Buying a home may require less upfront cash than you think.
Michigan homebuyers may have access to programs designed to help with some of the upfront costs of purchasing a home. The key is understanding which programs are currently available, how they work and whether you may qualify.
Clear guidance before you start looking at homes.
What is down payment assistance?
Down payment assistance generally refers to programs that can help eligible homebuyers with certain upfront costs associated with purchasing a home.
Depending on the program, assistance may have specific eligibility rules, approved uses and repayment terms. It should be evaluated as part of the overall financing plan — not simply by the amount of assistance offered.
More than one option may exist.
Michigan buyers may encounter state, local or other homebuyer-assistance programs. Availability and requirements can differ significantly.
Eligibility isn't automatic.
Income, financing, property, purchase price, homebuyer education and other requirements may apply depending on the program.
Assistance is only one piece.
A strong home-buying plan also considers the mortgage, estimated monthly payment, closing costs, cash reserves and the terms of the assistance itself.
Don't start with: “How much assistance can I get?”
Start with: “What is the smartest way for me to buy?”
What exactly is MSHDA?
MSHDA stands for the Michigan State Housing Development Authority. It administers housing and homeownership programs in Michigan, including programs that may help eligible buyers overcome some of the upfront financial barriers to purchasing a home.
Think of it as a financing system, not a bag of free money.
When people hear “down payment assistance,” it's easy to imagine a check being handed to the buyer. That's generally not how the process works.
A homebuyer typically works with an approved or participating mortgage lender. The lender evaluates the buyer, determines applicable financing options and handles the mortgage process according to the requirements of the program being used.
There are several players in a MSHDA-assisted purchase.
Understanding who does what makes the process much easier to navigate.
MSHDA
MSHDA establishes and administers applicable homeownership-program requirements and assistance options for eligible Michigan buyers.
Mortgage Lender
A participating lender reviews your financial information, explains applicable loan and assistance options and manages the mortgage-approval process.
You
The buyer must satisfy the applicable mortgage and assistance-program requirements and provide the documentation needed during the process.
Avila Home Group
We help you navigate the real estate side of the purchase — from planning and property search through offer strategy, negotiations, contractual deadlines and closing.
What does the process generally look like?
Review your financial picture and discuss financing and assistance programs that may apply to your situation.
The lender reviews applicable borrower, financing and program requirements.
Understand your estimated payment, upfront cash needs and realistic purchase parameters.
Search for properties that align with your financing, program requirements and goals.
You'll generally work through a participating lender.
Your mortgage professional is an important part of the process because the lender evaluates qualification, applicable financing and program requirements.
The mortgage and the assistance are related — but they're not the same thing.
Your Mortgage
This is the financing used to purchase the home. The loan type, terms, interest rate, payment and qualification requirements are part of your overall mortgage structure.
Down Payment Assistance
When available and applicable, assistance may help an eligible buyer with certain permitted upfront costs, subject to the program's requirements and terms.
Your Financing Plan
The goal is to understand how the mortgage, assistance, cash requirements and monthly payment work together before making an offer.
Program availability and requirements can change.
MSHDA programs can have specific borrower, income, property, purchase-price, education, financing and other requirements. Current eligibility should be confirmed with an approved participating lender before relying on assistance as part of a purchase.
So who may actually qualify?
That's where income, household circumstances, financing, property requirements and other program guidelines begin to matter.
Explore Eligibility ↓Who may qualify for MSHDA assistance?
Qualification isn't determined by one number or one question. The applicable MSHDA program, your mortgage, household and financial circumstances, and the property being purchased can all affect eligibility.
Don't try to qualify yourself from a checklist.
Homebuyer programs have detailed requirements, and those requirements can change. A buyer who assumes they make too much, have owned a home before or don't have enough saved could potentially overlook an option worth exploring.
The better approach is to review the current program requirements with a participating lender and determine which financing structure, if any, fits your situation.
Eligibility can involve several moving pieces.
