First-Time Homebuyer Programs in Michigan

Down Payment Assistance Programs

• MSHDA MI Home Loan with Down Payment Assistance. MSHDA's flagship paired first mortgage and down payment assistance product: a below-market 30-year fixed-rate first mortgage available with FHA, VA, USDA-RD, or conventional underwriting through MSHDA-approved lenders, with up to $10,000 in Down Payment Assistance structured as a 0% interest deferred second mortgage due on sale, refinance, or when the home is no longer the borrower's primary residence. Available to first-time buyers statewide (and to repeat buyers in MSHDA-designated targeted areas), within MSHDA's income and purchase price limits and with HUD-approved homebuyer education required.
• MSHDA MI Home Loan Flex. MSHDA's secondary first mortgage and DPA product, designed for buyers who don't meet the standard MI Home Loan requirements - for example, repeat buyers outside targeted areas, or buyers whose specific underwriting profile doesn't fit the standard MI Home Loan box. MI Home Loan Flex offers up to $7,500 in Down Payment Assistance structured as a 0% interest deferred second mortgage and pairs with a below-market 30-year fixed-rate first mortgage. Eligibility tests are different from the standard MI Home Loan - ask a MSHDA-approved lender to run both side by side if you're not sure which product fits.
• MSHDA Mortgage Credit Certificate (MCC). A federal income tax credit administered by MSHDA that converts a portion of the mortgage interest a Michigan first-time buyer pays each year into a dollar-for-dollar federal tax credit (typically up to $2,000 per year), available every year the borrower keeps the loan and the home as a primary residence. The MCC is in addition to the standard mortgage interest deduction on the remaining interest, and it can be paired with a MSHDA MI Home Loan or MI Home Loan Flex first mortgage. Issued at closing and must be requested in advance through a MSHDA-approved lender - it cannot be added retroactively.
• USDA Rural Development (USDA-RD) Loans in Michigan. USDA Rural Development guaranteed and direct loans offer 100% financing (no down payment required) for primary residences in USDA-eligible areas, and most of Michigan qualifies outside the Detroit, Grand Rapids, Lansing, Ann Arbor, and Kalamazoo metro cores - including most of the Upper Peninsula, most of the northern Lower Peninsula, the Thumb, and most of mid-Michigan and the western Lower Peninsula outside the immediate Grand Rapids commuter shed. USDA Guaranteed loans require household income at or below 115% of area median income and a credit score generally of 640 or higher. MSHDA's first mortgage can be underwritten as USDA-RD, which lets the buyer keep MSHDA's pricing plus DPA while taking advantage of USDA's zero-down structure - the DPA can then be applied to closing costs and prepaid items instead of a down payment.

Income and Purchase Price Limits

MSHDA income and purchase price limits vary by county and household size, with higher limits in Oakland, Washtenaw, Kent, and other higher-cost counties and in MSHDA-designated targeted areas. Income limits generally range from roughly $95,000 in lower-cost Michigan counties to $135,000+ in higher-cost southeast Michigan counties for 1-2 person households, with higher limits for 3+ person households. Purchase price limits typically fall in the $250,000-$425,000 range across most of the state, with higher limits in southeast Michigan and Ann Arbor. The MSHDA MCC uses its own first-time buyer and income/purchase price tests that closely track MI Home Loan limits. USDA Guaranteed loans use a separate income limit (115% of area median income) that often allows higher household income than MSHDA's standalone limits in the same county. Always confirm current MSHDA and USDA income and purchase price limits with a MSHDA-approved lender or at michigan.gov/mshda before assuming eligibility.

City Programs Worth Knowing

Detroit, Grand Rapids, Lansing, and Flint each run city or partnership programs designed to stack with MSHDA financing. Detroit Home Mortgage is structurally unique - it addresses appraisal-gap financing, not down payment - and is the most distinctive city-level homeownership product in the state. The others are more conventional deferred or forgivable DPA second mortgages.

