Minnesota offers incredible opportunities for homeownership, from the vibrant Twin Cities of Minneapolis and St. Paul to charming small towns and scenic lakeside communities. With a strong economy, top-ranked schools and healthcare systems, and a high quality of life, the state continues to attract first-time buyers looking to put down roots; however, rising home prices and upfront expenses can make it challenging to get started.
However, like in many other states, for first-time homebuyers in Minnesota, the biggest hurdle is simply covering the down payment and closing costs. The Minnesota Housing Deferred Payment Loan (DPL) program helps bridge that gap by providing zero-interest loans that don’t require repayment until after the first mortgage is paid off.
What This Program Offers:
- Zero-interest loans of up to $14,000 to cover down payment and closing costs (recently reduced from $16,500 to better target assistance).
- Deferred repayment, meaning borrowers do not make payments until their first mortgage is paid off.
- Assistance specifically designed for first-time homebuyers who have not owned a home in the past three years.
- Support for low- and moderate-income households, with income limits set at 80% of the Area Median Income (AMI) (e.g., $79,000 or less for 1–2 person households in the Twin Cities Metro area).
- Access through participating lenders who can guide buyers through the application process.
Who This Program Is Designed For:
The DPL program is ideal for Minnesota buyers who:
- Are purchasing a home for the first time and have not owned a home in the last three years.
- Need help covering down payment and closing costs.
- Qualify under income limits designed to assist low- and moderate-income households.
- Want flexible, zero-interest financing that defers repayment until the first mortgage is paid off.
- Are working with lenders participating in Minnesota Housing programs.
Eligibility Snapshot:
- Must be a first-time homebuyer (no home ownership in the past three years).
- Income must fall at or below 80% of AMI, based on household size and location.
- Loan amount up to $14,000, used for down payment and closing costs.
- Must work with an authorized Minnesota Housing lender.
- Recent program updates include adjusted income limits and loan amounts as of March 3, 2025.
Who Should Take Action:
Real estate agents, mortgage professionals, and first-time homebuyers should consider the DPL program when planning homeownership in Minnesota. Early consultation with a participating lender ensures eligibility and helps buyers take full advantage of zero-interest, deferred-payment options. Buyers who qualify can significantly reduce upfront costs and enter the market with confidence.
What to Do Next:
- Locate a participating Minnesota Housing lender to start the application process.
- Confirm first-time homebuyer status and review household income against program limits.
- Complete the DPL application with guidance from the lender.
- Understand repayment terms and how deferred, zero-interest loans integrate with the first mortgage.
- Check Minnesota Housing’s website for updates, including income limit adjustments and program changes effective March 2025.
If the DPL program does not fit a buyer’s income, location, or loan type, there are other statewide and local assistance programs in Minnesota that may help cover down payment and closing costs. HomebuyerWallet.com can help buyers explore additional options and match the best programs to their needs. Take the first step toward Minnesota homeownership today!
