First-Time Homebuyer
Programs in Michigan.
Your first home doesn't have to start with knowing all the answers.
Michigan homebuyers may have access to several financing and assistance options — including FHA, Conventional, MSHDA, VA, USDA and down payment assistance programs.
The key is understanding which options may apply to your situation, what they actually cost, and how they fit into your overall home-buying plan.
“First-time buyer” doesn't always mean your first home ever.
This is one of the most important things to understand before assuming you do — or don't — qualify for a particular homebuyer program.
“We owned a home before, so we aren't first-time buyers.”
Not necessarily.
Different mortgage and assistance programs can use different definitions and eligibility requirements. For some programs, a buyer may be considered a first-time homebuyer if they have not owned a principal residence during a specified period of time.
That means someone who owned a home years ago may still qualify as a first-time buyer under certain programs.
First-time status is only one piece of eligibility.
Some assistance and homebuyer programs have household or borrower income limits.
The home itself, purchase price and location can affect eligibility for certain programs.
Credit, debt, income, assets and the selected loan program are reviewed by the lender.
Homebuyer education, occupancy requirements and other conditions may apply depending on the program.
Don't disqualify yourself based on something you heard years ago or read online. Start by understanding which programs are currently available and then have a qualified lender evaluate your individual eligibility.
First-time buyers have more than one path home.
“First-time homebuyer program” isn't one specific type of mortgage. Depending on eligibility, buyers may consider several financing and assistance options.
Here's a starting point for understanding some of the programs Michigan homebuyers may encounter.
MSHDA
The Michigan State Housing Development Authority offers homeownership programs for eligible Michigan buyers, including the MI Home Loan and access to qualifying down payment assistance.
MI 10K DPA
Eligible buyers using the MI Home Loan may have access to up to $10,000 in down payment assistance that can help with down payment, closing costs and eligible prepaid expenses.
FHA Loans
FHA financing can provide eligible buyers with a lower-down-payment option and may offer more flexible qualification guidelines than some conventional financing.
Conventional
Conventional financing offers several loan structures, including certain low-down-payment options for eligible borrowers. A 20% down payment is not always required.
VA Home Loans
VA-backed purchase loans can provide significant financing advantages for eligible veterans, service members and certain surviving spouses.
USDA Loans
USDA financing can provide an additional path to homeownership for qualifying households purchasing eligible properties in approved areas.
The program requiring the least cash upfront isn't automatically the best financing strategy.
Compare the complete picture: estimated monthly payment, mortgage insurance, cash needed to close, program requirements, property eligibility and long-term costs.
Compare Financing Options →Loan and assistance programs are subject to eligibility, lender requirements, funding availability and program changes. Current terms and qualification should be confirmed with the appropriate program administrator and a qualified participating lender.
Do you really need 20% down?
No. A 20% down payment can make sense in some situations, but it is not a universal requirement for purchasing a home.
“We need to save 20% before we can buy a house.”
There are multiple ways to structure a home purchase.
Depending on the loan program and buyer's eligibility, financing may be available with significantly less than 20% down.
Certain conventional loans offer low-down-payment options. FHA financing has its own minimum-investment requirements, while eligible VA and USDA borrowers may have access to financing that does not require a down payment.
Michigan buyers may also have access to qualifying down payment assistance programs that can reduce some of the cash needed upfront.
Your financing may look different from someone else's.
These are examples of common financing structures, not recommendations or guarantees of qualification.
Certain conventional programs may allow qualifying buyers to purchase with as little as 3% down. Eligibility and mortgage-insurance requirements vary.
Explore Conventional →FHA financing may allow eligible borrowers to purchase with a 3.5% minimum down payment when applicable FHA requirements are satisfied.
Explore FHA →Eligible VA borrowers may be able to finance a qualifying home without making a down payment, subject to VA and lender requirements.
Explore VA →USDA Rural Development financing may offer no-down-payment financing for qualifying households purchasing eligible properties.
Explore USDA →That doesn't mean putting 20% down is bad.
A larger down payment may reduce the amount borrowed and can affect the monthly payment and overall financing structure. With certain conventional loans, reaching the applicable equity threshold can also eliminate the need for private mortgage insurance.
But using a large portion of your available savings for the down payment can leave less cash available after closing.
The down payment is only one number.
Cash to Close
Consider the down payment along with closing costs, prepaid expenses and other purchase-related costs.
Monthly Payment
Compare the complete estimated housing payment, not simply the amount being financed.
Emergency Savings
Homeownership comes with expenses after closing. Maintaining appropriate reserves should be part of the planning conversation.
