Minnesota Housing’s First-Generation Homebuyer Loan Program launched today, May 6. The program has funding to serve approximately 1,500 eligible borrowers on a first-come, first-served basis. The program will be available until funds are exhausted.
The program offers loans up to $35,000 for downpayment and closing cost assistance. Borrowers are required to use a Start Up first mortgage loan to access the First-Generation Homebuyer Loan. Start Up program eligibility requirements apply, including income limits, credit score requirements, and homebuyer education.
The loan is a deferred, interest-free and forgivable loan. Half of the loan is forgiven after 10 years and the rest after 20 years. To be eligible for forgiveness, the borrow must reside in the home through the forgiveness date and meet all the terms of the note.
Not for Investment Properties: Because residency for the whole term of the loan is required to be eligible for forgiveness, the First-Generation Homebuyer Loan is not a vehicle to purchase a home, live in it temporarily, and then rent it out. The First-Generation Homebuyer Loan balance becomes due immediately and in full when the property converts to non-owner-occupancy, or if the borrower sells or refinances the home.
Who is a first-generation homebuyer?
Borrowers may qualify as a first-generation homebuyer if one borrower and their parents or legal guardians:
- Have never owned a home (in any country) OR
- Owned a home but lost it due to foreclosure
Important: Fannie Mae and Freddie Mac’s definition of a first-generation homebuyer and their Form 1109 First-Time Homebuyer Certification does not apply to our program - even for Start Up borrowers using a Freddie Mac or Fannie Mae first mortgage product. At least one borrower using the Minnesota Housing First-Generation Homebuyer Loan must meet Minnesota Housing’s definition of a first-generation homebuyer and sign Minnesota Housing's First-Generation Homebuyer Affidavit.
Is Minnesota Housing's program the same as the First-Generation Homebuyers Community Down Payment Assistance Fund?
Minnesota Housing's First-Generation Homebuyer Loan Program is different from the First-Generation Homebuyers Community Down Payment Assistance Fund.
Borrowers cannot combine Minnesota Housing's First-Generation Homebuyer Loan with the First-Generation Homebuyers Community Down Payment Assistance Fund. The goal of both programs is to help more first-generation homebuyers access homeownership.
The First-Generation Homebuyers Community Down Payment Assistance Fund is not yet available. Visit firstgendpa.org to stay up to date on when the First-Generation Homebuyers Community Down Payment Assistance Fund will be come available.
Where can I find out more?
Questions?
Contact a Minnesota Housing Lender Partner. Use our Lender Directory to find a lender near you.
Minnesota Housing, the state’s housing finance agency, works to provide access to safe, stable and accessible housing Minnesotans can afford in a community of their choice. In 2023, the Agency distributed $1.85 billion in resources and served 69,500 households. Visit our website to learn more.
