How much do you need to put down on a house in the Twin Cities? As little as 3% on a conventional loan or 3.5% on an FHA loan. On the metro's September 2026 median sale price of $395,000, that is roughly $11,850 to $13,825. Twenty percent is not required.

You do not need 20% down to buy a home in Minneapolis, St. Paul, or the suburbs. Most buyers here don't. The question that matters more is whether the monthly payment works at today's rate with the down payment you actually have... and that is a math problem we can solve in about twenty minutes.

Below: the real minimums, what Twin Cities buyers are putting down right now, the local assistance programs, and the one number we'd check before you start touring homes.

The real minimums by loan type

The 20% rule is a leftover. A conventional loan with less than 20% down carries private mortgage insurance (PMI). PMI costs money every month, but it is not a wall. It is a line item.

Conventional loans: 3% to 5% down

A conventional loan backed by Fannie Mae or Freddie Mac can go as low as 3% down for first-time buyers, and 5% for most repeat buyers. You pay PMI until you reach 20% equity, then it drops off.

FHA loans: 3.5% down

FHA loans allow 3.5% down with more flexible credit requirements. The tradeoff is mortgage insurance that typically stays for the life of the loan unless you put 10% or more down.

VA and USDA loans: 0% down

Eligible veterans and service members can buy with zero down through a VA loan. USDA loans also allow zero down, but they are limited to rural areas, which rules out most of the metro. Some outer-ring communities qualify.

What that looks like on a Twin Cities home

The Twin Cities median sale price was $395,000 in September 2026, up 1.3% from a year earlier, according to the Minneapolis Area Realtors monthly indicators report. On that price:

3% down is $11,850
3.5% down is $13,825
5% down is $19,750
10% down is $39,500
20% down is $79,000

Closing costs are separate. Plan on a few percent of the purchase price on top, though seller-paid closing costs are negotiable right now. More on that below.

What buyers are actually putting down

The National Association of Realtors released its 2026 Profile of Home Buyers and Sellers on November 5, 2026. The median first-time buyer put down 9%. The median repeat buyer put down 19%. First-time buyers were 22% of all purchases, with a median age of 40.

So the typical first-time buyer is nowhere near 20%. The repeat buyer who gets close is usually using equity from the home they just sold, not cash from a savings account.

Where did the money come from? Per the same NAR report, 62% of first-time buyers used personal savings, 30% tapped assets like a 401(k) or stocks, and 25% got a gift or loan from family. Gift funds are allowed on conventional and FHA loans with a simple gift letter. If a parent wants to help, that is a normal path.

Twin Cities down payment assistance that exists right now

Minnesota and the City of Minneapolis have programs that cover a real chunk of a down payment.

Minnesota Housing Start Up loans

Minnesota Housing pairs its Start Up first-time buyer mortgage with downpayment and closing cost loans of up to $18,000. There are two flavors: a Monthly Payment Loan you repay alongside the mortgage, and a Deferred Payment Loan you repay when you sell or pay off the mortgage. Income limits, purchase price limits, and minimum credit scores apply, and the loan has to go through a participating lender.

City of Minneapolis down payment assistance

The City of Minneapolis offers down payment assistance of up to $20,000 as a 30-year deferred loan with no interest. The amount depends on household income: $10,000 for households at or below 80% of area median income, $20,000 for households below 60%. Applications go through partner organizations, and funds depend on what the city has available when you apply.

Suburban and county programs

Several metro counties and suburbs run their own first-time buyer programs through their community development agencies, and they open and close as funding allows. If you're buying in Dakota, Anoka, Washington, Scott, or Carver County, ask what's open before you assume nothing is. Most buyers never hear about these.

Assistance programs come with income limits, purchase price limits, and sometimes a homebuyer education class. They take a few extra weeks. In a market with 3.2 months of supply and 48 median days on market, per the same Minneapolis Area Realtors report, you have the time.

The number that matters more than the down payment

Rate is the excuse. Payment is the decision.

The Freddie Mac weekly survey put the 30-year fixed at 7.18% for the week of November 5, 2026, down from 7.24% the week before. A year ago it was 6.22%. That is where we are.

Put 5% down on a $395,000 home and you borrow about $375,000. At 7.18%, principal and interest run roughly $2,540 a month, before taxes, insurance, and PMI. Stretch to 10% down and you borrow about $355,500. The payment drops by roughly $130 a month.

That $130 is real. So is the $19,750 you'd pull out of savings to get it. If that money is your emergency fund or your furnace fund, a bigger down payment makes the purchase less safe, not more.

Our advice stands on one rule. The monthly payment has to work at today's rate, with the down payment you have, with cash left over. Not a payment that works if rates drop someday. Today's rate, today's payment, your actual bank balance.

That is what getting pre-approved for a mortgage is for. A real pre-approval means you know your monthly payment and you're comfortable with it. If you're not, the answer is a different price point or timeline, not a down payment that drains your reserves.

A smarter use for extra cash: buy down the rate or the price

Twin Cities sellers received 97.7% of original list price in September 2026, per Minneapolis Area Realtors, down from 98.4% a year earlier, and inventory was up 11.2%. Buyers have leverage they didn't have two years ago.

That leverage can buy seller-paid closing costs or a seller-paid rate buydown. A $10,000 seller credit applied to a permanent rate buydown often lowers your payment more than the same $10,000 added to your down payment. The math varies by lender and by day, so we run it both ways before you write an offer.

Your down payment is one lever. Price, seller credit, and rate are three more. We pull all four.

FAQ

Can I buy a house in Minnesota with no money down?

Yes, if you qualify for a VA loan or a USDA loan in an eligible rural area. For everyone else, the practical floor is 3% on a conventional loan or 3.5% on FHA, and Minnesota Housing or city assistance can cover part of that.

How much is a down payment on a $400,000 house in Minneapolis?

At 3% it's $12,000. At 5% it's $20,000. At 20% it's $80,000. Closing costs are separate, typically a few percent of the price, and are often negotiable with the seller in the current Twin Cities market.

Is it better to put 20% down to avoid PMI?

Only if you can do it and still have reserves left. PMI on a conventional loan drops off at 20% equity. Draining savings to skip it is often the worse trade.

Do first-time buyers in Minnesota get down payment help?

Yes. Minnesota Housing offers up to $18,000 in downpayment and closing cost loans with its Start Up mortgage, and the City of Minneapolis offers up to $20,000 as a deferred, no-interest loan for income-qualified buyers. Several suburban counties have their own programs.

Not sure what your number is?

The down payment question turns into a payment question within five minutes. We'll run your real numbers at today's rate, with the programs you qualify for, and tell you what works.

If buying in the Twin Cities is even a possibility this year, message GDP Homes and we'll think it through with you.