Future Home Expenses
Moving, furnishings, maintenance and repairs can create additional expenses during the first year of ownership.
The down payment can look very different depending on the financing.
Down-payment illustration only. This does not include closing costs, prepaid expenses, mortgage insurance, lender requirements or other transaction costs and does not represent a loan offer.
Don't wait to have 20% saved before learning what may be possible. Start with the numbers, understand the financing options available to you, and then decide how much cash you are comfortable investing into the purchase.
How much money do we actually need to buy a home?
The down payment gets most of the attention, but it isn't the only expense buyers should prepare for. A stronger home-buying plan looks at the entire transaction — from the offer through closing and beyond.
“Cash to close” is not the same thing as your down payment.
Your down payment is one component of the purchase. Depending on the transaction, buyers may also need funds for earnest money, inspections, an appraisal, closing costs, prepaid expenses and other costs.
Some of these amounts may ultimately be credited or accounted for at closing, while others are expenses paid during the process.
That's why we prefer to build the financial plan before buyers start making offers.
Home-buying expenses happen at different points in the process.
Earnest Money Deposit
Earnest money is a deposit made in connection with the purchase agreement and demonstrates the buyer's commitment to the transaction.
The amount, timing, handling and potential return of earnest money depend on the purchase agreement and circumstances of the transaction.
Home Inspection
Buyers may choose to hire qualified inspectors to evaluate the property during the applicable due-diligence period.
Inspection scope and pricing vary based on the property and services selected.
Appraisal
When financing is involved, the lender may require an appraisal as part of evaluating the property for the mortgage.
Payment timing and appraisal costs vary by lender, loan program and property.
Down Payment
Your down payment is the portion of the purchase price funded according to your financing structure rather than financed through the primary mortgage.
The required amount varies considerably by loan program, eligibility and financing strategy.
Closing Costs
A financed purchase can include lender charges, title-related expenses and other costs associated with completing the transaction.
Your lender provides disclosures showing the estimated financing and closing costs associated with your specific loan.
Prepaid & Escrow Expenses
Depending on the financing and transaction, buyers may need funds for items such as homeowners insurance, property taxes, prepaid interest and initial escrow funding.
Homeownership Reserves
Closing day shouldn't necessarily leave the bank account at zero. Moving costs, maintenance, repairs and unexpected expenses can begin shortly after becoming a homeowner.
Don't ask only, “What's the down payment?”
Ask what the complete purchase may require.
Not every dollar necessarily has to come from your savings.
Down Payment Assistance
Eligible buyers may have access to assistance programs that can help with certain permitted purchase costs.
Explore Assistance →Seller Concessions
Depending on the offer, market conditions and financing rules, a purchase agreement may include negotiated seller concessions toward certain allowable buyer costs.
Lender Programs
Some lenders may offer qualifying programs, credits or other financing options. Availability and terms vary and should be reviewed directly with the lender.
We don't want buyers simply asking, “What's the most expensive home we can qualify for?” We want to understand the estimated cash needed, monthly payment and costs of ownership so the home fits the plan — not just the preapproval.
Build the financial plan before we build the home search.
We can help you understand the buying process and coordinate with a qualified lender to evaluate the financing options available to you.
Your first home doesn't start with a showing. It starts with a plan.
Buying your first home involves a lot of moving pieces, but you don't need to figure them all out at once. A clear process helps you understand what happens next, who is responsible for what, and which decisions actually need your attention.
Education first.
Decisions second.
Our goal isn't to rush you into a home. It's to help you understand your options, establish a comfortable financial plan and make informed decisions throughout the purchase.
Here's what the journey typically looks like.
Define Your Goals
Before talking about bedrooms, neighborhoods or countertops, we start with the bigger picture: why you want to buy, your timing, priorities and what you want homeownership to accomplish.
Financing Conversation
A qualified lender can review your financial information and explain financing options, estimated payments, cash requirements and programs that may be available based on your individual situation.
Get Preapproved
Once the lender has reviewed the required financial information, a preapproval can help establish the financing parameters for your home search.
But the maximum amount available isn't automatically the amount you should spend. We also want to consider the estimated monthly payment and your comfort level.
Buyer Consultation
Before the home search begins, we'll walk through the buying process, agency relationships, your priorities, market conditions, offer strategy and what to expect once you find the right property.
Find the Right Home
Now we can focus the search around the homes, locations and features that align with your priorities and financial plan.
As we tour properties, we'll help you evaluate more than appearance — including resale considerations, market context and factors that could affect your purchase.
Write & Negotiate the Offer
When you're ready to pursue a home, we'll review available property and market information, discuss the terms that matter to you and prepare an offer based on your objectives.
