If you’re thinking about buying a home in Minnesota, you’ve probably asked:
👉 “Can I buy a house with no money down?”
This is one of the most common questions—especially for first-time buyers.
Because for a lot of people, the biggest obstacle isn’t the monthly payment…
👉 It’s the upfront cost.
The idea of needing thousands of dollars can feel overwhelming.
But here’s the truth:
👉 Yes, in some cases, you can buy a home in Minnesota with no money down.
But there are important details you need to understand.
The Short Answer
👉 Yes—there are loan programs that offer 0% down payment options
However:
👉 Not everyone qualifies
👉 And “no money down” doesn’t always mean “no money needed at all”
What “No Money Down” Actually Means
When people say “no money down,” they’re referring to:
👉 No down payment required
But that does NOT mean:
- No closing costs
- No upfront expenses
- No financial requirements
👉 You may still need to cover other costs associated with buying a home
Loan Programs That Offer 0% Down
There are two primary types of loans that may allow no down payment:
1. VA Loans (For Eligible Veterans)
If you’re eligible for a VA loan:
👉 You may be able to buy with 0% down
Benefits include:
- No down payment
- Competitive interest rates
- No private mortgage insurance (PMI)
2. USDA Loans (Location-Based Eligibility)
USDA loans are designed for certain areas.
👉 Some locations in Minnesota qualify
Benefits:
- 0% down payment
- Lower mortgage insurance costs
👉 Eligibility depends on:
- Property location
- Income limits
- Loan requirements
What Most Buyers Don’t Realize
Even if you qualify for a 0% down loan…
👉 You still have closing costs
Typical Closing Costs in Minnesota:
👉 Around 2%–5% of the home price
Example:
On a $350,000 home:
- Down payment → $0
- Closing costs → ~$7,000–$17,500
👉 So you still need to plan for upfront costs
Ways Buyers Cover Closing Costs
Here’s where strategy comes in.
Many buyers don’t pay everything out of pocket.
1. Seller Concessions
In some cases:
👉 The seller may contribute toward your closing costs
This depends on:
- Market conditions
- Negotiation strength
2. Lender Credits
Some lenders offer:
👉 Credits to reduce upfront costs
In exchange for:
- A slightly higher interest rate
3. Builder Incentives (New Construction)
If you’re buying new construction:
👉 Builders often offer closing cost assistance
This can significantly reduce what you need upfront.
Can First-Time Buyers Use No Money Down Options?
Yes—if you qualify.
But here’s the reality:
👉 Most first-time buyers still put down 3%–5%
Why?
- More loan options
- More flexibility
- Easier qualification in some cases
The Biggest Misconception About “No Money Down”
A lot of buyers think:
👉 “If I can buy with no money down, I should.”
But that’s not always the best strategy.
Why?
Because you need to consider:
- Monthly payment
- Interest rate
- Long-term financial comfort
No Money Down vs Low Down Payment
Let’s compare:
0% Down
Pros:
- No down payment required
- Easier to get started
Cons:
- Higher monthly payment
- Fewer loan options
- Still need closing costs
3%–5% Down
Pros:
- More loan options
- Often more competitive offers
- Balanced approach
Cons:
- Requires some savings
👉 For many buyers, 3%–5% down is the sweet spot
A Real Situation I See All the Time
A buyer comes in saying:
👉 “I want to buy with no money down.”
We go through their options.
And they realize:
👉 Putting down a small amount actually gives them:
- Better loan options
- More flexibility
- A stronger overall position
What About New Construction Homes?
This is important—especially in Minnesota.
Even though buyers can go directly to a builder…
👉 You should still have your own REALTOR® represent you.
Why This Matters
- The builder represents their interests—not yours
- Your representation helps protect you
- It typically costs you nothing
👉 One of the most important steps:
Before visiting a builder or signing anything, talk to your REALTOR®.
How to Know If You Qualify
The only way to know for sure is to look at:
- Your income
- Your credit
- Your debt
- Your eligibility for specific programs
Steps to Move Forward
Here’s a simple plan:
Step 1: Understand Your Options
Know what loan programs are available to you.
Step 2: Talk to a Lender
Get real numbers—not assumptions.
Step 3: Explore Your Strategy
0% down vs low down payment.
Step 4: Build a Plan
Decide what works best for your situation.
Common Mistakes to Avoid
- Assuming no money down means no upfront cost
- Not planning for closing costs
- Choosing 0% down without comparing options
- Not exploring all loan programs
- Going to a builder without representation
FAQ: No Money Down in Minnesota
Can I really buy a house with no money down?
Yes, if you qualify for certain loan programs like VA or USDA.
Do I still need money upfront?
Yes—closing costs still apply in most cases.
Is no money down a good idea?
It depends on your situation and financial goals.
What’s the most common down payment?
Many buyers put down 3%–5%.
Final Thoughts
Buying a home with no money down is possible—but it’s not always the full picture.
👉 The goal isn’t just to get in with $0
👉 The goal is to choose the right strategy for YOU
When you understand your options clearly:
👉 You can move forward with confidence
Next Step
If you want to explore your options—including low down payment and no money down opportunities—in the Twin Cities & surrounding metro Minnesota, the next step is to get clarity on your situation:
👉 https://buy.dreamhomesminnesota.com/
Lesley The Realtor
Realtor in the Twin Cities & Surrounding Metro, Minnesota
Helping first-time and relocation buyers find the right home and location