These are some of the areas a participating lender may need to evaluate when determining whether a particular MSHDA program may be available to you.
Household & Program Income
Applicable programs may have income limits or calculations that must be reviewed as part of determining eligibility.
Mortgage Qualification
Assistance does not replace mortgage qualification. Buyers still need to satisfy the requirements of their applicable mortgage financing.
The Home You're Purchasing
The property itself may need to meet applicable program and mortgage requirements in addition to fitting within the buyer's financing plan.
Purchase-Price Requirements
Some homeownership programs may establish limits or other requirements related to the purchase price of the property.
Homebuyer Education
Homebuyer education or counseling requirements may apply depending on the program and buyer's circumstances.
Additional Requirements
Individual programs may have additional borrower, occupancy, property, documentation or financing requirements that must be satisfied.
“Do I have to be a first-time homebuyer?”
Don't automatically rule yourself out simply because you've owned a home before.
The definition of a first-time homebuyer and whether first-time-buyer status is required can depend on the specific program and circumstances. Some programs or program features may have different eligibility rules.
A participating lender can review the current requirements and determine whether your previous homeownership affects the options available to you.
Assistance eligibility does not automatically mean mortgage approval.
Assistance Eligibility
Are the applicable requirements of the assistance program satisfied?
Mortgage Qualification
Does the borrower satisfy the lender and mortgage program's applicable underwriting requirements?
Eligible Home
Does the property satisfy the applicable financing and program requirements?
A workable purchase plan.
Four assumptions worth checking first.
“I probably make too much money.”
Verify the current income requirements.“I've owned a home before, so I can't qualify.”
Previous ownership doesn't answer every eligibility question.“I don't have a huge down payment saved.”
Explore financing and assistance before determining the cash required.“If I qualify for assistance, I can buy any house.”
The property and financing still matter.Get the facts before building your home search around an assumption.
Before choosing a price range or relying on assistance to cover certain upfront costs, have the financing reviewed.
A website can't determine whether you qualify.
Program availability, limits and requirements are subject to change. Mortgage approval and program eligibility depend on the applicable lender, financing program, assistance program and the buyer's individual circumstances. Current requirements should be confirmed with an approved participating lender.
If you qualify, how much help could actually be available?
Next we'll break down how Michigan down payment assistance can be structured, what the money may be used for and why the repayment terms matter.
How Down Payment Assistance Works ↓Who may qualify for MSHDA assistance?
Qualification isn't determined by one number or one question. The applicable MSHDA program, your mortgage, household and financial circumstances, and the property being purchased can all affect eligibility.
Don't try to qualify yourself from a checklist.
Homebuyer programs have detailed requirements, and those requirements can change. A buyer who assumes they make too much, have owned a home before or don't have enough saved could potentially overlook an option worth exploring.
The better approach is to review the current program requirements with a participating lender and determine which financing structure, if any, fits your situation.
Eligibility can involve several moving pieces.
These are some of the areas a participating lender may need to evaluate when determining whether a particular MSHDA program may be available to you.
Household & Program Income
Applicable programs may have income limits or calculations that must be reviewed as part of determining eligibility.
Mortgage Qualification
Assistance does not replace mortgage qualification. Buyers still need to satisfy the requirements of their applicable mortgage financing.
The Home You're Purchasing
The property itself may need to meet applicable program and mortgage requirements in addition to fitting within the buyer's financing plan.
Purchase-Price Requirements
Some homeownership programs may establish limits or other requirements related to the purchase price of the property.
Homebuyer Education
Homebuyer education or counseling requirements may apply depending on the program and buyer's circumstances.
Additional Requirements
Individual programs may have additional borrower, occupancy, property, documentation or financing requirements that must be satisfied.
“Do I have to be a first-time homebuyer?”
Don't automatically rule yourself out simply because you've owned a home before.
The definition of a first-time homebuyer and whether first-time-buyer status is required can depend on the specific program and circumstances. Some programs or program features may have different eligibility rules.
