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Why First-Time Homebuyers Choose Minnesota
Minnesota is a fantastic place to buy your first home. With a strong economy, high quality of life, and diverse housing options, it’s no surprise that many first-time buyers choose the Land of 10,000 Lakes. Minnesota also offers unique advantages for first-time buyers, including:
- Down payment assistance
- Competitive interest rates
- Tax credits and grants
Key First-Time Homebuyer Loan Programs in Minnesota
Here are some of the most popular programs for Minnesota first-time homebuyers:
1. Minnesota Housing Finance Agency (MHFA) Programs
The Minnesota Housing Finance Agency (MHFA) offers a variety of programs tailored for first-time buyers, including:
- Start Up Program: Provides fixed-rate mortgages and up to $18,000 in down payment and closing cost assistance for first-time buyers who meet income limits.
- Step Up Program: Available to both first-time and repeat buyers, this program offers higher income limits and can be paired with down payment loans.
- Monthly Payment Loan: A secondary loan up to $18,000 to help cover down payments and closing costs, repayable over 10 years.
- Deferred Payment Loan: Provides up to $15,000 in deferred assistance, with no monthly payments, repaid only when you sell, refinance, or pay off your mortgage.
2. FHA Loans
Federal Housing Administration (FHA) loans are a popular choice for first-time buyers in Minnesota. These loans require a lower down payment (as low as 3.5%) and are more lenient on credit scores than conventional loans. Learn more about FHA Loans.
3. USDA Loans
For those looking to buy in rural areas, USDA loans offer 100% financing, meaning no down payment is required. These loans are backed by the U.S. Department of Agriculture and are available to buyers with moderate incomes. Learn more about USDA Loans.
4. Conventional Loans
Conventional loans, including 30-year and 15-year fixed-rate options, offer competitive interest rates and can be a great option if you have a strong credit profile. Learn more about Conventional 30-Year Fixed and Conventional 15-Year Fixed.
5. VA Loans (For Veterans)
If you are a veteran, active-duty service member, or eligible spouse, you may qualify for a VA loan with zero down payment and competitive rates. Learn more about VA Loans.
Tools to Help You on Your Journey
Buying your first home can be complex, but these tools can help you navigate the process:
FAQs
What is the minimum credit score needed for first-time homebuyers in Minnesota?
Most programs require a credit score of 620 or higher, though some may accept lower scores depending on the loan type.
How much down payment do I need to buy a home in Minnesota?
This varies by program, but some loans, like USDA and VA, require no down payment, while others, like FHA, require as little as 3.5%.
Can I use more than one first-time homebuyer program?
Yes, you can often combine state and federal programs to maximize benefits, though each program has its own eligibility requirements.
Next Steps
Ready to take the next step toward homeownership? Explore your options with our FHA Loan Guide or check if you qualify for a VA Loan.
For personalized guidance, connect with a mortgage expert today to find the best path to homeownership.
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
