Minnesota Home Loans & Mortgage Rates

Minnesota’s housing market is anchored by one of the strongest metros in the Upper Midwest. The Minneapolis-St. Paul-Bloomington area dominates demand with a robust economy built on Fortune 500 companies (Target, UnitedHealth, 3M, Best Buy, General Mills), world-class healthcare (Mayo Clinic in Rochester), and a growing tech sector. The statewide median sits around $374,000, making Minnesota moderately priced for a high-income state.

Hennepin County (Minneapolis) has a median around $350,000 with wide variation from neighborhoods to suburbs. Edina and Wayzata push well above $500,000. Ramsey County (St. Paul) is slightly more affordable at about $310,000. Dakota County (Eagan, Apple Valley) approximately $370,000. Washington County (Woodbury, Stillwater) around $415,000. Scott County (Prior Lake, Shakopee) about $400,000. Rochester/Olmsted County (Mayo Clinic) approximately $325,000. Duluth/St. Louis County about $250,000.

Minnesota’s FHA limits are nearly uniform. The 13-county Minneapolis-St. Paul MSA receives a slightly elevated $552,000 FHA limit. All other counties sit at the baseline $541,287. The difference is minimal, and at Minnesota price points, FHA covers the vast majority of purchases statewide.

Minnesota Housing Finance Agency runs the Start Up and Step Up programs with competitive rates and DPA of up to $18,000 through Deferred Payment Loans. Local programs in Minneapolis, St. Paul, Anoka, Ramsey, and Dakota counties add significant additional assistance. Minnesota has moderate property taxes (approximately 1.02-1.12%) and no transfer tax for buyers.

2026 Loan Limit Takeaways

Minnesota’s FHA limits are essentially uniform. The 13-county Twin Cities MSA gets a modest bump to $552,000 (only $10,713 above baseline). At a statewide median of $374,000, FHA limits provide substantial headroom across all markets. Even in the most expensive Twin Cities suburbs, FHA covers the vast majority of purchases.

Down Payment Assistance Notes

Minnesota Housing’s Deferred Payment Loan (up to $18,000) combined with NeighborWorks HOM ($20,000) can provide $38,000+ in total assistance. On a $374,000 home, that covers the entire FHA down payment ($13,090) and most closing costs. Ramsey County ($15,000), Dakota County ($10,000), and other local programs add further layers. All programs require homebuyer education.

Closing Costs in Minnesota

Minnesota has moderate, buyer-friendly closing costs.

State Deed Tax: 0.33% ($3.30 per $1,000) of sale price. Paid by the SELLER. On a $374,000 home, seller pays approximately $1,234.

Mortgage Registration Tax: 0.23% ($2.30 per $1,000) of the mortgage amount. Paid by the BUYER. On a $360,000 mortgage, buyer pays approximately $828. This is Minnesota’s only notable buyer transfer-related tax.

Title Company State: Minnesota uses title companies for closings. No attorney requirement. Title insurance and closing fees typically $1,500-$2,500.

Estimated Total Buyer Closing Costs: On a $374,000 purchase, expect approximately $6,700-$13,100 (1.8-3.5%). The mortgage registration tax adds a modest cost, but overall Minnesota is a moderate-cost closing state. The seller-paid deed tax helps keep buyer expenses manageable.

Property Taxes in Minnesota

Minnesota property taxes are moderate to above-average, funded largely by local school levies and county services.

Statewide Average: Approximately 1.02-1.12% effective rate. Median annual payment approximately $3,000-$3,500.

Metro Area Rates: Hennepin County (Minneapolis) approximately 1.15%. Ramsey County (St. Paul) about 1.25%. Dakota County approximately 1.05%. Washington County about 1.00%. Scott County approximately 1.00%. Olmsted County (Rochester) about 1.10%.

Homestead Market Value Exclusion: Minnesota provides a homestead exclusion that reduces the taxable market value of owner-occupied homes. For homes valued up to $413,800, the exclusion reduces taxable value by up to $30,400. This provides meaningful savings especially on median-priced homes.

Property Tax Refund: Minnesota offers a Property Tax Refund (PTR) for qualifying homeowners based on income and property taxes paid. Can provide $500-$2,000+ in annual refunds for moderate-income homeowners.

On a $350,000 Minneapolis home, expect approximately $3,500-$4,000 per year after homestead exclusion. In Rochester on a $325,000 home, about $3,600. In Duluth on a $250,000 home, approximately $2,750.

USDA Loan Eligibility in Minnesota

Minnesota has extensive USDA eligibility across its rural landscape.

Most of Minnesota outside the Twin Cities, Rochester, St. Cloud, and Duluth metro cores is USDA eligible. Major eligible areas include southern Minnesota (Faribault, Waseca, Freeborn, Mower counties), western Minnesota (Lyon, Redwood, Yellow Medicine, Lac Qui Parle), northern Minnesota (Itasca, Beltrami, Cass, Crow Wing outside Brainerd), and the Iron Range communities.

Commuter-friendly USDA areas include outer Isanti County, Chisago County, portions of Le Sueur County, rural Goodhue County (Red Wing area), and areas along I-35 and I-94 corridors outside metro boundaries. Many lake communities popular with retirees also qualify.