A participating lender can review the current requirements and determine whether your previous homeownership affects the options available to you.
Assistance eligibility does not automatically mean mortgage approval.
Assistance Eligibility
Are the applicable requirements of the assistance program satisfied?
Mortgage Qualification
Does the borrower satisfy the lender and mortgage program's applicable underwriting requirements?
Eligible Home
Does the property satisfy the applicable financing and program requirements?
A workable purchase plan.
Four assumptions worth checking first.
“I probably make too much money.”
Verify the current income requirements.“I've owned a home before, so I can't qualify.”
Previous ownership doesn't answer every eligibility question.“I don't have a huge down payment saved.”
Explore financing and assistance before determining the cash required.“If I qualify for assistance, I can buy any house.”
The property and financing still matter.Get the facts before building your home search around an assumption.
Before choosing a price range or relying on assistance to cover certain upfront costs, have the financing reviewed.
A website can't determine whether you qualify.
Program availability, limits and requirements are subject to change. Mortgage approval and program eligibility depend on the applicable lender, financing program, assistance program and the buyer's individual circumstances. Current requirements should be confirmed with an approved participating lender.
If you qualify, how much help could actually be available?
Next we'll break down how Michigan down payment assistance can be structured, what the money may be used for and why the repayment terms matter.
How Down Payment Assistance Works ↓MSHDA isn't one specific type of mortgage.
Depending on the program, eligibility and participating lender, MSHDA financing can work alongside several familiar mortgage types. That means the conversation isn't simply “MSHDA or FHA?” — the programs can sometimes work together as part of one financing strategy.
Your mortgage is the foundation.
The mortgage determines how the home is primarily financed. MSHDA programs may then add applicable homebuyer benefits or assistance around that financing structure.
“FHA” and “MSHDA” don't mean the same thing.
FHA describes a federally insured mortgage program with its own qualification, property and mortgage insurance requirements.
MSHDA administers Michigan homeownership programs that may work with qualifying mortgage products through participating lenders.
There isn't one “best” mortgage for every buyer.
The right financing structure depends on your eligibility, credit profile, income, debts, available funds, property, monthly-payment goals and long-term plans.
That's why comparing mortgages only by their minimum down payment can be misleading.
Before choosing a program, compare these six things.
Down payment, closing costs, prepaids and other purchase-related expenses.
Principal, interest, taxes, homeowners insurance and applicable mortgage insurance.
Understand whether mortgage insurance applies, how it is calculated and how long it may remain.
Compare the complete financing structure rather than focusing on one advertised number.
Different mortgage programs can have different appraisal and property requirements.
Consider how long you expect to own the home and how the financing fits your broader goals.
The same home could potentially be financed in several different ways.
One buyer may use Conventional financing. Another may use FHA. An eligible borrower may use VA. Another buyer purchasing an eligible property may use USDA Rural Development.
The home may be the same. The financing strategy, qualification requirements, cash needs and monthly costs can be different.
Not every lender necessarily offers every MSHDA program.
MSHDA homeownership financing is originated through participating lenders. The lender should have the appropriate approval and experience for the mortgage type being considered.
Working with a lender familiar with MSHDA can help make sure program requirements are addressed before you begin relying on assistance in an offer.
Don't choose the loan program first and then try to force your situation into it. Review your complete financial picture, compare the financing options and determine which available structure best supports your home-buying plan.
MSHDA currently states that MI Home Loan financing can be used with Conventional, FHA, VA and USDA Rural Development financing. Specific assistance availability, eligibility and underwriting requirements can differ by mortgage and program and are subject to change. Verify current options with MSHDA and an approved participating lender.
How much money will you still need to bring to closing?
Assistance can help, but it doesn't automatically mean a buyer needs no money of their own. Next we'll break down what cash-to-close can include.
Understand Cash to Close ↓Down payment assistance doesn't necessarily mean $0 out of pocket.
