Alex Mayer explains how Minnesota Housing Loan and strategic planning make homeownership accessible despite affordability concerns.
First-time homebuyers often assume they need tens of thousands in savings before purchasing a home. According to Rochester MN real estate agent Alex Mayer, that assumption keeps qualified buyers on the sidelines longer than necessary.
“You can’t rent a property with a $1,000 security deposit,” Mayer points out. “But with the right programs and planning, you can buy a house for $1,000 out of pocket. That’s not theoretical. I have clients doing it every month.”
The math centers on Minnesota’s Housing Loan program, which provides $14,000 in interest-free financing for qualified buyers. Combined with strategic negotiation and understanding total housing costs, Mayer says first-time buyers can access homeownership far sooner than they realize.
The Fear of the Unknown
Mayer, who has guided hundreds of first-time buyers through purchases, identifies fear of the unknown as the primary barrier. “They don’t teach you how to buy a house in school,” he notes. “The biggest thing holding people back is not knowing what to expect.”
His approach prioritizes education before property tours. In initial consultations lasting 60-90 minutes, Mayer walks clients through financing types, what makes up a mortgage payment, how to evaluate properties, and what happens from offer to closing.
“Once you understand how all the pieces fit together, decisions become much easier,” he explains. “People think buying a $350,000 house means needing 20% down. That’s not how it works.”
Understanding the Competition
A critical element Mayer emphasizes: first-time buyers need to understand not just what they qualify for, but what their competition qualifies for.
“You’re more likely competing with other buyers than with the seller in today’s Rochester market,” he says. “If you don’t understand how your financing compares to other buyers’, you’re at a disadvantage.”
For example, a buyer using a conventional loan with 20% down presents stronger than one using FHA financing with 3.5% down. Knowing this helps buyers either strengthen their position or understand how to win on the terms and/or price.
Mayer also breaks down how property taxes, homeowners insurance, and mortgage insurance affect monthly payments. “You could have the same payment on a $400,000 house as on a $350,000 house depending on taxes and insurance,” he notes. “If you’re looking only at purchase price, you might focus on the wrong properties.”
The $14,000 Advantage
The Minnesota Housing Loan provides qualified buyers with $14,000 in interest-free financing for down payment and closing costs. For a $300,000 purchase, typical down payment requirements range from 3-5%, or $9,000-$15,000.
“If you qualify for the Minnesota Housing Loan, that $14,000 covers most or all of your down payment,” Mayer explains. “Add in seller-paid closing costs, which we can often negotiate, and you might only bring $1,000 to closing.”
The program requires meeting income limits and completing homebuyer education, but Mayer says many first-time buyers qualify without realizing it exists.
Common Mistakes to Avoid
According to Mayer, the biggest error first-time buyers make is scheduling showings online before understanding financing or working with an experienced agent.
“You go on a third-party website, schedule a showing, and sign paperwork with someone you’ve never met,” he describes. “That agent might be paying for leads and doesn’t have experience. Now you’re stuck working with them.”
Minnesota requires written buyer representation agreements. Once signed, buyers are committed to that agent regardless of experience level. Mayer recommends vetting agents before touring properties, asking about annual transaction volume and specialization in representing buyers.
He also warns buyers about recording devices in homes. “Ring doorbells, Alexa devices, security cameras, baby monitors are everywhere now,” he notes. “It’s illegal for sellers to listen in Minnesota, but that doesn’t mean they aren’t. Don’t discuss price, motivation, or criticize their decor at showings.”
The Experience Gap
National Association of Realtors data shows the median agent completed 3.92 transactions in 2024. That averages to roughly one buyer transaction and one seller transaction every six months.
“If an agent’s doing one buy-side deal every six months, they don’t have current market experience,” Mayer observes. “Things change week to week. You need someone who’s actively working with buyers regularly.”
He recommends first-time buyers work with agents completing at least 20 transactions annually, with specific experience guiding buyers through financing, inspections, appraisals, and negotiations.
Timeline Advantage
Another factor favoring first-time buyers: the timeline between closing and first payment. If a buyer found the perfect house today and closed in March, their first mortgage payment wouldn’t be due until May.
“You’re essentially skipping a month’s payment compared to renting,” Mayer notes. “For renters paying both security deposit and first months rent, that one month break with homeownership offers significant savings they can put toward moving costs or furnishing the home.”
Mayer recommends first-time buyers contact an agent two months before they’re ready to purchase, allowing time to optimize financing, understand market conditions, and identify potential programs or grants they qualify for.
For Rochester MN first-time buyers, the message is clear: homeownership is likely more accessible than assumed, but requires education, planning, and working with experienced professionals who prioritize explaining the process clearly.
About Alex Mayer Alex Mayer is a full-time Rochester MN real estate agent, a 4X winner of Best Real Estate Agent in Rochester MN with 300+ five-star reviews. His core values are Education, Communication, and Responsiveness which guide every part of his business. His promise: You’ll know what to expect, how to operate, and what needs to be done to be successful in the Rochester MN real estate market. He specializes in first-time homebuyers, Mayo Clinic and other relocating buyers, and Rochester MN sellers, including move-up, downsizing, and estate sales.