First-Generation Homebuyer Loan Program
Minnesota Housing's First-Generation Homebuyer Loan Program is a downpayment and closing cost loan for first-generation homebuyers.
Homebuyer Eligibility
A borrower may qualify as a first-generation homebuyer if one borrower and their parents or prior legal guardians:
- Have never owned their primary residence (in any country)
OR - Owned a home but lost it due to foreclosure
If a borrower aged out of foster care, emancipated, or does not know if their parent or legal guardian owned a home or lost it due to foreclosure, they may still be eligible for the program.
Note: This program is not for borrowers who lost their home due to other circumstances, such as short sale, deed in lieu, disaster, tax forfeiture or fleeing from war.
Important: Fannie Mae’s and Freddie Mac’s definition of a First-Generation homebuyer and their Form 1109 First-Time Homebuyer Certification do not apply to our program — even for Start Up borrowers using a Freddie Mac or Fannie Mae first mortgage product. At least one borrower using the Minnesota Housing First-Generation Homebuyer Loan must meet Minnesota Housing’s definition of a First-Generation Homebuyer and sign Minnesota Housing's First-Generation Homebuyer Affidavit.
Loan Details
The First-Generation Homebuyer Loan is a 20 year deferred, interest-free and forgivable loan. Half of the loan is forgiven after 10 years and the rest after 20. To be eligible for forgiveness, the borrower must reside in the home through the loan term and meet all other terms of the note.
Not for Investment Properties: Because residency for the whole term of the loan is required to be eligible for forgiveness, the First-Generation Homebuyer Loan is not a vehicle to purchase a home, live in it temporarily, and then rent it out. The First-Generation Homebuyer Loan balance becomes due immediately and in full when the property converts to non-owner-occupancy, or if borrowers sell or refinance the home.
The program offers loans up to $35,000. Borrowers are required to be using a Start Up First Mortgage loan to access the First-Generation Homebuyer loan. The program is not available to Step Up borrowers.
Loans can be combined with one of our standard downpayment and closing cost loan options.
Income and purchase price limits, as well as the homebuyer education requirement, are the same as the Start Up Loan Program. The funds can be used for customary costs.
Borrowers will sign a note and mortgage specific to the First-Generation Homebuyer Loan, as well as a First-Generation Homebuyer Loan Affidavit (attesting to their first-generation homebuyer status). For more details, read the Program Parameters and the Start Up Procedural Manual in the Program Materials section.
Program Materials
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Recorded Lender Training
The training covers how to use the First-Generation Homebuyer Loan Program with our other programs, enter it into the commitment system, disclose the loan and more.
Watch the recorded First-Generation Homebuyer Loan Lender Training!
Common Questions
Below are some common questions about the First-Generation Homebuyer Loan Program. For any additional questions regarding the First-Generation Homebuyer Loan Program please contact the Partner Solutions Team at 651.296.8215 or 800.710.8871 between 8:00 a.m. and 5:00 pm. on business days.
In connection with Single Family Division loan programs, Minnesota Housing does not make or arrange loans. It is neither an originator nor creditor and is not affiliated with any Lender. The terms of any mortgage finance transactions conducted in connection with these programs, including important information such as loan fees, the annual percentage rate (APR), repayment conditions, disclosures, and any other materials which are required to be provided to the consumer are the responsibility of the Lender.
