property at closing, and you must contribute the lesser of $1,000 or 1% of the purchase price from your own funds. Liquid assets must not exceed $50,000 after closing.
Hennepin County Homeownership Assistance
Hennepin County’s Program offers up to $30,000 in forgivable loans to first-time buyers outside cities with their own programs.
Eligibility: Buyers must be first-time homeowners with household incomes at or below 80% AMI, contribute at least $1,000 of their own funds, purchase a home under $525,225 (2026), and complete both group homebuyer education and one-on-one counseling.
Down Payment Assistance Programs by City
Many Minnesota cities run targeted programs for local residents or buyers. These are often among the most generous.
Minneapolis Homes: Down Payment Assistance
The Minneapolis Homes Program offers up to $20,000 as a 0%-interest deferred 30 year loan.
Eligibility: Buyers must be first-time homebuyers, earn at or below 80% AMI, contribute at least $500 of their own funds, and complete both homebuyer education and financial counseling before signing a purchase agreement. The maximum debt to income ratio (DTI) is 50%.
Saint Paul Citywide Down Payment Assistance
The Saint Paul Program provides up to $40,000 (or $50,000 for first-generation buyers) as a 0% deferred loan, forgivable over 10 or 15 years depending on the funding source.
Eligibility: Household income must be at or below 80% AMI, non-retirement assets must not exceed $25,000, and all borrowers must complete HUD-approved counseling.
This program has limited funding, and it was closed to new applicants when we visited the site. It may be open again by the time you read this.
Brooklyn Park Down Payment Assistance Loan
Brooklyn Park’s Down Payment Assistance Loan offers up to $7,500 for new residents or $10,000 for current residents as a 10 year deferred loan. The loan is 100% forgiven if the borrower(s) did not sell, transfer ownership, or no longer occupied the property as the borrower(s) primary residence within 10 years of the loan closing date.
Eligibility: Buyers must be first-time homebuyers, purchase a home priced at $515,200 or less (2026), contribute at least $1,000 or 1% of the purchase price (whichever is less), and complete a Home Stretch (or HUD-approved) education course.
At the time of writing, this program is closed to new applicants. It may be open again by the time you read this.
Woodbury First-Time Homeownership Program
Woodbury's First-Time Homeownership Program provides up to 3.5% of the purchase price,capped at $451,500 (2026) as a low-interest or 0%-interest loan depending on buyer type.
Eligibility: Buyers must be first-time homebuyers with household income under $158,000 (2026), contribute at least $1,000 of their own funds, and complete an 8-hour homebuyer education course.
Additional Down Payment Assistance Programs in Minnesota
The following programs were not included in the sections above but may also provide valuable assistance.
Statewide Programs
Chenoa Fund (Nationwide program available in Minnesota)
City Programs
Choosing the Right Type of Mortgage
While qualifying for down payment assistance can make homeownership more attainable, so can choosing the right type of loan. Not all mortgages are the same, and in some cases, you may even be eligible for a home loan with zero down payment required at all.
For most first-time homebuyers, the best options commonly include:
- Conventional Loans: Conventional loans are available to first-time homebuyers with just a 3% down payment, and are often a good choice for borrowers with a solid credit score and overall healthy financial profile.
- FHA Loans: Ideal for homebuyers with less-than-stellar credit or who may not otherwise qualify for a conventional mortgage, FHA loans – insured by the Federal Housing Administration – require a 3.5% down payment and come with mortgage insurance costs that are often more affordable for lower-credit borrowers.
- VA Loans: Eligible veterans and active duty service members may be able to qualify for a VA loan insured by the Department of Veterans Affairs. VA loans allow you purchase with a 0% down payment and commonly have some of the lowest interest rates on the market.
- USDA Loans: If you're purchasing a home in a designed rural community, you may qualify for a USDA loan backed by the United States Department of Agriculture. USDA loans have zero down payment requirement and come with fees that are lower than FHA-backed mortgages.
Final Thoughts on Minnesota DPA
Homebuyers in Minnesota can take advantage of a wide selection of down payment assistance options. From statewide programs backed by Minnesota Housing to locally supported initiatives, there are resources designed to ease the burden of upfront costs. As you plan your purchase, explore how these programs fit with your budget, check current mortgage rates, and use our loan calculators to see how different scenarios may work for you. With the right tools and support, turning your goal of homeownership in Minnesota into reality could be more achievable than you think.
Check with the organization directly for the most recent guidelines. While programs were fact-checked at the time of writing, requirements change often, and programs become unavailable when funds are exhausted.
