First-Generation Homebuyers Community Down Payment Assistance Program

MNR-Supported Program Provides Assistance for First-Generation Homebuyers in Minnesota

Homeownership is the number one wealth generator in America. A homeowner’s wealth is 40 times greater than a renter’s on average. But too many have been shut out of the dream of homeownership, especially racial minority groups, who face significant homebuying challenges. Minnesota's racial homeownership gap is among the highest in the country. 

Launching this year, a new, forgivable, statewide First-Generation Homebuyers Community Down Payment Assistance Fund will help thousands more Minnesotans access homeownership’s wealth-building power and help close the racial homeownership gap. 

The focus on first-generation homebuyers is very deliberate—as these buyers are the least likely to be able to afford or have access to generational wealth to help fund down payment and closing costs.

Realtors® will play a critical role in helping consumers discover and understand this statewide program. Below, we’ve provided links to important resources. Visit the program's official website via the button here.

Visit firstgendpa.org



Realtor® Training Webinar

This training covers the First-Generation Homebuyers Community Down Payment Assistance Fund’s buyer eligibility criteria, product terms, and application process, empowering Realtors® to effectively support buyers in accessing this important resource. Watch now:

How Minnesota Realtors® Got Involved

The origins of the program date to 2020 when Minnesota Realtors® (MNR) and the Minnesota Homeownership Center (MNHOC) began exploring how down payment assistance could reduce the racial homeownership gap. After receiving an Issues Mobilization grant from the National Association of Realtors® (NAR), MNR commissioned a study from the Rosen Consulting Group (RCG), a real estate economics consulting firm. In its 2021 report, RCG identified three barriers that make it difficult for low and moderate-income households to purchase homes:

  • Limited supply of affordable housing
  • Access to adequate credit
  • Lack of sufficient downpayment capital 

Responding to the report, the MNR and MNHOC partnership expanded to include Twin Cities Habitat for Humanity and would soon attract a diverse group of nonprofits, local units of government, businesses, and business trade associations. Working together, they introduced a legislative initiative at the state Capitol in 2022: the “First-Generation Homebuyers Downpayment Assistance Fund.” 

Throughout the 2022 Legislative Session, MNR lobbyists and other coalition members testified before House and Senate committees and met individually with legislators. Although they raised awareness and gained support for helping first-generation homebuyers with downpayment assistance, the House and Senate were unable to reach an agreement on a final omnibus housing finance bill before the end of Session. 

Early in 2023, the coalition brought forward an updated version of the initiative that offered an innovative, better designed approach for delivering downpayment assistance. Eventually, the Legislature appropriated $150 million for first-generation homebuyer down payment assistance in its omnibus housing finance and policy bill (HF 2335). $50 million of that amount was directed to the Minnesota Housing Agency for a similar but separate program. The effective date of this initiative is July 1, 2023.

“This bill has the potential to put approximately 3,000 first-generation buyers in their own homes over the next three years, resulting in significant progress in shrinking Minnesota’s racial homeownership gap.” said MNR's Senior VP of Governmental Affairs Paul Eger. “The success of this coalition is a model for future initiatives and we hope to build on its success.” 

Comparison to Minnesota Housing’s First-Generation Home Buyer Loan Program

The First-Generation Homebuyers Community Down Payment Assistance Fund is different from Minnesota Housing’s First-Generation Homebuyer Loan Program. The programs cannot be used together. Both are funded by the state, and the goal of both programs is to help more first-generation homebuyers access homeownership. For the latest information, visit Minnesota Housing First-Generation Homebuyer Loan Program.

Please see our comparison resource below to see the differences between these two down payment assistance programs. 

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Program Comparison Flyer