Deferred Payment Loan Plus First-Time Homebuyer Assistance Programs

Minnesota’s Deferred Payment Loan Plus: The First-Time Homebuyer’s Secret Weapon in 2024

Buying your first house can feel like paddling upstream in a leaky canoe—especially when every headline screams about rising prices. Enter the Deferred Payment Loan Plus, Minnesota’s under-the-radar lifesaver that lets you push pause on repayment until you sell, refinance, or finish your first mortgage. If you’re dreaming of a Saint Cloud starter or a Duluth duplex, keep reading; this guide unpacks everything you need in plain English.

What Is the Deferred Payment Loan Plus Program?

The Deferred Payment Loan Plus (often called DPL Plus or Deferred Payment Loan+) is a zero-interest, second mortgage offered by Minnesota Housing. Unlike conventional down-payment gifts that require monthly paybacks, this assistance simply waits in the wings—no payments and no interest until your main mortgage wraps up or the property changes hands.

• Loan Type: Deferred, zero-interest, subordinate lien.
• Purpose: Cover down payment and eligible closing costs.
• Maximum Amount: Up to $10,000 (or $13,000 in high-need ZIP codes).
• Availability: Statewide, with income and purchase-price caps.

If you’ve heard of the older “Deferred Payment Loan” without the “Plus,” know that the Plus version offers larger assistance to borrowers who meet tighter income limits. Think of it as the premium package for households needing the biggest boost.

Does the Deferred Payment Loan Plus Need to Be Repaid?

Short answer: yes—just not right now. Repayment kicks in only when one of three events happens:

1. You sell the property.
2. You refinance the first mortgage.
3. Your first mortgage reaches maturity.

Because there’s no monthly bill, your cash flow stays intact while you build equity. When you eventually settle up, you pay back exactly what you borrowed—no added interest. For many buyers that deferred nature is the difference between renting forever and owning today.

How Much Assistance Can You Get?

Minnesota Housing pegs the Deferred Payment Loan Plus limit at $10,000 statewide. Select census tracts classified as “up-and-coming” bump the ceiling to $13,000. To put that into perspective, the Minnesota Association of REALTORS® reported an average down payment of $27,650 statewide last year. Covering even a third of that nut can dramatically shrink the savings timeline.

Quick math: with 0% interest, a $10,000 DPL Plus loan keeps roughly $2,800 in your pocket compared to a 4% personal loan over five years—money you could funnel into an emergency fund or energy-saving upgrades.

Eligibility Checklist: Do You Qualify?

Nothing stings like falling in love with a program only to discover you earn $1,000 too much or bought a home $5,000 over the cap. Start with this checklist:

• First-time buyer: No ownership interest in a primary residence within the past three years (veterans exempt).
• Income Limits: Roughly 60% of Minnesota median income; varies by household size and county. For example, a family of four in Hennepin County cannot exceed around $72,000.
• Purchase Price Cap: $372,600 for single-unit homes in most counties; higher in Minneapolis–St. Paul metro.
• Credit Score: Minimum 640 for most loans; 660 for manufactured housing.
• Homebuyer Education: Complete a HUD-approved course such as HomeStretch or Framework.

Hit every bullet? You’re in the running. Miss one? Don’t slam the door yet; a loan officer familiar with DPL Plus may find exemptions or alternate programs like the Minnesota Housing Monthly Payment Loan.

Step-by-Step: How to Secure Your Deferred Payment Loan+

1. Get Pre-Approved. Work with a Minnesota Housing participating lender; they’ll run credit and verify income caps.
2. Finish Education. Complete the required eight-hour online or in-person course before signing a purchase agreement.
3. House Hunt. Zero in on properties beneath the purchase-price threshold. Your realtor can pull active listings that qualify.
4. Lock the Rate. Your lender reserves both the first mortgage and the DPL Plus funds in Minnesota Housing’s online portal. Funds are limited; reservations are date-stamped.
5. Close with Confidence. At the closing table, DPL Plus proceeds land in the settlement sheet as down-payment credits. No monthly line item appears on your new budget.

Tip: schedule education early; classes fill fast during spring market surges, and an expired certificate can delay closing.

Real-Life Snapshot: Sara’s North End Victory

Sara, a 29-year-old nurse in St. Paul’s North End, earned $58,000 last year. Student loans made saving a 5% down payment feel impossible. A savvy lender introduced her to Deferred Payment Loan Plus. With a $10,000 boost, Sara closed on a charming two-bed bungalow for $260,000. Her out-of-pocket cost on day one? Under $2,500. Three months later she converted the second bedroom into a short-term rental, netting an extra $450 monthly—proof that timely assistance can snowball into new income streams.

Can I Combine Deferred Payment Loan Plus with Other Assistance?

Absolutely. Minnesota Housing allows “layering” as long as another program’s rules don’t conflict. Popular combos include:

• Mortgage Credit Certificates (MCC) for ongoing federal tax savings.
• Local city grants—Minneapolis offers up to $10,000 for rehab in specific neighborhoods.
• Employer-Assisted Housing, such as Mayo Clinic’s forgivable loans in Rochester.

The key is coordination. Inform every funding source from day one so closing disclosures reflect the correct lien position and repayment triggers.

Pros & Possible Pitfalls

Market Context: Why 2024 Is a Prime Year to Leverage DPL Plus

Metro MLS data shows Twin Cities inventory at a 20-year low, yet interest rates dipped below 6.4% in March 2024—creating rare alignment between lower rates and still-moderate prices. Meanwhile, Minnesota Housing’s annual report notes only 58% of allocated DPL Plus funds were used last fiscal year. Translation: money is on the table, and competition hasn’t caught up—perfect conditions for alert first-timers.

FAQ

Next Steps: Turn Knowledge into Keys

Ready to swap that lease for a front-door key? Our mission is simple—empower Minnesota buyers with data-driven, actionable guidance. Connect with our trusted network of DPL Plus–approved lenders and real-estate advisors. We’ll map out a custom affordability plan and monitor inventory the moment a qualified listing hits the MLS. Your future porch swing is closer than you think.

Call or text 612-HOME-NOW or email keys@northstarrealty.com to schedule a free 15-minute strategy chat.

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