Minnesota · State guide
How to buy a house in Minnesota
A moderately priced market with some of the most generous down payment help in the country — including up to $35,000 for first-generation buyers — set against fast-rising home insurance. Here is the playbook for buying in the North Star State.
Last updated June 2026
Why Minnesota is different
Buying a house in Minnesota, the short version
The federal process is the same everywhere — read the complete guide to buying a house for the eight universal steps — but Minnesota has its own programs, taxes, and closing rules worth knowing before you start.
The picture: Minnesota is moderately priced (a statewide median around $362,000; the Twin Cities and their pricier suburbs sit above that, while Greater Minnesota is more affordable). The state agency, Minnesota Housing, offers strong help — below-market loans plus up to $18,000 in down payment assistance, and a $35,000 forgivable loan for first-generation buyers.
Two things to plan for. Minnesota property taxes are about average but softened by the automatic homestead exclusion and income-based refunds. And home insurance is rising fast here — among the steepest increases in the country, driven by hail. Use the 50-state hub to compare other states.
The market
What homes cost in Minnesota
A moderate, steady market with a gap between the Twin Cities suburbs and Greater Minnesota.
The statewide median sale price was about $362,000 in spring 2026 (Redfin), up modestly year over year, with low inventory keeping desirable homes competitive. Prices vary by area:
Median prices by area
Edina and the affluent west-metro suburbs run highest (~$640K–$790K) · Minneapolis ~$365K · Mankato ~$300K · St. Paul ~$290K · Duluth ~$290K · Rochester (Mayo Clinic) ~$330K · St. Cloud ~$250K. Greater Minnesota and rural counties are the most affordable, with some well below $200K.
Down payment & rate help
Minnesota Housing programs
You don’t apply directly — you work through a participating lender. A 640 credit score and a homebuyer course are the main requirements.
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Start Up & Step Up loans
The core: a 30-year fixed mortgage (conventional, FHA, VA, or USDA). Start Up is for first-time buyers; Step Up is for repeat buyers and refinancers, or first-timers who exceed Start Up’s limits. Both can include low or no mortgage insurance.
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Down payment & closing loans
Layer on up to $18,000 of help. The Monthly Payment Loan is repaid over 10 years at your first-mortgage rate; the Deferred Payment Loan is a 0% second with no monthly payment, repaid only when you sell, refinance, or pay off the loan.
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First-Generation Homebuyer Loan
The standout: a forgivable loan up to $35,000 for first-generation buyers (your parents never owned a home, or lost one). Half is forgiven after 10 years and the rest after 20. Combined with standard help, that’s up to $53,000 — but funding is limited and first-come.
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Local & federal help
Cities add their own: Minneapolis up to $20,000 and St. Paul up to $40,000 (forgivable), plus county programs (Dakota, Anoka). And FHA (3.5% down), VA (0% down), and USDA (0% down) in rural areas.
The Minnesota Housing rules in brief
You’ll generally need a 640 credit score, completion of an approved homebuyer education course (Home Stretch or Framework), a minimum 1% of your own funds, and household income and purchase price under program limits (income up to about $152,200 for Start Up, higher for Step Up, varying by county). The standard down payment help is a loan you repay later (the deferred version is interest-free), while the First-Generation loan is forgiven over time. “First-time” means no ownership in three years.
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Property taxes
Property taxes in Minnesota: about average, with relief
Minnesota property taxes are roughly average — an effective rate around 1.0%–1.1%, with a typical bill near $3,500. Counties assess your home’s market value, then apply a class rate (owner-occupied homes get a favorable homestead rate). The key benefit is the Homestead Market Value Exclusion, which automatically reduces your taxable value once you’ve established homestead status — so be sure to apply.
Apply for homestead — and claim your refund
After you buy, apply for homestead classification with your county assessor (by December 31) to capture the Market Value Exclusion and qualify for refunds. Then file Form M1PR each year (by August 15) for the income-based Homestead Credit Refund (worth up to ~$3,480 for incomes under ~$142,000) — many buyers leave this money unclaimed. There’s also a special refund if your tax jumps more than 12% in a year, and a deferral program for seniors 65+.
