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2022 Michigan First-Time Homebuyer Programs

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To help Michigan residents become homeowners, the state offers first-time homebuyer programs that provide financial assistance to qualified borrowers. Because these programs come with qualification requirements surrounding factors such as where you live, credit scores, minimum occupancy periods and if/when you need to pay back any of this assistance, it’s important to understand the differences between these programs.

Keep reading to learn more about how these first-time homebuyer programs work.

Michigan statewide and local first-time homebuyer programs

First-time homebuyers in Michigan may be able to qualify for a statewide or local down payment assistance (DPA) program if they meet certain requirements such as location and income limits.

Program nameAssistance amountAssistance typeWhere it’s available
Michigan State Housing Development Authority (MSHDA) Down Payment AssistanceUp to $7,500Nonforgivable loanStatewide
MI Home Loan FlexUp to $7,500Nonforgivable loanStatewide
MI Home Loan (MSHDA Bond Program)Up to $7,500Nonforgivable loanStatewide
Mortgage Credit Certificate Program20% of annual mortgage interest paid against year-end tax liability with a maximum credit of $2,000 a yearTax credit for up to 30 yearsStatewide

What to know about different types of down payment assistance

All down payment assistance programs provide different amounts of aid in varying formats, and they all have unique application requirements. That being said, most programs do follow some similar structures. You’re most likely to encounter first-time homebuyer programs structured as grants or mortgages.


Grant-based first-time homebuyer programs give you money to put toward your down payment or closing costs and don’t require you to repay that money. Grant programs tend to be offered on a state or local municipality level. To qualify for these types of grants, you usually have to obtain a mortgage first. It’s worth noting that these grant programs can come with higher interest rates.

Second mortgages

You may also encounter homebuying aid in the form of a “second mortgage.” To qualify for this type of aid, you need to first secure a regular mortgage, which will be referred to as your “first mortgage.” The second mortgage, which is what offers the down payment assistance, acts as a lien on your property. You may need to repay this second mortgage while you work on paying off your first mortgage, or the second mortgage may be completely forgiven after you live in the home for a set time period.

How Michigan first-time homebuyer programs work

All first-time homebuyer programs will have their own application process, but you can generally expect to encounter the following steps when you apply for one.

  1. Meet all program requirements. You will need to meet all of the program’s eligibility requirements such as income limits, credit score and recent homeownership. Before you apply for one of these programs, make sure you meet all eligibility requirements so you don’t waste time applying for assistance you won’t qualify for.
  2. Buy in an eligible area. While there are generally both statewide and more local programs to choose from, you have to buy a home in an eligible area for the specific first-time homebuyer program you’re applying to. You may be able to buy anywhere within the state, or the program may only apply to select cities, communities or counties.
  3. Confirm length of ownership restrictions. Some first-time homebuyer programs require recipients to own the home for a certain number of years to reap the full financial benefits of the program. If you choose to sell the home before the ownership period ends, you may have to repay some or all of the financial aid.
  4. Obtain homeownership counseling or education. Many of these programs will require that you attend homeownership counseling or pursue education about the responsibilities and potential costs of homeownership.

Michigan first-time homebuyer program requirements

You can spend a lot of time applying for first-time homebuyer programs, so it’s helpful to pay close attention to their requirements so you don’t waste time applying for a program that isn’t a good fit for you.

These are some examples of requirements for popular Michigan first-time homebuyer programs.

Program name Credit score minimumDebt-to-income (DTI) ratio maximumMaximum income limitHow long you have to live in home
Michigan State Housing Development Authority (MSHDA) Down Payment Assistance64045%Household income limits vary by locationN/A
MI Home Loan Flex640 or 66045%$74,000-$142,380N/A
MI Home Loan (MSHDA Bond Program)640 or 66045%$74,000-$142,380N/A
Mortgage Credit Certificate ProgramN/AN/AHousehold income limits can vary by location, property and family sizeN/A


First-time homebuyer programs usually have income restrictions, so it’s important to identify the programs that your income excludes you from before you apply for one. While some programs will list an exact dollar amount that your income can’t exceed, others have less clear-cut requirements based on how much you make compared to local average income limits for your household size. You can learn more about Michigan’s current income limits by visiting the U.S. Department of Housing and Urban Development (HUD) website and entering your state and county information.

National first-time homebuyer programs

Statewide or local first-time homebuyer programs aren’t your only options for financial support. There are also nationwide programs designed to help first-time buyers. To qualify for one of the Michigan programs previously mentioned, first-time buyers may need to also qualify for one of the programs listed below. However, these loans aren’t exclusive to first-time homebuyers, so they are more flexible in that sense.

Conventional loans. Conventional loans generally come from private lenders, require high credit scores and offer larger loan amounts than government-backed loans. Typically, you must have a 620 credit score to qualify for a conventional mortgage loan.

FHA loans. The Federal Housing Administration (FHA) backs FHA loans, and they can be a good fit for first-time homebuyers whose income levels limit their conventional financing options. You must provide proof of stable income over the past two years to qualify for an FHA loan.

VA loans. Active-duty and veteran service members can qualify for a VA loan from the U.S. Department of Veterans Affairs (VA) in order to buy up to a four-unit dwelling to be used as a primary residence. With a VA loan, no down payment or private mortgage insurance (PMI) is required.

USDA loans. Another type of government loan, USDA loans are guaranteed by the U.S. Department of Agriculture (USDA). These loans are designed for homes in rural areas and don’t require a down payment or PMI.

FAQs about Michigan’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in Michigan?

Typically, someone who hasn’t owned a home in the three years prior to the date of purchase is seen as a first-time homebuyer. Many programs follow these standards, but it’s worth confirming how each program you want to apply for evaluates first-time buyers.

Can I qualify for down payment assistance in Michigan?

If you meet all of the program requirements (income, location of home, etc.) of a first-time homebuyer program that you want to apply for, then it’s quite possible to qualify for down payment assistance in the state of Michigan.

How much of a down payment do I need to buy a house in Michigan?

Every program will have different down payment requirements. For example, with a VA loan, you don’t need to make a down payment, whereas with an FHA loan, you need to make a down payment of at least 3.5%.

Home price trends in Michigan’s major areas

According to data from the National Association of Realtors (NAR), home prices are on the rise in Michigan counties. For example, from the second quarter of 2020 to the second quarter of 2021, in Gladwin County, the monthly mortgage payment went from $446 to $479. Oakland County saw a similar rise from $1,077 to $1,151.


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