MSHDA assistance may significantly reduce the amount of cash an eligible buyer needs for a home purchase. But there can still be expenses before closing, required funds at closing and costs worth planning for after you receive the keys.
Don't ask only, “What's my down payment?”
“How much money should I realistically have available from the beginning of the purchase through moving into the home?”
That's a much better number for building a home-buying plan.Think about your cash in three stages.
Contract & Due Diligence
Some expenses can occur well before you reach the closing table.
Your Cash to Close
Your lender calculates the actual amount required to complete the purchase.
Life After the Keys
The closing isn't the end of the financial plan. It's the beginning of homeownership.
Cash to close is more than just the down payment.
This is a simplified illustration only. Your lender and closing documents determine the actual amount required. Earnest money already credited to the transaction may also affect the final amount due.
Earnest money isn't simply money that disappears.
An earnest money deposit is generally submitted after an offer is accepted according to the terms of the purchase agreement.
When the transaction closes, properly credited earnest money is typically reflected in the settlement of the transaction rather than becoming an additional purchase expense on top of everything else.
Whether earnest money is refundable depends on the purchase agreement and circumstances. Buyers should understand their contractual deadlines and protections.
Assistance at closing doesn't necessarily pay every expense along the way.
Buyers should be prepared for expenses that may need to be paid before closing. For example, an inspection is commonly paid when the service is performed rather than waiting until the closing date.
Depending on the transaction, other evaluations or expenses may also arise before closing.
Your purchase may involve several sources of funds.
The exact combination depends on your mortgage, eligibility, purchase agreement and lender calculations.
Your Funds
Eligible verified funds available for the purchase.
MSHDA Assistance
Applicable assistance for eligible expenses when program requirements are satisfied.
Seller Concessions
When negotiated and permitted by the mortgage, seller-paid costs may reduce certain buyer expenses.
Other Permitted Funds
Certain financing structures may allow other eligible sources subject to lender and program requirements.
The purchase agreement can sometimes affect your cash needed.
A buyer may negotiate for the seller to contribute toward certain allowable closing costs or prepaid expenses.
Whether a seller agrees depends on the offer and market conditions, and the amount permitted depends on the applicable mortgage and transaction.
A seller credit isn't guaranteed — it's part of the negotiation strategy.“MSHDA means I can buy a house with no money saved.”
Assistance may dramatically change the amount needed at closing, but buyers should still prepare for pre-closing expenses, any required borrower funds, moving costs and the realities of owning a home.
More importantly, using every dollar you have just to get through closing can leave you financially exposed once the home becomes yours.
Getting the keys shouldn't empty your bank account.
A strong home-buying plan considers what your finances look like the day after closing, not just whether you can make it to closing.
The goal isn't simply to find the smallest possible amount of money needed to purchase a home. The goal is to create a financing plan that gets you through closing while leaving you prepared for homeownership.
Actual cash-to-close requirements depend on the mortgage, property, purchase agreement, assistance program, lender requirements and buyer circumstances. Program eligibility, seller concessions and available assistance are not guaranteed. Obtain current figures from your lender before making financial or contractual decisions.
What does buying with MSHDA actually look like from start to finish?
Next we'll walk through the process — from reviewing your financing and completing required education to making an offer and reaching the closing table.
See the MSHDA Buying Process ↓From “Can I qualify?” to getting the keys.
Buying with MSHDA doesn't need to feel complicated. The key is doing things in the right order — reviewing your finances first, understanding the program, getting properly preapproved and then building the home search around financing that has already been reviewed.
Don't start with the house.
Start with the financing plan.
Looking at homes before understanding your financing can create unnecessary frustration. A better approach is to determine what programs may be available, what payment range makes sense and approximately how much cash you'll need before beginning the serious home search.
A clearer path to homeownership.
Individual transactions can vary, but a MSHDA-assisted purchase generally follows a process similar to this.
