Michigan first-time homebuyer programs

MI Home Loan program

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 $544,233.

Michigan First loans

Michigan First Mortgage partners with the Michigan State Housing Development Authority (MSHDA) to offer home loans with up to $7,500 in assistance that can be put toward a down payment or closing costs.

To qualify, you must have a minimum credit score of 640 and meet income limits based on the property's location and your household size. The maximum purchase price is $224,500, and the home must be a single-family residence you plan to occupy.

MSHDA Rate Relief Mortgage Program

As of publishing, the MSHDA Rate Relief Mortgage Program is currently paused due to funding exhaustion. While the program previously offered 30-year fixed-rate loans with interest rates reduced by up to one percentage point, the MSHDA Rate Relief Mortgage Program isn’t accepting new applications at this time. A waitlist is in place in case additional resources become available.

When active, the program helped first-time homebuyers in Michigan purchase single-family homes statewide. To qualify, applicants needed a minimum credit score of 640, an income at or below 80% of the area median income (AMI) and a home priced no higher than $224,500. Borrowers also had to work with an MSHDA-participating lender affiliated with the Federal Home Loan Bank of Indianapolis.

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 homebuyers in Michigan and Indiana who are purchasing a primary residence.

To qualify, your total household income must be no more than 120% of the local AMI. You must also meet one of the following eligibility pathways:

• Identify as Black, African American, Asian, Hispanic, American Indian, Alaska Native, Native Hawaiian or other Pacific Islander
• Be a first-generation homebuyer, which includes anyone whose parents or legal guardians have never owned a home in the United States, anyone who aged out of foster care or anyone who was legally emancipated

You must apply through a participating lender. The list of approved lenders will be released with the 2025 round of HomeBoost, launching July 9, 2025.

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.

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, up to $2,000 annually. 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. Most programs require borrowers to have a debt-to-income ratio of 41% to 45%.
• 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.

» MORE: Best mortgage lenders for first-time buyers

Additional resources for first-time homebuyers

Michigan first-time homebuyer programs aren’t your only option. Here are some additional resources available at a national level:

• 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: If you are buying a home in a rural area, you may want to reach out to a USDA lender to see if you qualify. USDA loans don’t require a down payment, but 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.