Closing & costs
Closing on a home in Minnesota
Minnesota is a title-company state — a title company or closing agent handles the closing, and an attorney isn’t required (though they’re common for Torrens-registered property). Title insurance is standard. On costs, the state deed tax of 0.33% is customarily paid by the seller, while the buyer pays the mortgage registry tax of 0.23% on the loan — both are a touch higher (0.34% / 0.24%) in Hennepin and Ramsey counties. On financing, the 2026 conforming limit is $832,750, and the FHA floor is $541,287 in most of Greater Minnesota, rising to $552,000 across the Minneapolis–St. Paul metro.
Minnesota’s disclosures — including well and septic
Minnesota requires sellers to give you a written Seller’s Property Disclosure Statement of all known material facts affecting the home, plus a separate Well Disclosure Statement and a septic (SSTS) disclosure for properties with private systems. For rural and lake homes especially, insist on a septic compliance inspection (many counties require it at sale). Always get your own home inspection, and note the federal lead-paint rule for pre-1978 homes. One quirk: Minnesota property is either Abstract or Torrens, which affects the title work.
Insurance & risks
Insuring a Minnesota home
This is the cost rising fastest for Minnesota owners. Home insurance here is now among the most expensive and fastest-rising in the country — averaging roughly $3,500 a year after one of the steepest single-year jumps in the nation (about 34%). The reason is almost entirely hail: Minnesota sits in the central U.S. hail belt, and severe storms drive the bulk of roof claims. Tornadoes, straight-line winds, and harsh winters (ice dams, frozen pipes) add to it.
Roof age, a wind/hail deductible, and a separate flood policy
Because hail dominates, insurers are tightening roof coverage — shifting older roofs (15+ years) to actual-cash-value (depreciated) payouts and applying a separate wind/hail deductible that’s a percentage of your home’s value (often 1%–2%), not a flat amount. So check the roof’s age and condition before you offer. Flood is never covered by a standard policy — add an NFIP policy if you’re near water, and consider sewer-backup coverage for basements. If a home is hard to insure, Minnesota’s FAIR Plan is the last resort.
Wherever you buy
The steps that work the same in Minnesota
Minnesota sets the local rules, but these parts of buying are the same everywhere.
Quick answers
Buying a house in Minnesota: common questions
How much money do you need to buy a house in Minnesota?
With a conventional loan you need 3% down, FHA 3.5%, and VA or USDA can be 0%. On a typical ~$362,000 home that’s roughly $11,000–$13,000 down plus closing costs. Minnesota Housing can add up to $18,000 (or up to $53,000 for first-generation buyers). See how much you really need →
Does Minnesota have down payment assistance?
Yes. Minnesota Housing offers up to $18,000 (a repayable or 0% deferred second), plus a $35,000 forgivable loan for first-generation buyers. Cities add more — Minneapolis up to $20,000, St. Paul up to $40,000. See assistance programs →
What is the First-Generation Homebuyer Loan?
It’s a forgivable loan of up to $35,000 for buyers whose parents never owned a home (or lost one). Half is forgiven after 10 years and the rest after 20, as long as you live there. Funding is limited and first-come, so apply early.
Are property taxes high in Minnesota?
They’re about average (an effective rate around 1.0%–1.1%, roughly $3,500 a year). Apply for homestead classification to lower your taxable value, and file Form M1PR for the income-based refund.
What credit score do you need in Minnesota?
Minnesota Housing generally requires a 640. For loans broadly, FHA can go to 580 and USDA/VA typically want 620. A higher score mainly earns a lower rate. Check the score by loan type →
Do I need an attorney to buy a house in Minnesota?
No. Minnesota is a title-company state — a title company or closing agent handles the closing. An attorney is common for Torrens-registered property or complex title issues, but isn’t required.
Does Minnesota have a transfer tax?
Yes — a state deed tax of 0.33% (usually paid by the seller) and a mortgage registry tax of 0.23% on the loan (paid by the buyer). Both are slightly higher in Hennepin and Ramsey counties.
Why is home insurance so expensive in Minnesota?
Hail is the main driver — Minnesota sits in the hail belt, and rates rose about 34% in a single recent year, among the steepest in the country. Expect a separate wind/hail deductible and check the roof’s age.
What’s the conforming loan limit in Minnesota?
$832,750 in every county for 2026. The FHA floor is $541,287 in most of Greater Minnesota, rising to $552,000 across the Twin Cities metro. Loans above the limit are jumbo.
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