Borrower requirements:

• 3 percent down payment (down payment assistance available)

• 640 minimum credit score for MI Home Loan; 660 minimum credit score for MI Home Loan Flex or MI Home Loan for a manufactured home

• Must meet MSHDA income limits

• Must be borrowing MI Home Loan or MI Home Loan Flex

• Must have less than $20,000 in cash assets

• Must have 1 percent of home’s purchase price available

• Must complete homebuyer education course

Property requirements:

• Must be no more than $224,500

• Must be a single-family home or condominium; can also be a multiple-section manufactured home for MI Home Loan

• Must be no more than two acres (with some exceptions up to five acres) for MI Home Loan; no restriction for MI Home Loan Flex

Michigan down payment assistance

Michigan Down Payment (MDP)

The Michigan Down Payment (MDP) program is designed to make the initial sticker shock of buying a home more manageable with $7,500 of assistance to cover the down payment. There is also up to $10,000 available in specific zip codes. It’s important to note that these are not grants or forgivable loans; they’re second mortgages with no interest or monthly payments. You’ll need to pay back the MDP amount when the home is sold, or when you refinance or pay off the first mortgage in full.

The Michigan State Housing Development Authority (MSHDA) offers Down Payment Assistance (DPA) to help homebuyers purchase a home. It is a second mortgage that must be used in conjunction with MSHDA's MI First Home or MSHDA's MI Next Home first mortgage. Designed for low- to moderate-income homebuyers, depending on the home location and family size, this program requires the borrower to complete a homebuyer education class from an MSHDA approved agency or a HUD-approved agency, located in Michigan.

The DPA is a zero-interest, non-amortizing loan with no monthly payments; it is only due upon sale or transfer of the property or if the first mortgage is refinanced or paid in full.

Eligibility Requirements

One of the programs that MSHDA offers is the MI First Home Down Payment Assistance (DPA). The maximum DPA under this program is $7,500. To be an eligible borrower, the following criteria must be met:

• Applicants must complete a Homebuyer Education class.

• The program is available to first-time homebuyers statewide and repeat homebuyers in targeted areas.

• Applicants must have a minimum credit score of 640, OR 660 for multiple-section manufactured homes permanently affixed to a foundation, built after June 14, 1976, and taxed as real estate (not located in a rent/lease community).

• All adults in the household intending to occupy the residence must co-apply and credit qualify for the mortgage loan, excluding children who are verified to be full-time students.

One of the DPA programs offered by MSHDA is the MI Next Home Down Payment Assistance (DPA), and the program is designed specifically for repeat homebuyers. The assistance is provided with a zero-interest, non-amortizing loan with no monthly payments; it is only due upon sale or transfer of the property or if the first mortgage is refinanced or paid in full. The maximum DPA is the lesser of $7,500 or 4% of the sales price. 

Eligibility Requirements

To qualify for the MI Next Home DPA borrowers must meet the following requirements:

• Applicants must be repeat homebuyers statewide.

• A minimum credit score of 660 is required.

• Manufactured homes are not eligible under the program.

• All adults in the household need not apply; only qualifying borrowers (that are repeat homebuyers) will be underwritten for credit, assets, and income.

• Collections and judgments do not need to be paid off; lenders will follow their Automated Underwriting System findings.

• Borrowers must fall under the set income limits, which vary by family size and property location.

• The sales price of the property cannot exceed $224,500, statewide.

• Borrowers must complete a homebuyers education course.

• Repeat homebuyers from the following targeted areas can qualify for the MI First Home DPA: Alcona, Alger, Allegan, Alpena, Antrim, Arenac, Baraga, Barry, Benzie, Berrien, Branch, Cass, Charlevoix, Cheboygan, Chippewa, Clare, Delta, Emmet, Gogebic, Traverse, Gratiot, Houghton, Ingham, Iosco, Ionia, Iron, Kalamazoo, Keweenaw, Lapeer, Leelanau, Lenawee, Luce, Manistee, Marquette, Mason, Mecosta, Menominee, Missaukee, Montcalm, Montmorency, Newaygo, Oceana, Ogemaw, Ontonagon, Osceola, Otsego, Presque Isle, Roscommon, St. Clair, St. Joseph, Sanilac, Schoolcraft, Tuscola, Van Buren, Washtenaw, and Wexford.