Start Up. Step Up. Downpayment and closing cost loans. The First-Generation Homebuyer Loan. Minnesota Housing programs can make buying a home in Minnesota genuinely more affordable — but only a participating lender can originate them. I'm one of them, and I'd love to walk you through how they work.
Minnesota Housing — formally the Minnesota Housing Finance Agency (MHFA) — is the state agency created to make homeownership more attainable for Minnesotans. It funds affordable, fixed-rate first mortgages and pairs them with downpayment and closing cost loans that help cover the biggest hurdle most buyers face: cash to close.
Here's the part most people don't realize: Minnesota Housing doesn't lend money directly. It works exclusively through a network of participating lenders who originate the loans, verify eligibility, and guide you through the process. Fairway is a participating lender — which means the way to use these programs is to start a conversation with a loan officer like me.
Every Minnesota Housing journey begins with one of two first mortgage programs. Which one fits depends on whether you're a first-time buyer and where your income lands.
Built for first-time homebuyers — which Minnesota Housing defines as anyone who hasn't had an ownership interest in a principal residence in the last three years. If you've never owned, or it's been a while, this is likely your program.
For repeat buyers — or first-time buyers whose income or purchase price is above the Start Up limits. Step Up also has something rare for a state housing program: a refinance option for current homeowners.
Not sure which program fits? Your application tells us — we'll match you to the right one.
Apply Online with AshlandThese are loans, not grants — but the structure matters. Some you pay monthly, some you don't pay until you sell, and one can be forgiven entirely.
Available with Start Up and Step Up
Borrow toward your downpayment and closing costs, then repay it monthly over 10 years alongside your first mortgage. The interest rate matches your first mortgage rate.
Available with Start Up
An interest-free loan with no monthly payment. Nothing is due until you sell, refinance, move out, or pay off the first mortgage — then it's repaid in a lump sum. DPL Plus offers a higher amount for households meeting additional targeting criteria.
Paired with a Start Up first mortgage · While funds last
Up to $35,000, interest-free, no monthly payment — and forgivable: half after 10 years in the home, the rest after 20. For buyers whose parents or legal guardians never owned a home (or lost one to foreclosure). Funding is limited and first-come, first-served.
Downpayment and closing cost loans are second mortgage loans secured by your home and must be repaid according to their terms. Maximum loan amounts, availability, and terms are set by Minnesota Housing and change periodically — the figures above reflect published program information and should be confirmed for your situation. Forgiveness of the First-Generation Homebuyer Loan requires occupying the home and meeting all terms of the agreement through the forgiveness dates; the balance becomes due if you sell, refinance, or the home stops being your primary residence.
It's a normal mortgage process with a few extra checkpoints. Here's the path, start to finish.
Minnesota Housing loans only exist through participating lenders — you can't apply to the agency directly. This first conversation is where we figure out which program (if any) fits you.
We review your household income against county limits, the price range you're shopping in, your credit profile (minimum scores generally start at 640), and whether you meet the first-time buyer definition.
If all borrowers are first-time buyers, at least one completes an approved course — online options exist, and doing it early makes everything after easier. Your certificate goes in the loan file.
You shop like any other buyer, with a pre-approval in hand and your downpayment assistance already structured. Sellers see a solid, financeable offer.
Your first mortgage and your downpayment/closing cost loan close together at one closing table. You get the keys; the assistance is already baked into your numbers.
Step one takes about 10 minutes online — and it doesn't obligate you to anything.
Start Step One Now The limits change — usually every year. Rather than publish numbers that will be stale by spring, I'll check the current income and purchase price limits for your exact county and household size when we talk. It takes five minutes. Start your application or call 612-505-7663.
Quite possibly, yes. Minnesota Housing's definition is anyone who hasn't had an ownership interest in a principal residence in the last three years. Owned a home in your twenties, sold it, and have been renting since? You may qualify for Start Up.
No — these are loans, and honesty about that matters. The Monthly Payment Loan is repaid over 10 years; the Deferred Payment Loans are repaid when you sell, refinance, or pay off your mortgage. The one exception is the First-Generation Homebuyer Loan, which is forgivable over time if you stay in the home and meet the terms.
No. Minnesota Housing's mission is affordability, and its fixed rates are competitive — the agency publishes them daily. Your rate depends on the program, product, and your profile, which is exactly what an application sorts out.
Yes — that's how they're designed. Minnesota Housing programs layer on top of FHA, VA, USDA Rural Development, and conventional HomeReady®/Home Possible® products. We pick the base product that fits you, then add the Minnesota Housing benefits.
An approved course (Framework® online is a popular option) covering budgeting, the buying process, and life as a homeowner. If all borrowers are first-time buyers, at least one must complete it before closing. My advice: do it early — it genuinely makes the rest of the process less stressful.
Yes — Step Up serves repeat buyers and even offers a refinance option, with a downpayment and closing cost loan available on purchases. If your income is over the Start Up limits, Step Up's higher limits may still work.
Ask me — it's a five-minute check against the current published limits for your county and household size. Limits are updated by Minnesota Housing and posted at mnhousing.gov, but interpreting which limit applies to which program is where a participating loan officer earns their keep.
Minnesota Housing is neither an originator nor a creditor — by design, it funds the programs and participating lenders originate the loans. That's the whole model. Any participating lender can help you; I happen to think it should be one who works with these programs constantly.
I'm a Branch Sales Manager and loan officer at Fairway Home Mortgage's Eden Prairie, Minnesota branch — one of Fairway's top-producing branches in the country — and a 2025 HousingWire Rising Star. My team and I help hundreds of Minnesota families into homes every year, and first-time buyer programs like Minnesota Housing's are some of my favorite work: they turn "maybe someday" into "here are your keys."
The mortgage process can feel intimidating. My job is to make it feel like a plan. If a Minnesota Housing program fits you, we'll use it. If something else serves you better, I'll tell you that too.
The fastest way to find out what Minnesota Housing can do for you is to apply. It's online, it takes about 10 minutes, and it costs nothing — I'll review it, check the current limits for your county and household size, and come back to you with a real plan.
Prefer to talk first? Call or text 612-505-7663
Or email ashland.alitz@fairwaymc.com
Secure online application through Fairway Home Mortgage. Start it now, finish it whenever — your progress saves as you go.
Start My ApplicationApplying does not obligate you to a loan and is not a commitment to lend. Pre-approval is based on a preliminary review of credit information provided to Fairway; final approval is subject to a full underwriting review.
