Minnesota Start Up Program Guide

Guide to the Minnesota Start Up Program

The Minnesota Start Up Program is designed to help first-time homebuyers in Minnesota by offering financial assistance for down payments and closing costs. This program provides affordable options for those entering the housing market, making homeownership more achievable for low- and moderate-income individuals. In 2025, the program continues to provide vital support to first-time buyers, reducing the financial barriers to homeownership. Below is a detailed guide to the program and the steps involved in applying.

1. Program Overview:

• Purpose: The Minnesota Start Up Program provides affordable home loan options and financial assistance to first-time homebuyers. The program is specifically designed to help individuals and families who may struggle to cover the initial costs of purchasing a home, such as down payments and closing costs.
• Assistance Amount: Eligible homebuyers can receive up to $15,000 in down payment and closing cost assistance. This assistance can significantly reduce the upfront financial burden of purchasing a home, making homeownership more accessible to those who need it most.
• Loan Terms: The program offers fixed-rate mortgage loans, typically with terms of 30 years. The competitive interest rates offered through the program help reduce monthly payments, allowing homebuyers to enjoy long-term financial stability.

2. Eligibility Requirements for 2025:

To qualify for the Minnesota Start Up Program, applicants must meet the following criteria:

• First-Time Homebuyer: The program is available to first-time homebuyers, which generally means applicants who have not owned a home in the last three years. There are some exceptions, such as for individuals buying in targeted areas.
• Income Limits: There are income limits based on household size and the area in which the home is being purchased. These limits are updated annually to reflect changes in the cost of living and housing market conditions.
• Credit Score: A minimum credit score of 640 is typically required. Lenders may review other factors, such as debt-to-income ratio, when assessing the application.
• Property Requirements: The home must be located in Minnesota and must be used as the applicant’s primary residence. The property must also meet specific price limits, which vary by location, to ensure affordability for low- to moderate-income buyers.
• Homebuyer Education: Applicants must complete an approved homebuyer education course. This course will provide essential knowledge on budgeting, managing mortgage payments, and understanding the homeownership process.

3. How to Apply:

To apply for the Minnesota Start Up Program, follow these steps:

• Find a Participating Lender: The program works with a network of approved lenders. You will need to contact a participating lender to begin your application. They will assist you in determining eligibility, collecting necessary documents, and submitting your application.
• Required Documentation: Be prepared to provide documentation such as proof of income, tax returns, credit history, and a certificate from the homebuyer education course.
• Submit Your Application: After gathering all necessary documentation, submit your application to the participating lender. The lender will review your eligibility and guide you through the process of securing your loan.

4. Homebuyer Education Course:

• Mandatory Requirement: All applicants must complete a homebuyer education course. The course covers important aspects of homeownership, including budgeting, loan management, and understanding the responsibilities of owning a home.
• Course Options: The course is available both online and in-person. Upon completion, you will receive a certificate, which is required to move forward with the loan application process.

5. Down Payment and Closing Cost Assistance:

• Assistance Amount: The Minnesota Start Up Program offers up to $15,000 in down payment and closing cost assistance. This financial support can help ease the initial costs of buying a home, reducing the amount you need to save for a down payment and making homeownership more accessible.
• Deferred Loan Terms: The assistance is provided as a second mortgage, typically deferred. This means no monthly payments are required, and the loan is repaid when the home is sold, refinanced, or the first mortgage is paid off. In some cases, the loan may be forgiven after a set period.

6. Finalizing the Loan:

• Approval Process: Once your application is approved, your lender will guide you through the next steps, including reviewing and signing the loan documents. They will ensure that all details of your mortgage are explained clearly and that you're prepared for the closing process.
• Closing Costs: While the Minnesota Start Up Program helps with down payments and closing costs, there may still be other fees associated with purchasing your home. Your lender will provide a detailed breakdown of all the costs involved in the home buying process.

Our team of experienced loan officers will work with you at every stage of the process. From application to closing, they’ll help ensure you fully understand the program’s benefits and receive the support you need to successfully purchase your home. With the Minnesota Start Up Program, homeownership is within your reach.