Michigan First-Time Home Buyer Programs 2026: MSHDA Guide

MSHDA Programs Overview

The Michigan State Housing Development Authority (MSHDA) is the state housing finance agency, offering first mortgage loans and down payment assistance through approved lenders statewide.

MSHDA's core products are the MI Home Loan (first mortgage) and the MI 10K DPA (down payment assistance). A newer First-Generation DPA pilot offers enhanced assistance for buyers whose parents never owned a home.

MI Home Loan: Below-Market First Mortgage

The MI Home Loan is MSHDA's primary first mortgage, offering 30-year fixed-rate FHA, VA, USDA, and conventional loans at rates typically 0.25-0.50% below market. It is available to first-time buyers statewide and repeat buyers in federally targeted areas.

The MI Home Loan Flex version removes the first-time buyer requirement entirely — repeat buyers anywhere in Michigan can use it, making MSHDA one of the more flexible state programs.

Minimum credit score is 640. Income limits apply (around $110,000-$134,000 depending on county and household size), and there is a statewide sales price limit. See our FHA vs conventional guide to choose your loan type.

• 30-year fixed-rate FHA, VA, USDA, or conventional loans
• Rates typically 0.25-0.50% below market
• Minimum 640 credit score
• MI Home Loan: first-time buyers (waived in targeted areas)
• MI Home Loan Flex: open to repeat buyers statewide
• Can be combined with MI 10K DPA

MI 10K DPA: $10,000 Down Payment Assistance

The MI 10K DPA provides up to $10,000 for down payment, closing costs, and prepaid expenses. It is a 0% interest second mortgage with no monthly payments — the balance is due only when you sell, refinance, transfer, or pay off the first mortgage.

On a $250,000 Michigan home with an FHA loan, $10,000 covers the entire 3.5% down payment ($8,750) plus $1,250 toward closing costs. Combined with a below-market MI Home Loan rate, your cash to close can drop to nearly zero.

Because there is no forgiveness schedule, the full $10,000 comes due when you exit — but with 0% interest and no monthly cost, it is effectively free money while you own the home.

• Up to $10,000 for down payment and closing costs
• 0% interest, no monthly payments
• Due only at sale, refinance, transfer, or payoff
• Covers full FHA down payment on most Michigan homes
• Must be paired with a MI Home Loan first mortgage
• Minimum 640 credit score

First-Generation DPA: Up to $25,000

Michigan's First-Generation Down Payment Assistance pilot is one of the most generous programs in the country. If neither of your parents (or legal guardians) ever owned a home, you may qualify for up to $25,000 in assistance — enough to cover the down payment and most closing costs on a typical Michigan home.

The program was created to address the racial and generational wealth gap in homeownership. Eligibility is based on your parents' homeownership history, not your income alone — though standard MSHDA income limits still apply.

Funding is limited and released in rounds. Check MSHDA's website or ask an approved lender about current availability before counting on it.

• Up to $25,000 in down payment assistance
• For buyers whose parents never owned a home
• Addresses generational homeownership gap
• Standard MSHDA income and credit requirements apply
• Limited funding — released in rounds, check availability
• Can combine with MI Home Loan first mortgage

MSHDA Income and Sales Price Limits 2026

MSHDA sets income limits by county and household size, plus a statewide sales price limit. Here are the approximate 2026 limits for major Michigan counties — verify at Michigan.gov/MSHDA.

• Income limits based on total household income
• Statewide sales price limit around $510,000
• Higher limits in targeted areas
• Ann Arbor and Oakland County have the highest income limits
• Verify current limits at Michigan.gov/MSHDA

MSHDA Eligibility Requirements

To qualify for MSHDA programs, first-time buyer status means no ownership interest in a primary residence in the past 3 years — waived for targeted areas and for MI Home Loan Flex.

Credit score: minimum 640 for all MSHDA programs. DTI: maximum 45% for most loans, up to 50% with automated underwriting approval. See our DTI ratio guide for improvement strategies.

Occupancy: primary residence only. Homebuyer education: required for all borrowers using DPA — MSHDA-approved courses are available online. Cash contribution: at least 1% of the sales price from your own funds.

• First-time buyer (past 3 years) — waived for Flex and targeted areas
• Credit score: 640+ for all programs
• DTI: 45% max (50% with AUS approval)
• Minimum 1% of sales price from own funds
• Primary residence only
• Complete MSHDA-approved homebuyer education
• Must use a MSHDA-approved lender

How to Apply for MSHDA Programs

MSHDA programs are accessed through approved lenders — you cannot apply directly to MSHDA.

Step 1: Find a MSHDA-approved lender at Michigan.gov/MSHDA. Step 2: Get pre-approved — the lender verifies credit, income, and program eligibility including First-Generation status. Step 3: Complete homebuyer education. Step 4: Find a home within the sales price limit. Step 5: Close — DPA funds are delivered at settlement.

• Step 1: Find a MSHDA-approved lender at Michigan.gov/MSHDA
• Step 2: Get pre-approved and confirm program eligibility
• Step 3: Complete required homebuyer education
• Step 4: Shop within the $510K sales price limit
• Step 5: Close — DPA funds provided at settlement
• Tip: Ask about First-Generation DPA availability early — funding is limited

Local Michigan DPA Programs

Several Michigan cities offer additional assistance that can stack with MSHDA.

• Detroit's city program is among the largest in the Midwest
• Local programs often have lower income limits than MSHDA
• