First Time Home Buyer in MinnesotaIf you are looking to buy your 1st home, you've come to
the right place. Fill out the form on the right to get started.

Today’s Rates for First Time Homebuyers in Minnesota

Mortgage rates are at 2.71% for the 30 year fixed loan program and at 2.56% for the 15 year fixed. As for variable rates, the 5/1 ARM rate currently stands at 4.56%. Check out FHA and VA rates as well if you are doing low or no down payments.

Minnesota First Time Home Buyer Checklist

1. Decide on your loan program options. If you're moving to an eligible area, you may qualify for a zero down payment loan through USDA. Veterans may be eligible for VA loans, which do not require cash down. The content in the paragraphs below should give you an idea of where you may fall. 
2. Get familiar with your credit score. Your credit should fall somewhere above 600, but few lenders accept scores in the high 500s. If your credit score needs a boost, work on improving it before you try to take out a mortgage. Once annually, you're able to request a free credit report from the three major credit bureaus, Equifax, Experian or TransUnion. 
3. Shop interest rates from different lenders in your part of Minnesota. Choose one who not only provides a great offer, but carries a high rating from the Better Business Bureau.
4. Get pre-approved. Once you've picked a lender, provide income documentation with your last two pay stubs and tax returns from the past two years. 
5. Determine a budget. You could be pre-approved for a loan amount that is bigger than you had anticipated, but do not base affordability on the sum provided. Remember - pre-approvals are not guaranteed, and only you know what you can truly afford. 
6. Begin home shopping. Be sure to avoid making extravagant purchases, taking out new installment loans, or anything else that could weaken your financial standing. Lenders will check your accounts again before closing your loan.  

Low Down Payment Loans Through FHA

If you’re a first time home buyer without a lot to put down, a Minnesota FHA loan may accommodate you. FHA loans are backed by the government and designed to help home buyers with limited upfront funds receive financing.

• Down payment: 3.5%
• Minimum acceptable credit score: 580 (varies)
• Mortgage insurance: Upfront (1.75% loan amount) and monthly
• Property guidelines apply and are verified via home inspection

You can find additional information about FHA loans on the Minnesota page of the FHA website.

No Down Payment Loans Through USDA

The United States Department of Agriculture backs home loans for zero down to Minnesota home buyers looking to move to or live in rural areas. Find out if your buying city is eligible by searching the USDA's property map. Note that popular areas like Minneapolis, Rochester, and St. Cloud are not eligible. 

• Down payment: None required; financing up to 102% available depending on home appraisal
• Minimum acceptable credit score: 620
• Mortgage insurance: Upfront (2% loan amount) and monthly
• Income maximums apply 

Minnesota Grants and Assistance Programs

The Minnesota Housing Finance Agency has first time home buyer solutions including grants just for state residents:

Monthly and deferred payment loans are available through the Start Up program, which requires a 640 credit score or above. Income caps apply. Find more information and assess your eligibility by visiting the Start Up program page. 

First time home buyers can also take advantage of the Minnesota Mortgage Credit Certificate program, which enables participants to receive tax credits by claiming 35% of the annual mortgage interest paid as federal income tax. Income limits apply. Visit the MCC tax credit program page for more information. 

Major Cities in Minnesota

Looking for programs specific to your part of Minnesota? Lender411 has researched mortgage assistance programs for the top city in Minnesota for first time homebuyers:

• Minneapolis first time homebuyer

Click the links above to learn about down payment assistance programs, grants, and mortgage tax credits for the Minneapolis area. 

Lenders in: Minnesota.