Minnesota Housing, the state's housing finance agency, offers home loan programs, including down payment and closing cost loans, through participating lenders. A set of changes to those programs took effect on July 1, 2026, for loans locked on or after that date. The agency said the aims are to reach more people, improve affordability and financial stability for borrowers, and make the programs easier to use.
What changed
- Monthly Payment Loan: the repayment term grew from 10 years to 15 years. When it is paired with a Step Up loan, it no longer has its own income limit; the Step Up limit applies.
- Deferred Payment Loan and Deferred Payment Loan Plus: the minimum housing ratio dropped from 28% to 25%, and the $2,500 cap on spending down savings was removed. Buyers can still use savings to pay off their own existing debts at or before closing to meet the program's asset limit, as long as it is documented in the loan file.
- Step Up loans: 15-, 20- and 25-year terms are now available for conventional, FHA and VA loans, for purchases and refinances.
- Purchase price limits: no increase for 2026. The program page lists Start Up price limits of up to $515,200 in the 11-county Twin Cities metro and $472,030 elsewhere in Minnesota.
- Income limits: new limits apply. For Start Up in the 11-county metro, they are $131,500 for households of one or two people and $151,200 for three or more.
The basics
- Start Up is for first-time buyers, which Minnesota Housing defines as someone who has not had an ownership interest in a principal residence in the last three years. Step Up is for repeat buyers, and for first-time buyers who are over the Start Up limits.
- With Start Up, buyers may qualify for a Deferred Payment Loan (up to $14,000) or a Deferred Payment Loan Plus (up to $18,000). The Monthly Payment Loan (up to $14,000) works with Start Up or Step Up. These are loans, not grants.
- If every borrower is a first-time buyer, at least one must complete an approved homebuyer education course before closing.
- You apply through a participating lender, which sets the loan terms and fees.
What to do with this
Eligibility depends on your county, household size, income and the price of the home, and a participating lender is the one who confirms it. If you are early in the process, a homebuyer education class and a conversation with a participating lender are useful places to begin.
If you'd like to see where these programs fit into the buying process, you can start your buyer's journey and we'll go through it together.