MI Home Loan program
Offered by the Michigan State Housing Development Authority (MSHDA), the MI Home Loan program is designed specifically for first-time homebuyers throughout the state. It features a 30-year fixed-rate mortgage that can be underwritten as a conventional loan, Federal Housing Administration (FHA) loan, VA loan or U.S. Department of Agriculture (USDA) loan.
To qualify, you must work with an approved lender and be a first-time homebuyer who hasn’t owned property within the last three years. You may also qualify if you’re a repeat homebuyer purchasing in a neighborhood that’s been designated by the state as a target area for revitalization.
The MI Home Loan program sets household income limits, which vary depending on the location of the property. There’s a 640 minimum credit score requirement and a maximum sale price limit of $566,355.
MSHDA Rate Relief Mortgage Program
The MSHDA Rate Relief Mortgage Program previously offered 30-year fixed-rate loans with reduced interest rates. As of publishing, this program is paused due to funding exhaustion. Check the MSHDA website for information about whether the MSHDA Rate Relief Mortgage Program will reopen.
Down payment assistance options
In addition to mortgage assistance, several down payment assistance options are available for first-time homebuyers in Michigan.
MI 10K Down Payment Assistance Program
With the MI 10K Down Payment Assistance (DPA) Program, you can receive up to $10,000 in an interest-free loan if you are a Michigan homebuyer with a low to moderate income. You can use these funds toward your down payment, closing costs or prepaid expenses.
The MI 10K DPA loan must be used in conjunction with an MI Home Loan. A homebuyer education class is required, and you must work with an MSHDA-approved lender to apply.
HomeBoost Down Payment Assistance Program
The HomeBoost Down Payment Assistance Program provides up to $25,000 that you can use for a down payment, closing costs or counseling fees. The program is available to first-time, first-generation homebuyers in Michigan and Indiana who are purchasing a primary residence.
You must contribute at least $500 toward your home purchase, complete homebuyer education and apply through a participating lender affiliated with FHLBank Indianapolis. HomeBoost applications open annually in July.
National Faith Down Payment Assistance Program
The National Faith Down Payment Assistance Program provides a fixed, forgivable, zero-interest loan of $13,999 for eligible first-time homebuyers in metro Detroit (Wayne County) and Atlanta. Funds must be used with a primary mortgage, and the buyer must contribute $1,000 of their own funds.
Homes must pass a Housing Quality Standards inspection, and all applicants must complete a homebuyer education course. Availability varies by city — eligible locations include Detroit and many Wayne County communities — with forgiveness after five years of ownership.
MSHDA First-Generation Down Payment Assistance Program
As of publishing, the MSHDA First-Generation Down Payment Assistance Program is paused after exhausting its initial $8 million in funding. The program isn’t accepting new applications but may reopen if additional resources become available.
When active, the program offered up to $25,000 for down payments, closing costs and prepaid escrows to eligible first-time homebuyers across Michigan.
To qualify, applicants had to meet several conditions, including:
- Not owning a home in the past three years
- Purchasing a primary residence priced below $544,233
- Working with an MSHDA-approved participating lender
Additional eligibility rules apply. A lender can help guide you through the requirements if the program is renewed in the future.
City-specific homebuyer programs
There are also city-specific programs that can assist first-time homebuyers in Michigan.
Detroit
Detroit Neighborhood Initiative
The Detroit Neighborhood Initiative offers below-market, fixed-rate home loans to homebuyers living in Detroit. Loan amounts may go up to 110% of the home’s loan-to-value (LTV) ratio or 150% if buying through the Detroit Land Bank site. Loans have no down payment, closing costs or fees.
Your credit score is not a condition of approval. However, homebuyers must complete the Neighborhood Assistance Corporation of America prepurchase homebuyer program and homebuyer counseling to qualify.
Detroit Down Payment Assistance Program
The Detroit Down Payment Assistance Program provides up to $25,000 in assistance. Funds can be used for a down payment, closing costs, principal reduction or interest rate buydowns. Eligible applicants must have lived in Detroit for at least 12 months or lost a home to property tax foreclosure in the city between 2010 and 2016.
Additional requirements include:
- Not owning property in the past three years
- Having a household income below the AMI for your household size
- Completing an approved homebuyer education course
Grand Rapids
The Homebuyer Assistance Fund Program in Grand Rapids provides up to $7,500 in assistance to low- and moderate-income homebuyers. Funds can go toward your down payment, closing costs and prepaid expenses on a home within Grand Rapids city limits.
To qualify, you must be at least 18 years old and not have owned a home within the previous three years. You must occupy the home as a primary residence for at least five years. Additional purchase price and household income limits apply, and you can’t have more than $10,000 in household assets. The property must pass a detailed inspection, and you must complete an approved homebuyer course.
MSHDA Mortgage Credit Certificate
The MSHDA also offers the Mortgage Credit Certificate (MCC), a federal tax credit that Michigan first-time homebuyers can use for housing assistance. You can credit 20% of your annual mortgage interest paid in a dollar-for-dollar reduction against your yearly tax liability. You can use this credit every year for the life of the mortgage (up to 30 years).
First-time homebuyers can use the credit for properties statewide, while repeat homebuyers may only use it in targeted areas. The MCC must be obtained before you buy a home, and you must use an approved MCC lender.
Household income limits depend on the size of your family and the location of your property, but the sale price can’t exceed the $544,233 maximum.
How to qualify for Michigan first-time homebuyer programs
If you plan to use a Michigan first-time homebuyer program, these steps can give you a head start on the qualification process.