Start with the numbers.
Review your income, debts, credit profile, available savings and comfortable monthly-payment range.
Review MSHDA eligibility.
Work with a participating lender who can evaluate the current MSHDA program requirements and determine which financing options may fit your situation.
Complete required education.
If your MSHDA program requires homebuyer education, complete an approved course and retain the required certificate for your financing file.
Get properly preapproved.
Your lender reviews the information and documents needed to establish an appropriate financing range and prepare you for the home search.
Build your home-search plan.
Before touring seriously, define your target areas, property needs, budget, financing considerations and offer strategy.
Find the right property.
Now the home search begins with a clearer understanding of your budget and financing.
Write a strategic offer.
When you find a home you want to pursue, we'll structure an offer around your goals, financing and the circumstances of the property.
Complete the contract milestones.
After an accepted offer, you'll move through the applicable purchase-agreement deadlines and financing requirements.
The lender finishes the loan review.
Your lender works through underwriting while the property goes through the appraisal and other applicable financing requirements.
Sign. Close. Get the keys.
Once the transaction satisfies the applicable financing and contractual requirements, you'll complete the closing documents and officially become a homeowner.
Once you're preapproved, don't accidentally change your financial picture.
Avoid opening or significantly increasing debt without discussing it with your lender.
A vehicle, furniture or other financed purchase could affect your qualification.
Ask your lender before making unusual transfers or moving funds needed for the transaction.
Discuss changes to employment or income with your lender as soon as possible.
Different professionals handle different parts of the process.
Financing, qualification, underwriting and applicable MSHDA program requirements.
Home search, market guidance, offer strategy, negotiations and transaction coordination.
Inspectors, title professionals, insurance providers and others may become involved as the transaction progresses.
Understand first. Decide second. Move confidently.
Our role isn't to push you toward a house simply because you can qualify for it. It's to help you understand the process, ask better questions and make an informed real estate decision that fits your goals.
You don't need to understand every mortgage rule before beginning. You need the right starting point, the right professionals and a clear plan for what happens next.
Program availability, eligibility, assistance amounts, mortgage requirements and MSHDA procedures can change. Financing is subject to lender approval, underwriting and applicable program requirements. Buyers should verify current requirements with MSHDA and an approved participating lender.
What could keep you from qualifying for MSHDA?
Next we'll look at some of the most common eligibility issues — including income limits, purchase-price limits, credit, debt, property requirements and other factors that may affect the financing.
Understand Qualification ↓Could you qualify for a MSHDA home loan?
MSHDA programs have specific eligibility requirements in addition to the requirements of the underlying mortgage. Your income, credit, property, purchase price and homeownership history can all affect eligibility.
Mortgage-qualified doesn't automatically mean MSHDA-qualified.
A lender may determine that you qualify for a mortgage, but MSHDA programs have additional requirements that must also be satisfied.
That's why eligibility should be reviewed early — before building your entire purchase strategy around receiving down payment assistance.
Qualification is about more than your credit score.
These are some of the major areas your participating lender will evaluate when determining whether a MSHDA program may work for you.
Credit Requirements
MSHDA currently states that the MI Home Loan requires a minimum credit score of 640.
Household Income Limits
MSHDA income limits apply and can vary based on household size and the location of the property being purchased.
Sales Price Limit
For MI Home Loan, MSHDA currently lists a statewide sales-price limit of $566,355 for loans after June 1, 2026.
First-Time Homebuyer Status
For MI Home Loan purposes, MSHDA currently describes a first-time homebuyer as someone who has not owned a home during the previous three years.
Debt-to-Income & Underwriting
Your lender will evaluate your monthly debts in relation to qualifying income, along with the requirements of the mortgage and MSHDA program.
Property Eligibility
The property must satisfy applicable MSHDA, mortgage, appraisal and occupancy requirements.
You may still have options.
Under the current MI Home Loan definition, you may potentially meet the program's first-time homebuyer requirement even if you owned a home further in the past.
