Downpayment Assistance

First Homes is a non-profit subsidiary of the Rochester Area Foundation with the goal of assisting individuals and families in the purchase of homes based on funding. First Homes offers homebuyers financial assistance to reduce monthly mortgage payments and also works in partnership with MN Housing, making home ownership affordable. In some cases the monthly mortgage payments for the homes are comparable to rent payment.

Financial Assistance for Qualified Buyers

Minnesota Housing

  • "Start Up" Funds through the Minnesota Housing Finance Agency which provides down payment and/or closing costs. This is a 0% interest-free deferred loan that is repaid when you sell your property; refinance your property or when you've paid off your first mortgage. Must be owner-occupied. For first-time homebuyers or those who have not owned in the last 3 years.

  • "Step Up" Funds for non-first-time homebuyers to purchase or refinance a home.  The program offers affordable, fixed-rate loans and access to Minnesota Housing Monthly Payment Loans for downpayment and closing costs for eligible borrowers through participating lenders. Must be owner-occupied.

  • Income guidelines listed on website.

First Homes - Gap Loan

Downpayments and closing costs can serve as a significant barrier to homeownership. To bridge the gap, First Homes offers gap loans up to $12,000 to income-qualified applicants purchasing market-rate homes and Community Land Trust (CLT) homes.

CLT Gap Loans- Gap loans of up to $12,000 are available to income-qualified buyers of CLT homes through the First Homes program. Loans are charged at 0% interest and must be paid back after 30 years, upon refinancing, or upon sale of the home, whichever occurrs first. 

Market-Rate Gap Loans- Gap loans of up to $12,000 are available to income qualified buyers of market-rate homes. Loans are charged at 2% interest over 10 years and must be paid back after 10 years, upon refinancing, or upon sale of the home, whichever occurrs first.

Who Qualifies for Gap Loans?- First Homes serves homebuyers at or below 80% area median income. This changes yearly based on Minnesota Housing and the Housing and Urban Development Department, so click here to view the latest income guidelines.

Information for Lenders- To request a gap loan for your client, complete the 'Gap Loan Request' document linked below and submit it to First Homes' Program Associate at Please also direct any questions about the application or whether your client qualifies to the First Homes' Program Associate.

Request a Gap Loan

Deferred and Gap Loans are due and payable upon sale of the home, refinance or at the end of the term of the first mortgage. Certified Lenders determine eligibility for Deferred Loans.

Community Land Trust (CLT)

First Homes pays the subsidy of the lot/land and buyers purchase and own the buildings and improvements. Homeowners are given a renewable lease to the lot which the home is built. By not paying for the lot, the homeowner pays considerably less on their mortgage, making the homes very affordable. The bank evaluates the appraised value at the time of purchase. The CLT meets the loan to value (LTV) on the property required by lenders, usually eliminating Private Mortgage Insurance (PMI) premiums for buyers.

When the homeowner chooses to sell the home, First Homes Community Land Trust staff assists the homeowner in selling the property. Homeowners receive the equity they have earned and half the appreciation in market value of the home. The remainder of the appreciation stays with the home to ensure a supply of affordable homes in the greater SE MN area.