- Confirm eligibility: Most Michigan first-time homebuyer programs, including both mortgage and assistance options, have limits based on location and the home's purchase price. Make sure the property you're considering meets the program’s requirements.
- Check your credit: Obtain a copy of your credit report to ensure you meet the minimum credit requirements for the program. Most Michigan first-time homebuyer programs require a 640 credit score or higher, but it ultimately depends on the type of mortgage loan you apply for.
- Confirm your debt-to-income ratio: Your debt-to-income ratio shows how much of your monthly income goes to debt. Some programs set a maximum debt-to-income ratio.
- Gather documents: To support your loan application, you’ll need to supply certain documentation, including photo identification, proof of income, proof of employment and past rental information.
- Select a lender: Most Michigan first-time homebuyer programs require that you work with a specific mortgage lender associated with the program. Be sure to check the program requirements and select a lender from the approved list.
- Complete homebuyer education. Another requirement is completing an approved homebuyer education course or speaking directly with an approved housing counselor. You may be able to fulfill these requirements online, depending on the program.
FAQ
What is the $7,500 first-time homebuyer grant in Michigan?
First-time homebuyers with low to moderate income can receive up to $7,500 toward a home in Grand Rapids, Michigan, through the Homebuyer Assistance Fund program. You can use these funds toward your down payment, closing costs and prepaid expenses.
There’s also a statewide MSHDA loan that offers up to $7,500 in mortgage assistance toward your down payment or closing costs.
What is the 10K first-time homebuyer program in Michigan?
First-time homebuyers in Michigan can apply for the MI 10K DPA loan, which can give low- to moderate-income buyers an interest-free loan of up to $10,000. This loan must be used with the MI Home Loan. Funding for the MI 10K DPA loan can be put toward your down payment, closing costs or prepaid expenses.
How can I apply for down payment assistance in Michigan?
The application process for Michigan down payment assistance depends on the program you use, but most require you to work with an approved lender. The lender can guide you through the homebuying process and help ensure you meet the requirements for the program.
Are there any programs for first-time homebuyers with bad credit in Michigan?
Most Michigan first-time homebuyer programs have credit requirements, but they’re generally more flexible with bad credit than traditional loans. Statewide programs have a minimum requirement of 640, allowing borrowers with fair credit to get a loan.
Additional resources for first-time homebuyers
These national resources can be combined with many Michigan state homebuyer programs.
- FHA loans: The U.S. Department of Housing and Urban Development (HUD) provides FHA loans for borrowers with low credit scores or limited savings. Most borrowers qualify with a 3.5% down payment and a minimum credit score of 580, although those with lower credit may need to put down 10%.
- VA loans: The Department of Veterans Affairs provides VA loans with low interest rates and no down payment for members of the military, veterans and eligible family members.
- USDA loans: Designed for buyers in rural areas, USDA loans don’t require a down payment. You typically need a 640 minimum credit score to qualify.
- Freddie Mac Home Possible mortgages: Home Possible mortgages by Freddie Mac are designed for those with extremely low income and require just a 3% down payment. However, you must have a minimum credit score of 660.
- Fannie Mae HomeReady mortgages: HomeReady mortgages by Fannie Mae also feature 3% down payments but only require a minimum credit score of 620 to qualify. These loans can be helpful to low-income homebuyers.
- Fannie Mae 97% LTV loan: First-time homebuyers can use this loan when they have a 620 minimum credit score and contribute a 3% down payment. No income requirements apply.
- Good Neighbor Next Door program: Certain types of professionals, including police officers, firefighters, emergency medical technicians and teachers, can receive up to 50% off a property in a HUD-designated revitalization area.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Redfin, “Michigan Housing Market.” Accessed June 13, 2026.
- Michigan State Housing Development Authority, “MI Home Loan.” Accessed June 13, 2026.
- Michigan State Housing Development Authority, “MSHDA Rate Relief Mortgage.” Accessed June 13, 2026.
- Michigan State Housing Development Authority, “MI 10K DPA Loan.” Accessed June 13, 2026.
- FHLBank Indianapolis, “HomeBoost — Down Payment Assistance.” Accessed June 13, 2026.
- National Faith Home Buyers. “Down Payment Assistance Program.” Accessed June 13, 2026.
- Michigan State Housing Development Authority, “MSHDA First-Generation DPA.” Accessed June 13, 2026.
- City of Detroit, “Detroit Neighborhood Initiative.” Accessed June 13, 2026.
- City of Detroit, “Detroit Down Payment Assistance Program.” Accessed June 13, 2026.
- City of Grand Rapids, “Homebuyer Assistance Fund.” Accessed June 13, 2026.
- Michigan State Housing Development Authority, “Mortgage Credit Certificate Program.” Accessed June 13, 2026.
- Michigan State Housing Development Authority, “Mortgage Credit Certificate (MCC).” Accessed June 13, 2026.
- U.S. Department of Housing and Urban Development, “Let FHA Loans Help You.” Accessed June 13, 2026.
- U.S. Department of Veterans Affairs, “VA Home Loans.” Accessed June 13, 2026.
- U.S. Department of Agriculture, “Eligibility.” Accessed June 13, 2026.
- Freddie Mac, “Home Possible.” Accessed June 13, 2026.
- Fannie Mae, “HomeReady Mortgage.” Accessed June 13, 2026.
- Fannie Mae, “97% Loan to Value Options.” Accessed June 13, 2026.
- U.S. Department of Housing and Urban Development, “About Good Neighbor Next Door.” Accessed June 13, 2026.
