Minnesota Step Up Program Guide

Guide to the Minnesota Step Up Program

The Minnesota Step Up Program offers financial assistance for down payments and closing costs to first-time homebuyers and repeat buyers in Minnesota. The program aims to help buyers achieve homeownership by reducing the upfront costs associated with purchasing a home. This guide provides an overview of the program, eligibility requirements, and the application process for 2025.

1. Program Overview:

• Purpose: The Minnesota Step Up Program is designed to provide financial assistance to first-time homebuyers and repeat buyers. It offers support for down payments and closing costs, helping to reduce the financial barriers to homeownership.
• Assistance Amount: Homebuyers can receive up to $10,000 in down payment and closing cost assistance, making it easier to afford a home and navigate the purchasing process.
• Loan Terms: The program offers low-interest, fixed-rate loans that are combined with the assistance amount. The loan terms are designed to be affordable, with repayment schedules that can be extended over a period of up to 30 years.

2. Eligibility Requirements for 2025:

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

• Income Limits: The program is available to individuals and families with moderate incomes. Income limits are based on household size and the area where the home is located. These limits are updated annually to reflect the current housing market.
• Credit Score: Applicants must have a minimum credit score of 640. Lenders may also consider other factors such as debt-to-income ratio when evaluating the application.
• First-Time Homebuyer or Repeat Buyer: The program is open to both first-time homebuyers and repeat buyers. First-time homebuyers are those who have not owned a home in the last three years. Repeat buyers can also apply if they meet the income and credit requirements.
• Property Requirements: The home being purchased must be located in Minnesota and serve as the applicant’s primary residence. The property must meet specific price limits set by the program to ensure affordability for low- to moderate-income buyers.
• Homebuyer Education: All applicants are required to complete a homebuyer education course. This course helps buyers understand the mortgage process, budgeting, and homeownership responsibilities. A certificate of completion is required for the application.

3. How to Apply:

Applying for the Minnesota Step Up Program involves several key steps:

• Find a Participating Lender: The program works with a network of approved lenders. Applicants must contact a participating lender to begin the application process. The lender will help determine eligibility and gather the necessary documentation.
• Required Documentation: Applicants must provide documentation such as proof of income, tax returns, credit history, and a certificate from the homebuyer education course.
• Submit Your Application: Once all documents are gathered, submit your application to the participating lender. The lender will review your application and inform you of your eligibility. If approved, they will guide you through the loan process.

4. Homebuyer Education Course:

• Mandatory Requirement: All applicants must complete a homebuyer education course before applying for the program.
• Course Options: The course is available online and in-person. The course covers essential topics, including budgeting, mortgage management, and the responsibilities of homeownership. Upon completion, applicants will receive a certificate, which is required to move forward with the loan application.

5. Down Payment and Closing Cost Assistance:

• Assistance Amount: The Minnesota Step Up Program offers up to $10,000 in down payment and closing cost assistance. This assistance helps reduce the upfront costs of purchasing a home, making homeownership more affordable for eligible buyers.
• Loan Terms: The down payment assistance is provided as a second mortgage. The loan is deferred, meaning no monthly payments are required during the term. The loan must be repaid when the home is sold, refinanced, or the first mortgage is paid off in full.

6. Finalizing the Loan:

• Approval Process: Once your application is approved, the lender will help you through the next steps, including signing the loan documents and preparing for closing. They will explain the terms of the loan and help you understand the payment schedule.
• Closing Costs: While the program helps with down payments and closing costs, buyers may still be responsible for other fees. Your lender will provide a full breakdown of all costs involved in the home purchase.

Our dedicated loan officers will guide you every step of the way. From submitting your application to closing on your home, they will ensure that you understand the process and are fully supported in achieving your goal of homeownership. With the Minnesota Step Up Program, homeownership is within reach for more buyers in 2025.