Minnesota Housing is making changes to our downpayment and closing cost loans in order to:  

• Maintain and strengthen our ability to reach mission-targeted borrowers, 
• Build on the success of the Minnesota Housing First-Generation Homebuyer Loan Program,
• Align our programs to available resources that are lower than recent years due to the slower pace of repayment and prepayment of loan capital and the level of our state-appropriated funds, and   
• Avoid stopping and starting our programs, so our programs will continue to be a reliable source of funds. 

We value your continued partnership. Together we will continue to make homeownership possible for more Minnesotans. 

The changes outlined below are effective for loans locked in the Minnesota Housing commitment system on or after March 3, 2025.  

Deferred Payment Loan (DPL) and Deferred Payment Loan Plus (DPL+) Programs: 

• The maximum loan amount for DPL is reduced from $16,500 to $14,000. (No change to the DPL+ max loan amount of $18,000.) 
• DPL/DPL+ borrowers must have a front-end ratio of 28% or higher. 
• To be eligible for DPL+, borrowers must now meet one of four targeting criteria:  
  • First-Generation homebuyer (following the same definition previously used for the Minnesota Housing First-Generation Homebuyer Loan); or 
  • Household of four or more people; or 
  • Household member who is a person with a disability; or 
  • Sole head of household with at least one eligible dependent residing in the household. 

• The total of all DPL/DPL+ borrowers’ liquid assets at the completion of closing are limited to $13,000. 
• DPL/DPL+ borrowers are eligible to spend down excess liquid assets by up to $2,500 to meet the asset limit, provided the following requirements are met:   
  • Funds must be used to pay down a borrower’s own existing debt(s); 
  • Payment transaction(s) must be completed prior to loan closing; and 
  • Documentation of the debt(s) and the payment transaction(s) must be in the loan file.   

• Income Limits for DPL and DPL+ have been reduced to 80% AMI. See table below: 

 DPL/DPL+ Income Limits (effective for loans locked on or after March 3, 2025)

Monthly Payment Loan (MPL) Program: 

• The maximum loan amount for MPL is reduced from $18,000 to $14,000. 
• When using the Monthly Payment Loan with Step Up, new lower income limits will apply. See table below: 

Start Up/Step Up Acquisition Cost/Purchase Price Limits 

• There will be no increase to acquisition cost/purchase price limits for Start Up and Step Up for 2025. 

Start Up/Step Up Income Limits 

• Our annual income limit adjustments will be completed after HUD releases their annual updated numbers. There are no changes to the income limits for Start Up and Step Up at this time.  

Critical Lender Update Training 

Join Minnesota Housing tomorrow or on Wednesday, February 19 for critical lender updates regarding the program changes. We will go over important updates to program eligibility requirements and forms. We will also do a website tour to share supportive resources. 

• Wednesday, February 12 at 9 a.m. Critical Lender Update: 2025 Program Changes 
• Wednesday, February 19 at 9 a.m. Critical Lender Update: 2025 Program Changes
  

 Where and when will the changes be posted on Minnesota Housing’s website? 

• See the Homeownership Program Changes webpage.
  
  • Find the link by going to the Lender Toolkit, and the link will be in the Downpayment and Closing Cost Loans section as well as on the Income Limits page. 
  • The webpage includes links to the new Start Up and Step Up Procedural Manuals (effective March 3, 2025). 
• Our website and program materials will be fully updated to reflect the changes on March 3, 2025.