MI Home Loan is available to repeat homebuyers in qualifying targeted areas, subject to the other program requirements.
Some Kent County communities are currently designated targeted areas.
MSHDA's June 2026 income and sales-price schedule currently identifies the City of Grand Rapids, City of Kentwood, City of Wyoming, Village of Kent City and Spencer Township as targeted areas within Kent County.
The rest of Kent County is currently classified as non-targeted under this schedule. Because eligibility is property-specific, the actual property location should be verified with the participating lender.
There isn't one income number for every Michigan buyer.
MSHDA publishes income limits based on factors including the property's location, targeted-area designation and household size.
That's why seeing someone else's income qualification online doesn't tell you whether your household qualifies.
Don't disqualify yourself before talking to a participating lender.
Income limits vary. Check the actual current limit for your household and property location.
That isn't necessarily true. The three-year rule and targeted-area provisions may matter.
A minimum credit score is only one part of mortgage and program qualification.
The underlying mortgage and MSHDA program each have requirements that must be satisfied.
Get the complete picture before shopping for a home.
“Not yet” doesn't always mean “never.”
If something is preventing qualification today, understanding the specific issue gives you something concrete to work on.
Don't guess whether you qualify for MSHDA based on one number. Eligibility is a combination of the buyer, household, financing, property and current program requirements.
MSHDA currently lists a 640 minimum credit score and a statewide MI Home Loan sales-price limit of $566,355 effective June 1, 2026. Income limits vary by household size and property location. Program requirements and limits are subject to change.
What are the biggest advantages — and tradeoffs — of using MSHDA?
Next we'll look at MSHDA from both sides: where the program can be extremely helpful and what buyers should understand before deciding whether it's the right financing strategy.
See the Pros & Considerations ↓MSHDA can be incredibly useful. That doesn't automatically make it the best option.
Down payment assistance can solve a very real problem: getting enough cash together to purchase a home. But the amount of assistance is only one part of the decision. The mortgage, monthly payment, program requirements, future repayment obligation and your long-term plans should all be considered together.
Don't chase the biggest assistance number.
Choose the financing structure that makes the most sense for the complete purchase.
Two buyers purchasing similarly priced homes can have very different financial circumstances. One may benefit significantly from MSHDA assistance. Another may have enough savings that a different financing structure deserves consideration.
Potential advantages of using MSHDA.
The value of these benefits depends on your eligibility and individual financing situation.
Lower Upfront Cash Pressure
MI 10K DPA may provide eligible buyers with up to $10,000 toward permitted down payment, closing costs and prepaid expenses.
No Interest on MI 10K DPA
The current MI 10K assistance loan carries 0% interest and does not require monthly payments while repayment remains deferred.
Preserve More Savings
Using assistance toward eligible purchase costs may allow some buyers to retain more of their available funds for reserves, moving or future home expenses.
Multiple Financing Paths
MSHDA's MI Home Loan can currently work with several mortgage types, allowing the financing strategy to be evaluated alongside available program benefits.
Assistance comes with conditions.
These aren't necessarily reasons not to use the program. They're reasons to understand it before making the decision.
The Assistance Must Be Repaid
MI 10K is currently a deferred loan, not a grant. Although there are no monthly payments, the outstanding balance can become due when certain triggering events occur.
Program Rules Apply
Income, credit, purchase price, homebuyer education, property and other requirements can affect whether the program is available.
Refinancing Can Matter
Because refinancing is one of the events that can trigger repayment of MI 10K, buyers should understand the deferred balance when evaluating a future refinance.
Selling the Home Can Trigger Repayment
The assistance balance should be considered when evaluating future sale proceeds because selling the property can trigger repayment.
Your Property Still Matters
Receiving assistance does not remove the applicable mortgage, appraisal, property or occupancy requirements.
Another Loan Could Be Worth Comparing
Buyers with sufficient savings or different financial goals may want their lender to compare MSHDA with other available mortgage structures before deciding.