Inspections & Property Review
Depending on the purchase agreement, buyers may have an opportunity to conduct inspections and other permitted due diligence after an offer is accepted.
We'll help you understand the contractual timeline and your options while qualified inspectors and other appropriate professionals evaluate the property.
Loan Processing & Appraisal
While the transaction moves forward, your lender works through the mortgage process. Depending on the financing, this can include underwriting, verification of information and an appraisal.
Prepare for Closing
As closing approaches, we'll help keep the transaction organized while you coordinate final lender requirements, insurance, closing funds and other necessary preparations.
You'll also typically have an opportunity for a final walkthrough before closing, subject to the terms of the purchase agreement.
Sign. Close. Welcome Home.
At closing, the required documents are completed and the transaction moves through its final steps. Possession and access to the property occur according to the terms of the purchase agreement.
Your purchase involves a team of professionals.
Different professionals have different responsibilities throughout the transaction. Part of our role is helping you understand who handles what and keeping communication moving.
Strategy, property search, contracts, negotiation and transaction guidance.
Financing, qualification, loan disclosures, underwriting and mortgage approval.
Independent evaluation of the property within the scope of the inspection selected.
Title and closing professionals help complete applicable title and settlement functions.
You don't need to be ready to buy tomorrow to start building the plan today.
If homeownership is something you're considering, understanding your current position can help you determine whether your timeline is measured in weeks, months or longer — and what steps make sense next.
Let's map out your path to homeownership.
No house hunting required. Start by understanding the process, your goals and the next step that makes sense for you.
What does it actually take to qualify?
Mortgage approval isn't based on one number. Lenders evaluate several pieces of your financial picture together to determine which financing options may be available.
Credit matters.
But credit isn't the whole story.
Buyers sometimes assume a credit score alone determines whether they can purchase a home. In reality, mortgage qualification generally involves reviewing multiple financial factors together.
Income, debts, assets, credit history, loan type and the property itself can all play a role in the mortgage process.
Six pieces of the financial picture.
Exact underwriting requirements vary by loan program, lender and borrower circumstances.
Credit Profile
A lender may review your credit scores, payment history, outstanding accounts and other information contained in your credit report.
Income
Lenders evaluate qualifying income and typically require documentation supporting the income being used for mortgage qualification.
Employment & Income History
The lender may evaluate the history and stability of the income being used to qualify for the mortgage.
Debt-to-Income
Lenders consider qualifying monthly debt obligations in relation to qualifying income when evaluating the proposed mortgage.
Funds & Assets
Depending on the financing, lenders may verify funds needed for the transaction and review applicable bank, investment or other asset documentation.
The Home
Mortgage approval isn't only about the borrower. The property may also need to satisfy requirements associated with the selected financing.
Don't let a credit-score assumption stop the conversation.
There isn't one universal credit-score requirement that applies to every mortgage. Requirements can differ based on the financing program, lender and other factors in the loan file.
If your credit needs improvement, understanding where you stand today can give you a clearer starting point and help you build a plan before purchasing.
What is debt-to-income ratio?
This is a simplified educational illustration. Mortgage underwriting determines which obligations, income and calculations apply to a specific borrower.
EMPLOYED?
Owning a business doesn't automatically prevent you from getting a mortgage.
Self-employed borrowers may need different or additional documentation because lenders must determine the income that can be used for qualification.
If you're self-employed, speaking with a lender earlier can be especially valuable. It gives you time to understand documentation requirements before you're trying to purchase a specific home.
Keep your financial picture as consistent as possible.
Before making a significant financial change during the home-buying process, talk with your lender about whether it could affect your mortgage.
Avoid assuming a new credit account won't matter simply because you've already been preapproved.
Financing a vehicle, furniture or another large purchase can change your financial profile.
Discuss significant employment or income changes with your lender during the mortgage process.
Before making unusual transfers or deposits, ask your lender what documentation may be required.
What you can qualify for isn't necessarily what you should spend.
A mortgage preapproval helps establish financing parameters. Your personal housing budget should also consider the estimated payment, utilities, maintenance, savings goals and other financial priorities.
The goal isn't simply to reach the highest possible purchase price. It's to find a home and payment that fit the larger financial plan.
You don't have to diagnose your own mortgage qualification before asking questions. A conversation with a qualified lender can help determine where you stand, which options may be available and what — if anything — you may want to work on before buying.
Find out where you stand before deciding you're not ready.
We'll help you understand the buying process and can coordinate the next steps with a qualified mortgage professional when you're ready.
You have questions.
Let's get you some answers.
