Advertising disclosure: This article is published by Best Rate Loan LLC, a licensed Michigan mortgage broker (NMLS #2075205), and is advertising. It is not an independent review, ranking, or comparison, and it is not financial, tax, or legal advice. We have a financial interest in the products discussed. Information is general and for educational purposes only; it is not an offer of credit or a commitment to lend. Rates, programs and program terms change without notice.
Are you planning to buy your first ever home, and wondering if you qualify for a first-time homebuyer grant or Down Payment Assistance Program in Michigan? Well, the good news is you’ve come to the right place. Michigan is a state that does offer down payment assistance programs to help first-time home buyers purchase their first home and some programs can offer up to $10,000 to help you make your down payment.
We will explore the different types of down payment assistance programs for first-time homebuyers in Michigan.
What Are The Different Loan Programs Available in Michigan?
MSHDA (Michigan State Housing Housing Development Authority) Program
AFR Down Payment Grant Program
What is the MSHDA Loan?
Michigan State Housing Development Authority (MSHDA) offers first-time homebuyers up to $10,000 in down payment assistance. It is important to recognize that this is not a grant (which is NOT required to be repaid), it is a loan that MUST be repaid. The good news is that homeowners can defer to repaying the loan once they sell the house.
What are the Eligibility Requirements for MSHDA Loan?
- Minimum Credit Score – 640
- Income limits – The applicant must fall within income limits. These vary based on targeted and non-targeted areas.
- Maximum Home Sale Price – $566,355 statewide (after June 1, 2026)
- The maximum Debt to Income (DTI) ratio is 45%
- The maximum amount of income can be spent on housing expenses and long-term debt.
- Homebuyer Education Class
- Available to first-time homebuyers statewide and repeat buyers in targeted areas
- Collections and judgments do not necessarily need to be paid off
What options are there within the MHSDA program?
There are a few programs within the MSHDA but the most popular are:
MI Home Loans
MI Home Flex
MI Home Loans
MI home loan offers a 30-year mortgage to first-time homebuyers with a fixed interest rate from a participating broker. The program is funded through MSHDA bonds, which can help keep rates competitive.
You can also combine a MI Home Loan with your Michigan Down Payment Assistance However, if you wish to buy a multi-section home, the credit score requirement will be a little bit higher at 660. The only drawback of this loan is that all adults of the family must meet this eligibility criterion.
Additionally, some household limits may apply based on your family’s size and location of the property. MI home loans are suitable for first-time homebuyers with low or moderate income.
The rest of the eligibility criteria stay the same as the MI home loan program. However, if you borrow more than 95 percent of the property’s value, you will have to complete their homebuyer education course.
MI Home Flex
You can also use a MI home loan flex option with low interest rates and combine it with MSHDA down payment assistance. However, this particular first-time homebuyer loan in Michigan does not apply to all types of homes. Check current MSHDA program terms for assistance amounts
- Available to first-time and repeat homebuyers statewide.
- All adults in the household DO NOT need to apply. Only qualifying borrowers will be underwritten for credit, assets, and income.
- Collections and judgments DO NOT necessarily need to be paid off; the broker will follow their Automated Underwriting System findings.
- Income limits can vary depending on family size and property location.
- Purchase price limits apply; check MSHDA’s current limits.
- A minimum credit score of 660 required.
What is the AFR Down Payment Assistance Program?
The AFR down payment assistance program is another alternative to receive down payment assistance in Michigan. This program offers a 3.5% grant of the purchase price if you meet eligibility requirements.
As an independent mortgage broker, Best Rate Loan LLC works with multiple wholesale lenders, including AFR, to offer the best loan programs for our clients. If you are seeking a Down Payment Assistance grant we may have options for you!
What are the Eligibility Requirements for the AFR Down Payment Assistance grant?
- Minimum Credit Score – 620
- Income limits – Not considered unless you are using them to qualify.
- Maximum Home Sale Price – confirm current program limits
- Maximum LTV/CLTV/HCLTV – 96.5%
- Maximum Debt to Income (DTI) ration is 48.99%
- The maximum amount of income can be spent on housing expenses and long-term debt.
- Homebuyer Education Class
- Available to first-time home buyers and first responders.