No payment today doesn't mean no payment ever.
Under the current MI 10K program, repayment is deferred. This means the buyer does not make regular monthly payments toward the assistance loan.
The outstanding balance generally becomes due when certain events occur, including sale, refinance, payoff of the first mortgage or when the property is no longer owner-occupied.
Four events worth remembering.
Selling the property can trigger repayment of the outstanding assistance balance.
Refinancing may require the deferred assistance obligation to be addressed.
Paying off the applicable first mortgage can trigger repayment of the assistance.
Repayment can become due if the home stops being used as the applicable owner-occupied residence.
Assistance can be powerful when cash — not necessarily income — is the barrier.
You Can Handle the Payment
Your monthly housing budget works, but accumulating all of the upfront cash has been the bigger challenge.
You Want to Preserve Reserves
Assistance may allow an eligible buyer to keep more savings available after closing instead of using nearly everything for the purchase.
Closing Costs Are the Obstacle
The down payment may be manageable, but the combined effect of closing costs and prepaids is creating the larger cash requirement.
The Complete Financing Still Makes Sense
After comparing payments, costs and long-term obligations, the MSHDA structure still aligns with your financial objectives.
Sometimes having more cash creates more choices.
If you have enough funds for the purchase without assistance, that doesn't automatically mean you should avoid MSHDA — but it does mean there may be value in comparing the alternatives.
Two buyers can both make the right decision.
This buyer has reliable qualifying income and a manageable projected payment but limited funds available for down payment and closing costs.
This buyer has sufficient funds for the down payment, closing costs and reserves. Multiple financing structures may therefore deserve comparison.
These are educational examples only. Actual financing recommendations should be based on the buyer's individual circumstances and current lender/program information.
Not “Can we get $10,000?”
The better question is:
“After comparing the options, does using MSHDA put us in a better overall position to purchase this home?”MSHDA can be an excellent tool when it solves a real cash-to-close problem and the complete financing structure fits your goals. The important part is understanding both the benefit today and the obligation that remains after closing.
MI 10K DPA is currently available statewide for eligible buyers and provides up to $10,000 as an interest-free deferred loan with no monthly payments. Repayment is deferred until applicable triggering events, including sale, refinance, payoff of the first mortgage or when the property is no longer owner-occupied. Program availability and terms are subject to change.
Still have questions about MSHDA and down payment assistance?
We'll finish this resource by answering the questions Michigan buyers ask most often — from whether MSHDA is free money to what happens when you sell or refinance.
Read the MSHDA FAQs ↓Still trying to figure out whether MSHDA makes sense for you?
You're not the only one. Down payment assistance can sound simple until terms like deferred loan, income limits, targeted areas and homebuyer education enter the conversation. Here are answers to some of the questions Michigan homebuyers ask most often.
MSHDA is a financing tool.
For the right buyer, it can significantly reduce the amount of cash needed to purchase a home.
But eligibility, mortgage structure, monthly payment, repayment requirements and your longer-term plans all matter. The goal isn't simply to receive assistance. The goal is to build a home-buying plan that makes sense.
What Michigan buyers want to know.
01 Is MSHDA down payment assistance free money? +
No. The current MI 10K Down Payment Assistance program is structured as an interest-free deferred loan rather than a grant.
There are no regular monthly payments on the assistance while repayment is deferred, but the outstanding balance must be repaid when an applicable repayment event occurs.
02 How much down payment assistance can I receive? +
MSHDA's current MI 10K DPA program provides eligible borrowers with up to $10,000 in down payment assistance.
The actual amount available for your transaction depends on your eligibility, financing and allowable purchase costs. A participating lender should calculate the amount applicable to your situation.
03 Do I have to pay the $10,000 back? +
Yes. MI 10K is currently a deferred loan. It carries no monthly payment while deferred, but the outstanding assistance balance is not automatically forgiven.