Buying your first home comes with a new vocabulary, unfamiliar decisions and plenty of questions. Here are straightforward answers to some of the questions Michigan first-time homebuyers ask most often.
01 Do I need 20% down to buy my first home?
No. A 20% down payment is not a universal requirement. Depending on the loan program and your eligibility, financing may be available with a significantly smaller down payment.
Certain conventional programs may offer low-down-payment options, FHA financing has its own minimum-investment requirements, and eligible VA or USDA borrowers may have access to financing that does not require a down payment.
Explore Michigan Financing Options →02 What credit score do I need to buy a house?
There isn't one credit score that applies to every mortgage. Credit requirements can vary based on the loan program, lender, underwriting and the rest of the borrower's financial profile.
Rather than assuming your score is too low, speaking with a qualified mortgage professional can help you understand where you currently stand and whether there are steps worth taking before purchasing.
03 Can I buy a home if I have student loans?
Having student loans does not automatically prevent someone from qualifying for a mortgage.
Student-loan obligations may be considered as part of the lender's debt-to-income and underwriting calculations. The treatment of those obligations can depend on the financing program and your individual circumstances.
04 What is MSHDA and can it help me buy a home?
The Michigan State Housing Development Authority, commonly called MSHDA, offers homeownership programs designed to assist eligible Michigan homebuyers.
Program availability, income limits, purchase-price limits, property requirements and borrower eligibility can change. A participating lender can determine whether a current MSHDA program may fit your situation.
Learn About MSHDA →05 Do I have to be a first-time buyer to receive down payment assistance?
Not necessarily. Assistance programs have their own eligibility requirements, and some may be available to buyers who do not meet the traditional definition of a first-time homebuyer.
The important question is not simply whether you have owned a home before, but which current programs you may qualify for.
Explore Down Payment Assistance →06 Can the seller help pay my closing costs?
A purchase agreement can sometimes include negotiated seller concessions toward certain allowable buyer costs.
Whether that strategy makes sense depends on the property, offer, market conditions and applicable financing requirements. Seller concessions are negotiated terms — they are not automatically available or guaranteed.
07 How much are closing costs?
Closing costs vary based on the mortgage, lender, property, purchase price and transaction.
They can include lender-related charges, title and settlement expenses and other transaction costs. Buyers may also have prepaid expenses such as homeowners insurance, taxes, prepaid interest or initial escrow funding.
Your lender will provide disclosures outlining the estimated costs associated with your specific loan.
08 Should I get preapproved before looking at homes?
We recommend establishing the financing plan before beginning an active home search.
A preapproval can help you understand the financing parameters, estimated payment and potential cash requirements before you become emotionally invested in a particular property.
It can also allow you to move more efficiently when you find a home you want to pursue.
09 How long does it take to buy a home?
There isn't one standard timeline. Some buyers are financially prepared and find the right property quickly, while others spend months preparing or searching.
Once a purchase agreement is accepted, the closing timeline depends on the contract, financing, inspections, appraisal, title work and other transaction requirements.
Starting early gives you time to understand the process without feeling pressured to make decisions.
10 What if I'm not ready to buy yet?
That's completely fine. Learning about the process does not obligate you to purchase a home.
In fact, starting before you're ready to make an offer can be helpful. You can identify potential financing issues, establish a savings target, understand your budget and build a realistic homeownership timeline.
11 Can I buy a home if I'm self-employed?
Yes, self-employed borrowers can qualify for home financing. The documentation and income calculations may differ from those used for a salaried employee.
Speaking with a lender early can help you understand which financial documents may be required and how qualifying income may be evaluated.
12 Do I need a real estate agent when buying my first home?
Buyers can benefit from professional representation when navigating property searches, market information, contracts, negotiations, inspections, deadlines and the many decisions involved in a purchase.
Before providing certain real estate services, a written buyer agreement may be required. We review agency relationships, services and compensation with buyers before they commit so they can make an informed decision about representation.
That's exactly what the buyer consultation is for.
You don't need to understand mortgages, contracts or the entire buying process before contacting us. Bring your questions. We'll help you organize the next steps.
Questions today.
A clearer plan tomorrow.
Whether you're hoping to buy soon or simply trying to understand what it will take, we'll help you determine the next step that makes sense.
You have questions.
Let's get you some answers.
Buying your first home comes with a new vocabulary, unfamiliar decisions and plenty of questions. Here are straightforward answers to some of the questions Michigan first-time homebuyers ask most often.
01 Do I need 20% down to buy my first home?
No. A 20% down payment is not a universal requirement. Depending on the loan program and your eligibility, financing may be available with a significantly smaller down payment.
