Your Guide to Minnesota First-Time Homebuyer Programs (2026)

Thinking about buying your first home in the Twin Cities northern suburbs? You might qualify for up to $18,000 in down payment assistance through Minnesota Housing programs that many buyers don't even know exist.

As a real estate team serving White Bear Lake, Shoreview, Blaine, and surrounding communities, we help first-time buyers access these programs regularly. Here's what you need to know.

Minnesota's Two Main First-Time Buyer Programs

Start Up Loan Program

The Start Up program offers competitive interest rates with minimal down payment requirements.

Key Benefits:

• Down payment as low as 3%
• Often lower rates than conventional loans
• No private mortgage insurance (PMI) on some loan types
• Available for homes up to $408,125 in the Twin Cities metro

Who Qualifies:

• Haven't owned a home in the past 3 years
• Income limits: $111,360 (1-2 people) or $128,064 (3+ people) in metro areas
• Must complete a homebuyer education course (6-8 hours online)
• Credit score typically 640 or above

Step Up Program: Up to $18,000 in Assistance

Step Up provides serious help with your down payment and closing costs.

Key Benefits:

• Up to $18,000 in down payment/closing cost assistance
• 0% interest deferred loan
• No monthly payments on the assistance
• Only repaid when you sell, refinance, or pay off your mortgage

Real Example: Buying a $325,000 home in Shoreview with traditional financing requires about $24,250 out of pocket (5% down plus closing costs). With Start Up + Step Up programs, you might need as little as $0-$2,000 of your own money.

How to Get Started

Step 1: Take the Required Education Course Complete an approved homebuyer education course online for $75-$100. Budget 6-8 hours to finish it.

Step 2: Get Pre-Approved Work with a lender who specializes in Minnesota Housing programs. We can connect you with experienced local lenders who know these programs well.

Step 3: Start House Hunting With pre-approval in hand, you'll know exactly what you can afford in neighborhoods throughout the northern suburbs.

Current Market Conditions (January 2026)

Good news for first-time buyers: the Twin Cities market is more balanced than in recent years. Homes in White Bear Lake and Shoreview are averaging 18-36 days on market, giving you more time to make informed decisions.

Median home prices in the northern suburbs range from approximately $340,000 to $395,000, which puts quality homes within reach using these assistance programs.

Common Questions

"Will sellers accept offers with down payment assistance?" Yes. These are legitimate financing programs that close successfully every day. Many sellers work with assisted buyers...it will just depend on the competition involved.

"What if I owned a home years ago?" If you haven't owned a home in the past 3 years, you qualify as a first-time buyer in Minnesota.

"Do I have to repay the Step Up assistance?" Only when you sell, refinance, or pay off your home. There are no monthly payments, and it's at 0% interest. If you stay long-term, it essentially helped you buy years earlier than you could have otherwise.

"Can I use these for a townhome?" Yes! These programs work for single-family homes, townhomes, and approved condominiums.

Why These Programs Matter

Many renters in the Twin Cities assume they need to save 20% down before buying, which could take years. These Minnesota programs can make homeownership possible much sooner.

Whether you're looking at the lakes and parks of White Bear Lake, family-friendly neighborhoods in Blaine, convenient Shoreview locations, or charming Stillwater properties, there's likely a path to homeownership that fits your situation.

Next Steps

Ready to explore whether you qualify? The first step is a simple conversation about your situation. We can help you understand your options, connect you with the right lenders, and show you what neighborhoods match your budget.

Contact the Sandy Erickson Real Estate Team to start your journey to homeownership in Minnesota's northern suburbs.