Key Takeaways
- The Step Up Program helps repeat buyers and homeowners purchase or refinance homes with affordable terms
- Offers fixed-rate FHA, Conventional, VA, or USDA loans
- Allows for refinancing, making it unique among housing programs
- Income and loan limits apply
- Optional down payment and closing cost assistance is available
- Must work with a Minnesota Housing-approved lender
What Is the Step Up Program Mortgage in Minnesota?
Buying a home isn’t just for first-time buyers—and Minnesota Housing recognizes that. The Step Up Program is a powerful mortgage option for repeat homebuyers and current homeowners looking to move up, refinance, or make housing more affordable.
This guide explains how the Step Up Program works in Minnesota, who qualifies, what benefits it offers, and how to apply.
What Is the Step Up Program?
The Step Up Program is a Minnesota Housing mortgage program designed for:
- Repeat homebuyers
- Current homeowners buying a new primary residence
- Borrowers refinancing their current home
It offers affordable fixed-rate loans and access to down payment and closing cost assistance—similar to the state’s popular Start Up program for first-time buyers.
Who Is the Step Up Program For?
Step Up is ideal for Minnesotans who:
- Already own a home but want to buy a new primary residence
- Have previously owned a home but are no longer first-time buyers
- Are looking to refinance their current mortgage at a better rate
- Want predictable monthly payments with low-cost loan options
- Need help with down payment or closing costs
It’s available across the state—from the Twin Cities metro to rural counties like Renville, Otter Tail, and beyond.
What Loan Types Are Available With Step Up?
The Step Up Program works with several loan types:
- FHA loans
- Conventional (HFA Preferred or HFA Advantage)
- VA loans
- USDA Rural Development loans
Borrowers can choose the loan type that best matches their credit profile and long-term goals, all while accessing Minnesota Housing benefits.
What Are the Key Benefits of the Step Up Program?
- Fixed interest rates
- Down payment and closing cost assistance (optional add-on)
- No first-time buyer requirement
- Refinance options available
- State-backed lending for peace of mind
- Supports low to moderate income ranges
The Step Up Program was designed to give current homeowners a fair shot at staying competitive in today’s real estate market.
What Is the Income Limit for Step Up Loans?
Step Up loans have income limits that vary by location and household size.
As of 2025, the base income limit is around $156,800 in most counties—but specific limits may be higher in certain metro areas. The limit applies to all borrowers listed on the application and is based on qualifying income, not household income.
Check with a Minnesota Housing-approved lender to get current, county-specific income limits.
What Are the Loan Limits for Step Up Mortgages?
Loan limits depend on the loan type you choose:
- FHA Loans – Follow county FHA loan limits
- Conventional Loans – Up to Fannie Mae/Freddie Mac conforming loan limits
- VA and USDA Loans – Follow federal limits and program guidelines
As of 2025, the conforming loan limit for a one-unit home in MN is $766,550.
Can You Use Step Up for Refinancing?
Yes. The Step Up Program supports rate-and-term refinancing—meaning you can replace your current mortgage with a new one that has a lower interest rate, shorter term, or more manageable monthly payment.
Cash-out refinancing is not allowed under this program.
What Is the Difference Between Step Up and Start Up?
| Feature | Step Up | Start Up |
| First-time buyer required? | No | Yes (or not owned in past 3 years) |
| Refinancing allowed? | Yes | No |
| Max household income | Up to ~$156,800 (2025 limit) | Slightly lower than Step Up |
| Down payment assistance? | Yes | Yes |
| Target audience | Move-up buyers, current owners | First-time buyers, renters |
Is Down Payment Assistance Available with Step Up?
Yes. Borrowers using Step Up can also qualify for Minnesota Housing down payment and closing cost assistance, including:
- Monthly Payment Loan
- Up to $18,000
- Repaid monthly over 10 years
- Deferred Payment Loan
- Up to $16,500
- No payments until the loan is repaid, refinanced, or the home is sold
- Available to qualifying income levels only
What Are the Credit Score Requirements?
Minimum credit score requirements are:
- FHA Loans – 640 (with some exceptions)
- Conventional (HFA Preferred) – 640 or higher
- VA and USDA Loans – Follow agency guidelines (usually 640+)
Lenders may have overlays, so it’s important to work with a Minnesota Housing-approved partner.
Are There Property Requirements?
The home must be:
- Located in Minnesota
- A single-family home, duplex, townhouse, or condo
- Used as the borrower’s primary residence
- Meet FHA/VA/USDA property standards (if applicable)
Vacation homes and investment properties do not qualify.
How to Apply for the Step Up Program
To apply:
- Choose a Minnesota Housing-approved lender (such as First Class Mortgage)
- Complete a pre-approval application
- Submit documentation (W-2s, pay stubs, credit check, ID)
- Choose your loan type and optional assistance
- Receive your Step Up loan approval and start shopping or refinancing
Borrowers can also take free online or in-person homebuyer education courses, though they may not be required for all Step Up scenarios.
How Long Does It Take to Close?
With a prepared buyer and responsive lender, a Step Up loan can typically close within 30 to 45 days—similar to most traditional mortgages.
Pros and Cons of the Step Up Mortgage Program
Pros
✔ Available to non-first-time buyers
✔ Fixed interest rates
✔ Access to assistance loans
✔ Refinance option
✔ Backed by the State of Minnesota
Cons
✘ Income limits apply
✘ Cash-out refinance not allowed
✘ Must use an approved lender
✘ Loan limits vary by product
Explore Step Up Mortgage Options With First Class Mortgage
Ready to move up, refinance, or access down payment assistance as a repeat homebuyer? First Class Mortgage is a Minnesota Housing-approved lender and can guide you through every step.
Call (763) 416-6789 or schedule a call to get started with the Step Up program.
First Class Mortgage
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