First-Time Home Buyer in Minnesota: The 2026 Playbook

TL;DR

• Minnesota treats you as a first-time buyer if you have not owned a principal residence in the last three years, and Minnesota Housing's Start Up loan pairs a low fixed-rate mortgage with up to $18,000 in down payment help.
• Before you tour homes with an agent you will sign a written buyer representation agreement. Minnesota has used them since 1993, and the 2024 national settlement made them standard everywhere.
• Plan for Minnesota-specific costs the online calculators skip: the 0.23 percent mortgage registry tax, the $54 well disclosure fee, a radon test, and the December 31 homestead filing that lowers next year's property tax.

The short answer

I'm Janet Matchinsky, and I have walked first-time buyers through this process across West Central Minnesota since 2014. The version that works looks like this: confirm you qualify for Minnesota Housing's Start Up program, get a real pre-approval from a participating lender, sign a buyer agreement with an agent you trust, shop with a written list of must-haves, and write an offer that keeps your inspection and financing protections intact. From accepted offer to keys, a financed purchase typically takes 30 to 45 days.

The rest of this guide is the detail behind each of those steps, with links to the state agencies and statutes so you can check everything yourself. When you are ready to see homes, start with buying with Home Match Realty or browse homes for sale in Alexandria.

Step 1: Find out if you count as a first-time buyer

Minnesota Housing defines a first-time homebuyer as someone who "has not had an ownership interest in a principal residence in the last three years" (Minnesota Housing). That means people who owned a home years ago, sold it, and have rented since can qualify again. It also means a spouse who never held title may still be blocked if the other spouse currently owns; ask your lender to run both names.

Start Up is the program built for this group. As of the July 1, 2026 program sheet, it comes with these rules (Minnesota Housing comparison sheet):

• Household income up to $156,100, and the limit varies by county, so confirm the figure for Douglas, Pope, Todd, Stearns or Kandiyohi County with a participating lender.
• Purchase price up to $472,030 in Greater Minnesota.
• At least one borrower completes an approved homebuyer education course before closing.
• Minimum borrower contribution is the lesser of $1,000 or 1 percent of the purchase price.

Step 2: Line up the down payment

You do not need 20 percent down. Start Up first mortgages accept the low down payments that FHA, VA, USDA and conventional programs allow, and Minnesota Housing stacks a second loan on top for the down payment and closing costs. The three options, from the same July 2026 sheet:

The deferred loans cap your post-closing liquid assets at $13,000, so if you have a larger savings cushion the Monthly Payment Loan may be the only fit. Retirement accounts and 529 plans do not count toward that cap.

If you or your spouse served in the military, or the home sits outside city limits, read VA and USDA loans in rural Minnesota before you pick a program. A zero-down VA or USDA loan can beat Start Up for the right buyer.

Step 3: Get pre-approved, not pre-qualified

A pre-qualification is an estimate based on what you tell a lender. A pre-approval means the lender pulled credit, looked at pay stubs and bank statements, and is willing to put a number in writing. When a seller is weighing more than one offer, or deciding how much to trust yours, they ask which one you have. Bring the pre-approval.

Two things to ask the lender up front:

• Are you a Minnesota Housing participating lender? Start Up and its down payment loans are only available through that list (participating lenders).
• What is my total monthly payment with taxes, insurance and mortgage insurance included? A $250,000 house in Long Prairie and a $250,000 house on a Douglas County lake carry very different tax and insurance bills.

Step 4: Sign a buyer representation agreement

Since August 17, 2024, agents who use a Multiple Listing Service must have a written agreement with you before touring a home (National Association of REALTORS®). Minnesota buyers have signed these since 1993 (Minnesota REALTORS®), so nothing about the process here changed except the paperwork got more specific. The agreement must state the amount or rate of compensation, must say fees are negotiable and not set by law, and cannot let the agent collect more than you agreed to from any source.

Read it, and ask questions. In my office the agreement spells out what I do for you, how long it lasts, and what happens if the seller offers to cover part of my fee.

Minnesota also requires an agency relationships disclosure early in our first conversation (Minn. Stat. 82.67). That form is not a contract; it explains the difference between a buyer's agent, a seller's agent and a dual agent. Dual agency, where one brokerage represents both sides, is legal in Minnesota only with the written consent of everyone in the transaction. I will always tell you when that situation is possible so you can decide.

Step 5: Shop with a list, not a feeling

Write down five must-haves and five nice-to-haves before the first showing. Three property types worth comparing in this area are:

• In-town homes in Alexandria, Willmar, Long Prairie or Osakis, on city water and sewer.
• Rural homes on a few acres with a private well and septic.
• Lake homes and cabins (browse by lake), which come with shoreland rules I cover in Buying a lake home in Minnesota.

If a home has a well or septic, the offer changes. Keep reading.

Step 6: What the seller must tell you

Minnesota law requires the seller to give you a written disclosure, before you sign a purchase agreement, of "all material facts pertaining to adverse physical conditions in the property of which the seller is aware" (Minn. Stat. 513.55). The seller is not liable for problems they did not know about (513.57), and if you later find something they hid, you have two years from closing to bring a claim.

