6 Ways Family Can Help You Buy a Home in Minnesota
Buying your first home is a big step—and it’s okay if you need a little help along the way. In fact, many first-time buyers lean on family for support, whether it’s financial assistance or simply someone to help navigate the process. If you're wondering how your loved ones might be able to lend a hand, here are six ways they can make a real difference.
1. Gift Funds for a Down Payment
One of the most common ways family members help is by giving a financial gift to cover part (or all) of the down payment. This doesn’t need to be paid back, and it can make a big difference in reducing your upfront costs. A larger down payment might also help you qualify for a better interest rate. Just keep in mind that if the gift is more than $18,000, the person giving it may need to file a gift tax return. It’s a good idea to talk to a tax advisor to make sure everything’s squared away.
2. Cosigning on a Mortgage
If your income or credit history isn’t quite where it needs to be, a family member can cosign your mortgage. This means they’re agreeing to take responsibility for the loan if you can’t make the payments. It can help you qualify for a loan or get better terms, but it’s a serious commitment. Cosigning affects their credit and could impact their ability to borrow in the future, so it’s important to have an open and honest conversation about what it means.
3. Co-Borrowing on a Mortgage
This is a little different from cosigning. When someone co-borrows with you, they’re not just backing the loan—they’re sharing it. You both own the home and are equally responsible for the mortgage payments. This can help you qualify for a larger loan and build equity together, but it also means shared responsibility. Make sure you’re both clear on expectations and long-term plans.
4. Personal Loan from a Family Member
Sometimes a family member might be willing to lend you money directly—maybe to pay off debt or cover part of your home purchase. These loans can be more flexible than traditional ones, but it’s still important to treat them like any other financial agreement. Put the terms in writing, including how and when you’ll repay the loan, to avoid misunderstandings later on.
5. Rent-to-Own with a Family Landlord
In some cases, a family member might buy a home and rent it to you, with the option to purchase it later. This can give you time to save for a down payment or improve your credit while still living in the home you plan to buy. It’s important to have a clear, written agreement that outlines the rent, purchase timeline, and what happens if plans change.
6. Temporary Financial Help
Even small expenses like appraisal fees or closing costs can add up. A short-term loan or gift from a family member can help cover these one-time costs and ease some of the financial pressure. Just be sure to talk about whether repayment is expected and when.
How to Talk to Family About Mortgage Help
Asking for help can feel awkward, but a thoughtful conversation can go a long way. Here are a few tips to keep things comfortable and respectful:
• Be honest about your goals and why you’re asking for help.
• Explain what kind of support you’re looking for—whether it’s a gift, a loan, or cosigning.
• Show that you’ve thought it through. If you’re asking for a loan, have a repayment plan ready.
• Be understanding if the answer is no. Not everyone is in a position to help, and that’s okay.
• If they agree to help, put everything in writing. It protects both of you and keeps expectations clear.
Here are a few sample ways to start the conversation:
• “I’ve been saving for a home, but I’m a little short on the down payment. Would you consider helping with a gift or loan? I’ve put together a plan for how I’d repay you.”
• “I’m close to qualifying for a mortgage, but I need a cosigner to get there. Would you be open to that? I’d take full responsibility for the payments and make sure everything is documented.”
• “I’m trying to pay down some debt to qualify for a mortgage. Would you be willing to help with a short-term loan? I’ve created a budget and repayment plan.”
And no matter what the outcome is, don’t forget to say thank you:
• “I really appreciate you listening and supporting me, even if you can’t help financially. It means a lot.”
Let’s Find the Right Program for You
Minnesota has some great programs for first-time buyers, including options with low down payments and flexible credit requirements. Programs like 3-2-1 Home Plus, 1% Down Payment Advantage, and MyPath2Own are designed to help people just like you.
If you’re ready to explore your options, I’d love to help you find the right fit. Reach out anytime—I’m here to make the process feel a little less overwhelming and a lot more doable.
This post is for educational purposes only. Loan programs and rates can change, and all loans are subject to approval. Be sure to talk to a tax advisor about any potential tax implications.