Repayment can be triggered by events such as selling the home, refinancing, paying off the first mortgage or no longer using the property as the applicable owner-occupied residence.
04 Do I have to be a first-time homebuyer? +
Not necessarily. Under the current MI Home Loan program, first-time homebuyers may qualify statewide, while repeat homebuyers may potentially qualify when purchasing in eligible targeted areas.
MSHDA currently defines a first-time homebuyer for this purpose as someone who has not owned a home during the previous three years.
05 What credit score do I need for MSHDA? +
MSHDA currently lists a minimum credit score of 640 for the MI Home Loan.
A 640 score does not automatically mean that a borrower will qualify. Income, debts, mortgage underwriting and other program requirements must also be reviewed.
06 Is MSHDA only for low-income buyers? +
MSHDA does have household income limits, but there isn't one statewide income number that applies to every buyer.
Applicable limits can depend on factors including household size and property location. Buyers should check the current limits before assuming they make too much — or that they automatically qualify.
07 Can I use MSHDA with an FHA loan? +
MSHDA financing can work with eligible FHA financing. The buyer must satisfy both the applicable mortgage requirements and MSHDA program requirements.
A participating lender can compare FHA with other financing structures available for your situation.
08 Can I use MSHDA with a conventional loan? +
Conventional financing may also be available through MSHDA for eligible borrowers. Which mortgage structure makes the most sense depends on the buyer's complete financial profile.
09 Can the seller still help with my closing costs? +
Seller concessions may be possible, subject to the purchase agreement and the limits and requirements of the applicable mortgage and financing program.
This can become part of the offer strategy, but it should be coordinated with your lender so the request fits your financing.
10 Can I refinance after buying with MSHDA? +
You may be able to refinance your first mortgage later, but the MSHDA assistance must be considered. Under the current MI 10K structure, refinancing is an event that can trigger repayment of the deferred assistance balance.
Before refinancing, contact the appropriate lender or MSHDA servicing resource to understand how the assistance obligation will be handled.
11 What happens to the assistance when I sell my home? +
Selling the property is one of the events that can trigger repayment of the outstanding MI 10K assistance balance.
Because of that, the balance should be considered when estimating your future proceeds from a sale.
12 Do I need to take a homebuyer education class? +
Homebuyer education is currently required for borrowers using MI 10K Down Payment Assistance. The course must satisfy the applicable MSHDA requirements.
Your participating lender can tell you when it should be completed and which education options satisfy the current program.
13 Can I buy anywhere in Michigan? +
MI Home Loan is available statewide for eligible first-time homebuyers, subject to program requirements.
Location becomes particularly important for repeat buyers because targeted-area rules may affect eligibility. Income limits can also vary by property location.
14 What's the first thing I should do if I'm interested? +
Start by having your financial situation reviewed by a participating lender rather than beginning with the home search.
The goal is to understand your potential MSHDA eligibility, mortgage options, comfortable payment range, estimated cash needed and any steps that should be completed before seriously shopping.
You don't need to be ready to buy tomorrow to start getting answers.
Maybe you're ready now. Maybe you're six months away. Maybe you simply want to know whether MSHDA could work for you. That's a perfectly reasonable place to start.
Let's build your Michigan home-buying game plan.
Tell us a little about where you are in the process. We'll help you identify the next logical step and, when appropriate, connect you with a lender who can review the current financing and MSHDA requirements.
Tell us where you are in the process.
A few details will help us point you in the right direction.
“The goal isn't simply to help you buy a house. It's to help you understand what you're doing, why you're doing it and what happens next.”
Real guidance. Real results. Real estate done right.
Avila Home Group is a real estate brokerage and is not a mortgage lender. Mortgage qualification, interest rates, loan terms, down payment assistance eligibility and MSHDA program requirements are determined by the applicable lender and program administrator. Program availability, limits and requirements are subject to change. Buyers should verify current information with MSHDA and an approved participating lender.