First-Generation Homebuyer Loan Program Launches

To promote access to homeownership, Minnesota Housing is launching a First-Generation Homebuyer Loan program, which opens today, May 6.

This is a first-of-its-kind opportunity at Minnesota Housing. The state of Minnesota invested a historic $1.3 billion in housing last year, with $50 million of it going to Minnesota Housing. This funding was designed to give a boost to renters who have historically been shut out of the market.

“We’re excited to open the program and help more people start their homeownership journey,” said Jennifer Leimaile Ho, Minnesota Housing Commissioner.

Program Details

The First-Generation Homebuyer Loan is a 20-year deferred, interest-free and forgivable loan for downpayment and closing costs up to $35,000. Half of the loan is eligible to be forgiven after 10 years and the rest after 20. To be eligible for forgiveness, a borrower must live in the home through the forgiveness date and meet all the terms of the agreement.

The First-Generation Homebuyer Loan balance becomes due immediately and in full when the property converts to non-owner-occupancy, or if they sell or refinance the home. Eligibility requirements also include income limits, credit score minimums and completion of a homebuyer education course where they can learn about the entire homebuying process — from financial planning and purchasing a home to life as a new homeowner.

Eligible borrowers are required to use a Start Up First Mortgage loan to access the First-Generation Homebuyer loan.

A person 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

If a borrower does not know if their parent or legal guardian owned a home or lost it due to foreclosure, they may still be eligible for the program. 

For a household of three or more in the Twin Cities Metro Area, program income limits are now up to $142,800.

Funds are available for a limited time. The program has funding to serve approximately 1,500 eligible borrows on a first-come, first-served basis. The program will be available until funds run out.

Learn More

Head to the First-Generation Homebuyer Loan program webpage to learn more. To get connected with homebuyer education classes, homeownership counselors and participating lenders, start at our Get Ready page.

Another state-funded program serving the same demographic is also opening soon: Midwest Minnesota Community Development Corporation (MMCDC) has a First-Generation Homebuyers Community Down Payment Assistance Fund. The programs are different and cannot be used together. A homeownership advisor can help individuals determine which program is best for them.

In connection with Single Family Division loan programs, Minnesota Housing does not make or arrange loans. It is neither an originator nor creditor and is not affiliated with any Lender. The terms of any mortgage finance transactions conducted in connection with these programs, including important information such as loan fees, the annual percentage rate (APR), repayment conditions, disclosures and any other materials which are required to be provided to the consumer are the responsibility of the Lender.