Down Payment Assistance Programs That Work for Minneapolis Duplex Buyers
A national headline recently came to life when several 20-something family members said they didn’t think they’d ever be able to afford to own a home.
When I learned what they were paying in rent, I told them they could afford a duplex. Yes, buying and owning the right duplex is still more affordable than a single-family home.
Sensing their next objection would be that they didn’t have 20% for a down payment, I said they could buy one for as little as 3.5-5% down. This too seemed impossible.
What they hadn’t expected to hear, however, was that there are grants and loans available to help them with a down payment. Whether you’re trying to buy your first single-family home, a duplex to house-hack, or you’re a repeat buyer who just can’t seem to save fast enough, there is money sitting out there with your name on it — and most people have no idea it exists.
So where do you start?
Minnesota Housing Finance Agency
The Minnesota Housing Finance Agency — MHFA — is the mothership of homebuyer assistance in this state, and everything else layers on top of their foundation.
MHFA’s programs work through approved participating lenders — you don’t apply directly to the agency.
The Minnesota Housing Start Up program gives first-time homebuyers a more affordable option to purchase their first home, with competitive interest rates and down payment assistance. Eligible borrowers are approved for affordable, fixed-interest rate mortgages with as little as 3% down on conventional loans, and the program offers down payment and closing cost loans up to $17,000–$18,000. It also offers low or no mortgage insurance options for lower monthly payments.
To qualify, first-time homebuyers must have a credit score of at least 640, meet certain income limits, and be able to obtain a mortgage from an approved lender. Borrowers must also attend a homebuyer education course.
Purchase price limits are in keeping with FHA limits. That means a buyer can spend up to $706,500 on a duplex in the 11 county metro area.
The Step Up Program — For Repeat Buyers (and Overincome First-Timers)
If you’re not a first-time homebuyer — or you’re a first-time homebuyer who exceeds the income or purchase limits for Start Up — the Step Up program might be a great option. It includes a down payment and closing cost loan option of up to $14,000. If all borrowers are first-time buyers, at least one must complete an approved homebuyer education course before closing.
Step Up income limits vary by location; as of 2025, the base income limit is around $156,800 in most counties, though specific limits may be higher in certain metro areas. The limit applies to all borrowers listed on the application and is based on qualifying income, not household income.
How Do You Want to Pay It Back: Deferred, Monthly, or Plus
Once you’re in the Start Up or Step Up program, you have multiple down payment assistance repayment structures to choose from.
Minneapolis buyers, for example, can choose from three Minnesota Housing DPA products with different repayment structures: a Monthly Payment Loan ($17K with a small monthly payment), a Deferred Payment Loan ($12.5K at 0% deferred), or a DPL+ ($17K deferred for buyers at 80% AMI or below).
These are loans, not grants. Each has eligibility requirements and can only be used with a Minnesota Housing first mortgage. The interest-free deferred balloon loan must be fully repaid in a lump sum at the end of the mortgage term, or if the borrower moves, the property is sold or refinanced, or the first mortgage is paid off before the term of the loan.
State programs are just the beginning. There are also city, county, and nonprofit programs that can be layered on top of MHFA assistance.
Minneapolis: Homeownership Opportunity Minneapolis
The city of Minneapolis runs the Homeownership Opportunity Minneapolis (HOM) program, which provides a zero-interest, no-payment 30-year loan with $10,000 in assistance for homebuyers between 61–80% AMI and $20,000 in assistance for homebuyers below 60% AMI. The assistance must be repaid when you move, sell, refinance, or finish paying down your main mortgage. Eligible first-time buyers must be below income limits, which vary by household size, and complete financial wellness counseling from an approved agency.
Saint Paul: Citywide Downpayment Assistance
Saint Paul offers up to $40,000 to those who are eligible, with amounts varying depending on need. This DPA takes the form of an interest-free loan that falls due only when you move, sell, refinance, or finish paying down your main mortgage.
Ramsey County: FirstHome
Ramsey County has a program called FirstHome that assists first-time and first-generation homebuyers who are buying homes in susburban Ramsey County. Loan principle is forgiven at 5% per year over a 20-year period. Borrowers must complete a homebuyer class and homeownership advising.
NeighborWorks Home Partners — First-Generation DPA
Through the MMCDC First-Generation Down Payment Assistance program, eligible recipients can receive up to ten percent of a home’s purchase price, capped at $32,000. As of January 2025, borrower liquid assets cannot exceed $50,000 after closing (excluding retirement accounts, life insurance, and college savings accounts). The first-generation buyer on the loan must have completed an approved homebuyer education workshop within the last 12 months, before submitting a purchase agreement.
The Family Housing Fund — For Duplex Buyers
The Family Housing Fund offers $5,000 to $40,000 to purchasers of 2-to-4-unit properties. It’s one of the few programs that specifically targets small multi-family buyers, which makes it uniquely relevant for the house-hacking crowd. Availability and terms change with funding cycles, so call them directly.
Federal Programs That Work in Minnesota
People often forget that both USDA and VA both offer zero-down, 100% financing options. Requirements include credit score, income, rural location (USDA) or military service (VA). VA loans can sometimes be paired with MHFA programs for additional closing cost help.
What They Have in Common.
While different, nearly all of these programs share some common rules. At least one borrower must complete one of their approved courses. Next, most are capped by income, but their limits may not be as restrictive as you fear. All of them require you to live there. However, as long as you live in one of the units, a duplex, triplex or fourplace qualify.
You can stack programs. Many buyers use a Minnesota Housing first mortgage + a Deferred Payment Loan + a city or county program layered on top. The right lender will help you maximize what’s available.
If you’d like to buy a duplex, triplex or fourplex to owner occupy, but aren’t sure you have enough for a down payment, give me a call. I’d be happy to connect you with a lender that can help you explore your options.
The money is out there.