- Property cannot be TBD.
- Collections and judgments do not necessarily need to be paid off
Although it is a great program it does have drawbacks. First, the interest rate for this program may be higher than for loans without assistance. However, they DO allow you to refinance after 6 months into a lower interest rate. The other thing to overcome is the property cannot be TBD. In such a tough market most buyers and agents are putting multiple offers regularly trying to win the bidding war. This creates a challenge because most people just need to be pre-approved and don’t have a set property.
Down payment assistance in Michigan
Several down payment assistance programs are available to eligible Michigan homebuyers, including
programs administered by the Michigan State Housing Development Authority (MSHDA) and programs
offered through individual lenders.
Program terms vary and change frequently. Depending on the specific program and the version in
effect when you apply, assistance may take the form of a second mortgage, a deferred-payment loan, a
forgivable loan, or a grant. Interest rates, repayment obligations, forgiveness conditions, income
and purchase-price limits, homebuyer education requirements, and occupancy covenants all differ by
program.
Important: Assistance that is described as forgivable or as a grant is usually conditional.
Forgiveness commonly requires that you occupy the home as your primary residence for a stated number
of years. If you sell, refinance, or move out before that period ends, you may be required to repay
some or all of the assistance.
Because these programs change, we do not publish specific rates, amounts, or repayment terms here.
Contact a licensed mortgage loan originator to review the programs currently available and confirm
the terms in effect for your situation, and review the program documents before you commit.
Program information last reviewed: Apr 8, 2026. Program terms are set by the administering agency or
lender, not by Best Rate Loan LLC, and are subject to change without notice.
Other Low-Down-Payment Loan Programs
The state of Michigan is trying to make homeownership a more achievable dream for its residence. However, apart from MSHDA, there are several federal loan programs (these are loans, not grants) that can help you become a homeowner:
- FHA loans – for first-time homebuyers without a strong credit score and/or sufficient savings
- VA loans – for eligible veterans, service members and surviving spouses
- USDA loans – for first-time homebuyers with low or moderate income and who are looking to live in a semi-rural or rural area
- Good Neighbor Next Door Program – for public servants without adequate saving to buy a typical home
- Fannie Mae/Freddie Mac low-down-payment programs such as HomeReady and Home Possible.
MCC Program Can Help
If you are a first-time homebuyer in Michigan, you must consider filing for an MCC, i.e., Mortgage Credit Certificate Program. This program allows you as a first-time homebuyer to claim 20 percent of your annual mortgage interest back as tax credit with your federal tax return.
An MCC can provide a dollar-for-dollar federal tax credit each year you keep the mortgage and live in the home, subject to IRS limits. Consult a tax professional. Combine this with your MSHDA loan, and you can really end up saving a substantial sum of money.
That said, always keep in mind that you will still have to meet HUD and MSHDA income criteria in order to qualify. The home must also be within MSHDA’s purchase price limits.
Can I Buy a House in Michigan With Little Money Down?
In some cases, you can even get a mortgage as a first-time homebuyer with zero percent down payments such as USDA or VA loans.
Things to Consider When Buying a Home in Michigan
As a first-time homebuyer in Michigan, here are some things you may want to consider.
- Do some research in the real estate market before picking a home
- Only use trusted Michigan-based real estate agents
- Use a Mortgage Broker or Loan Officer that is experienced in this area.
- Research into several financing options may help you save money and secure a good mortgage deal.
- Know your property taxes and stay complaint
- Do not forget the importance of adequate homeowners insurance, especially if your home location is in a flood-zone or with any other extreme weather conditions.
- Know the HOA rules
- Moreover, expect to pay the closing costs
A Professional Advisor Can Help
Before looking for into first-time homebuyer grant in Michigan, it would be wise to consider enlisting a professional advisor. A professional can help you understand which program may fit you and how your mortgage is going to impact your future financial status.
This article is general educational information, not advice, and not an offer of credit or a commitment to lend. Mortgage rates, loan programs, down payment assistance program terms, and tax rules change frequently, and the information here reflects our understanding as of the last review date shown above. Verify current program terms with a licensed mortgage loan originator before making a decision. Best Rate Loan LLC does not provide tax, legal or accounting advice.