Certain conventional programs may offer low-down-payment options, FHA financing has its own minimum-investment requirements, and eligible VA or USDA borrowers may have access to financing that does not require a down payment.
Explore Michigan Financing Options →02 What credit score do I need to buy a house?
There isn't one credit score that applies to every mortgage. Credit requirements can vary based on the loan program, lender, underwriting and the rest of the borrower's financial profile.
Rather than assuming your score is too low, speaking with a qualified mortgage professional can help you understand where you currently stand and whether there are steps worth taking before purchasing.
03 Can I buy a home if I have student loans?
Having student loans does not automatically prevent someone from qualifying for a mortgage.
Student-loan obligations may be considered as part of the lender's debt-to-income and underwriting calculations. The treatment of those obligations can depend on the financing program and your individual circumstances.
04 What is MSHDA and can it help me buy a home?
The Michigan State Housing Development Authority, commonly called MSHDA, offers homeownership programs designed to assist eligible Michigan homebuyers.
Program availability, income limits, purchase-price limits, property requirements and borrower eligibility can change. A participating lender can determine whether a current MSHDA program may fit your situation.
Learn About MSHDA →05 Do I have to be a first-time buyer to receive down payment assistance?
Not necessarily. Assistance programs have their own eligibility requirements, and some may be available to buyers who do not meet the traditional definition of a first-time homebuyer.
The important question is not simply whether you have owned a home before, but which current programs you may qualify for.
Explore Down Payment Assistance →06 Can the seller help pay my closing costs?
A purchase agreement can sometimes include negotiated seller concessions toward certain allowable buyer costs.
Whether that strategy makes sense depends on the property, offer, market conditions and applicable financing requirements. Seller concessions are negotiated terms — they are not automatically available or guaranteed.
07 How much are closing costs?
Closing costs vary based on the mortgage, lender, property, purchase price and transaction.
They can include lender-related charges, title and settlement expenses and other transaction costs. Buyers may also have prepaid expenses such as homeowners insurance, taxes, prepaid interest or initial escrow funding.
Your lender will provide disclosures outlining the estimated costs associated with your specific loan.
08 Should I get preapproved before looking at homes?
We recommend establishing the financing plan before beginning an active home search.
A preapproval can help you understand the financing parameters, estimated payment and potential cash requirements before you become emotionally invested in a particular property.
It can also allow you to move more efficiently when you find a home you want to pursue.
09 How long does it take to buy a home?
There isn't one standard timeline. Some buyers are financially prepared and find the right property quickly, while others spend months preparing or searching.
Once a purchase agreement is accepted, the closing timeline depends on the contract, financing, inspections, appraisal, title work and other transaction requirements.
Starting early gives you time to understand the process without feeling pressured to make decisions.
10 What if I'm not ready to buy yet?
That's completely fine. Learning about the process does not obligate you to purchase a home.
In fact, starting before you're ready to make an offer can be helpful. You can identify potential financing issues, establish a savings target, understand your budget and build a realistic homeownership timeline.
11 Can I buy a home if I'm self-employed?
Yes, self-employed borrowers can qualify for home financing. The documentation and income calculations may differ from those used for a salaried employee.
Speaking with a lender early can help you understand which financial documents may be required and how qualifying income may be evaluated.
12 Do I need a real estate agent when buying my first home?
Buyers can benefit from professional representation when navigating property searches, market information, contracts, negotiations, inspections, deadlines and the many decisions involved in a purchase.
Before providing certain real estate services, a written buyer agreement may be required. We review agency relationships, services and compensation with buyers before they commit so they can make an informed decision about representation.
That's exactly what the buyer consultation is for.
You don't need to understand mortgages, contracts or the entire buying process before contacting us. Bring your questions. We'll help you organize the next steps.
Questions today.
A clearer plan tomorrow.
Whether you're hoping to buy soon or simply trying to understand what it will take, we'll help you determine the next step that makes sense.
You don't need to have it all figured out before you start.
Whether you're ready to buy soon or you're still trying to understand what homeownership could look like, the next step is simply building a plan around your goals, timeline and financial comfort level.
Let's build your homeownership plan.
Tell us a little about where you are in the process. We'll use that information to help determine the most useful next step — whether that's learning about financing, preparing for a future purchase or beginning an active home search.
Sometimes the best first step is simply figuring out what needs to happen before you're ready.
Where are you right now?
A few quick questions will help us point you in the right direction.
Real guidance.
Real answers.
Before the transaction.
Buying your first home is a major financial and personal decision. Our role is to help you understand the real estate process, evaluate your options and make informed decisions at your own pace.