Sellers can ask you to waive that disclosure, but only in writing (513.60). Estates and some investor sellers do this. A waiver does not cancel the separate disclosures below, and I usually pair a waiver with a thorough inspection rather than walk away.

Separate state and federal disclosures you will see on every Minnesota purchase agreement:

• Wells. The seller must disclose every well on the property, and a well disclosure certificate is filed when the deed is recorded. The county collects a $54 fee for that certificate (Minn. Stat. 103I.235).
• Septic. The seller discloses how sewage is treated and whether the system is known to be compliant (Minn. Stat. 115.55). Douglas County Land & Resource Management at 320-762-3863 can tell you what inspection, if any, the county requires at transfer.
• Radon. Under the Minnesota Radon Awareness Act the seller must tell you about any radon tests and give you the Department of Health's "Radon in Real Estate Transactions" publication (Minn. Stat. 144.496). Test anyway; it costs little and mitigation is a routine repair here.
• Methamphetamine. Sellers must disclose whether meth was ever produced on the property (Minn. Stat. 152.0275).
• Lead paint. Federal rule for any home built before 1978.

Step 7: Write an offer that protects you

The Minnesota REALTORS® purchase agreement gives you three tools. Use all three.

1. Inspection contingency. Hire a licensed inspector, and add a well water test and septic evaluation on rural property. A VA or USDA loan will require the water test anyway.
2. Financing contingency. If the loan falls through for reasons outside your control, you get your earnest money back.
3. Appraisal. Your lender orders it. If the home appraises low you renegotiate, bring cash, or walk.

Earnest money in this area is negotiated, held by the listing brokerage or a title company, and credited to you at closing. The amount is a signal of seriousness, not a fee.

Step 8: Closing costs that are specific to Minnesota

Online calculators use national averages. These are the Minnesota line items:

• Mortgage registry tax of 0.23 percent of the loan amount, paid by the borrower when the mortgage is recorded (Minn. Stat. 287.035, Dept. of Revenue). On a $240,000 loan that is $552.
• Deed tax of 0.33 percent of the sale price (Dept. of Revenue). By local custom the seller pays this, but it is negotiable.
• Well disclosure certificate, $54 if the property has a well (Minn. Stat. 103I.235).
• Certificate of Real Estate Value. Required for any sale over $3,000 and filed electronically by the closer (Dept. of Revenue eCRV). No fee to you, but the sale price becomes public record.
• Property tax proration. Minnesota taxes are due in halves on May 15 and October 15 (Minn. Stat. 279.01). Your closer splits the current year between you and the seller by the closing date.
• Title work, lender fees, homeowners insurance and prepaid interest, same as anywhere.

Minnesota closings run through title companies rather than attorneys, and you will sign at the title company's office or with a mobile notary.

Step 9: After closing, file for homestead

This is the step buyers forget, and it costs them. Minnesota's homestead classification lowers the tax rate on your primary residence. To get it for next year's taxes you must own and occupy the home by December 31 and file the application with the county assessor (Minnesota Dept. of Revenue, Homesteads). In Douglas County the application goes to the Assessor's Office in Alexandria (Douglas County Assessor); every county in my service area has the same December 31 cutoff.

Also in the first month: run a radon test if the seller did not, change the locks, and photograph the well cap and septic lids so you can find them under snow in February.

Checklist

• Confirm the three-year first-time buyer rule applies to every borrower
• Ask for a Minnesota Housing participating lender and a full pre-approval
• Complete homebuyer education before closing
• Choose Monthly Payment Loan, DPL or DPL+ based on your post-closing savings
• Sign and understand the buyer representation agreement and agency disclosure
• Review the seller's disclosure, plus well, septic, radon, meth and lead forms
• Keep inspection, financing and appraisal contingencies in the offer
• Budget the 0.23 percent mortgage registry tax and $54 well certificate
• Read the closing statement line by line before signing
• File homestead with the county assessor by December 31

Talk to Janet

If you are buying your first home anywhere in West Central Minnesota, call or text me at (320) 219-2488 and we will map out which of these programs fits you. Start with a home search consultation, or check what a home is worth with my home value tool if you are also selling.

Questions people ask

Do I need 20 percent down to buy a home in Minnesota?

No. Minnesota Housing's Start Up first mortgage works with low-down-payment loan types and adds up to $18,000 in down payment and closing cost help. Your own contribution can be as little as $1,000 or 1 percent of the price, whichever is less.

I owned a home five years ago. Am I still a first-time buyer?

Yes, under Minnesota Housing's rule. A first-time buyer is anyone who has not held an ownership interest in a principal residence during the last three years.

Can the seller refuse to give me a disclosure statement?

The seller can ask you to waive it, but only in writing, and the waiver does not remove the separate well, septic, radon, methamphetamine and lead paint disclosures. Pair any waiver with a full inspection.

Who pays the deed tax and mortgage registry tax in Minnesota?

By custom the seller pays the 0.33 percent deed tax and the buyer pays the 0.23 percent mortgage registry tax on the loan amount. Both are negotiable in the purchase agreement.

What happens if I miss the December 31 homestead deadline?

The county classifies the home as non-homestead for the coming tax year and you pay the higher rate until the next cycle. File with the county assessor as soon as you move in.