• Detroit Home Mortgage. Up to $25,000 in gap financing for buyers purchasing homes inside City of Detroit limits where the negotiated purchase price exceeds the appraised value - a structurally unique product not found in most other cities. The problem Detroit Home Mortgage solves: in many Detroit neighborhoods, market sale prices have recovered faster than comparable sales support, so conventional appraisals frequently come in well below the purchase price, blocking financing on otherwise sound transactions. Detroit Home Mortgage provides a second mortgage equal to the difference between the appraised value and the sale price (up to $25,000), letting the buyer close on the property at the negotiated price rather than walking away because of the appraisal gap. The structure is intended to support owner-occupancy and price recovery in Detroit's neighborhoods rather than down payment assistance per se - which is why it stacks alongside (not instead of) MSHDA's MI Home Loan DPA. Confirm participating lenders and current program parameters with Detroit Home Mortgage or your MSHDA-approved lender before writing an offer.
• City of Grand Rapids Down Payment Assistance Program. Up to $7,500 in down payment and closing cost assistance for income-qualified first-time buyers purchasing a primary residence inside City of Grand Rapids limits. Structured as a deferred or forgivable second mortgage with multi-year continuous owner-occupancy requirements, HUD-approved homebuyer education required, and designed to stack with MSHDA's MI Home Loan or MI Home Loan Flex. Confirm availability with the City of Grand Rapids Community Development Department before applying, as funding cycles can exhaust mid-year.
• City of Lansing Home Purchase Assistance Program. Up to $10,000 in down payment and closing cost assistance for income-qualified first-time buyers purchasing a primary residence inside City of Lansing limits. Structured as a deferred or forgivable second mortgage with multi-year continuous owner-occupancy requirements, HUD-approved homebuyer education required, and designed to stack with MSHDA financing. Confirm availability with the City of Lansing Department of Economic Development and Planning before applying.
• Flint Homeowner Assistance Fund. Up to $20,000 in down payment and closing cost assistance for income-qualified first-time buyers purchasing a primary residence inside City of Flint limits, focused on neighborhood stabilization and getting owner-occupants back into the city's housing stock. Structured as a deferred or forgivable second mortgage with multi-year continuous owner-occupancy requirements, HUD-approved homebuyer education required, and designed to stack with MSHDA's MI Home Loan and the MSHDA MCC. The $20,000 ceiling is one of the more generous city-level DPA amounts in Michigan and reflects Flint's explicit policy commitment to stabilizing occupancy in neighborhoods affected by long-running disinvestment. Confirm current funding and program parameters with the City of Flint before applying.

All of these city programs run on funding cycles that can exhaust mid-year, and homebuyer education must be completed before application - not after offer acceptance. The city agency review step extends closing timelines by several weeks beyond a standard MSHDA-only closing; Detroit Home Mortgage in particular has its own underwriting workflow because of the appraisal-gap structure and should be set up at the front of your timeline, not at the end.

FHA Loan Requirements in Michigan

FHA loans are widely used by Michigan first-time buyers and are compatible with MSHDA's MI Home Loan, MI Home Loan Flex, the MSHDA MCC, the City of Grand Rapids and City of Lansing DPA programs, and the Flint Homeowner Assistance Fund. Detroit Home Mortgage is typically delivered alongside a conventional or FHA first mortgage and is specifically designed to make appraisal-gap purchases financeable that would otherwise fall through. Across all of Michigan, FHA loan limits use the standard single-family ceiling except in Washtenaw County and a handful of higher-cost southeast Michigan counties, which carry modestly elevated limits.

How to Apply

1. Check your credit score - 580 is the FHA minimum for 3.5% down, MSHDA and USDA Guaranteed both typically require 640 or higher, and some MSHDA conventional structures require 660+.
2. Review current MSHDA income and purchase price limits for your county at michigan.gov/mshda - and check whether your county is a MSHDA-designated targeted area (which opens MSHDA's first mortgage programs to repeat buyers, not just first-time buyers).
3. Decide between the standard MI Home Loan ($10,000 DPA) and MI Home Loan Flex ($7,500 DPA) - your MSHDA-approved lender can run both side by side based on your underwriting profile.
4. Request the MSHDA Mortgage Credit Certificate (MCC) at application - it delivers an annual federal tax credit for the life of the loan, must be issued at closing, and cannot be added retroactively.
5. If you're buying inside City of Detroit limits, ask your MSHDA-approved lender or contact Detroit Home Mortgage directly about gap financing - if the negotiated purchase price exceeds the appraised value (a common pattern in Detroit neighborhoods), Detroit Home Mortgage can bridge the gap up to $25,000 and make the transaction financeable.
6. If you're buying inside City of Grand Rapids limits, contact the City of Grand Rapids Community Development Department to confirm Down Payment Assistance Program eligibility and current funding.
7. If you're buying inside City of Lansing limits, contact the City of Lansing Department of Economic Development and Planning to confirm Home Purchase Assistance Program eligibility and current funding.
8. If you're buying inside City of Flint limits, contact the City of Flint to confirm Homeowner Assistance Fund eligibility and current funding - the $20,000 Flint stack is one of the deeper city-level DPA amounts in Michigan.
9. Check the USDA Rural Development eligibility map by property address if you're considering a property outside the major metros - most of Michigan qualifies, and USDA's zero-down structure plus MSHDA DPA redirected to closing costs is often the most efficient stack available.
10. Complete a HUD-approved homebuyer education course - required by MSHDA and by each city program.
11. Apply through a MSHDA-approved lender, who will coordinate the MSHDA application, the DPA request, the MCC issuance, Detroit Home Mortgage gap financing (if applicable), the USDA Guaranteed loan submission (if applicable), and any city DPA approval simultaneously.

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