First Generation Down Payment Assistance

What is First Generation Down Payment Assistance?

First Generation Down Payment Assistance is a forgivable loan for homebuyers in Minnesota.

• The First Generation Down Payment Assistance program (administered by NeighborWorks Home Partners as part of Minnesota's $100 million statewide First Generation DPA Fund) provides up to 10% of purchase price (max $32,000) as a 0% interest forgivable loan to first-generation, first-time buyers throughout Minnesota. Forgiven 20% per year over 5 years of continuous owner-occupancy. Funded by Minnesota Housing Finance Agency's First-Generation Homebuyers Community Down Payment Assistance Fund.
• Up to 10% of the home's purchase price, capped at $32,000, as a 0% interest forgivable second-mortgage loan. Forgiven over 5 years (20% per year, straight-line) as long as the borrower lives in the home as primary residence. Designed for first-generation homebuyers (parents/guardians did not own a home during borrower's childhood).
• Funding comes from MHFA First-Generation DPA Fund, State, and CDFI.

How much assistance does it provide?

First Generation Down Payment Assistance offers up to $32,000 in assistance.

• The program can be combined with other assistance, subject to the rules of each.
• Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

First Generation Down Payment Assistance is forgiven after 5 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by Pro-rata recapture of unforgiven balance if borrower exits before completing 5-year forgiveness term (sale, refinance with cash-out, transfer, or loss of owner-occupancy).
• The assistance is recorded in 2 position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

First Generation Down Payment Assistance is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

First Generation Down Payment Assistance limits household income to 100% of the area median income, which varies by county and household size.

• Household income at or below 100% AMI for Minneapolis-St. Paul-Bloomington MSA: 1-person $111,700 to 4-person $124,200 (FY2025 program limit).
• The limit applies to total household income, not only the borrower’s.
• The program lists a maximum household size of 4.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

First Generation Down Payment Assistance caps the purchase price as follows: No fixed program cap; subject to Minnesota Housing acquisition limits when paired.

• Eligible property types include Single-family detached, Townhome, Condominium, and 2-unit owner-occupied.
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

First Generation Down Payment Assistance serves buyers purchasing anywhere in Minnesota.

How do you apply?

Applications for First Generation Down Payment Assistance go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through Minnesota Homeownership Center / Framework / HUD-approved counseling agency..

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Statewide reservation system administered through Minnesota Housing's network; NWHP intake for Twin Cities metro., and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.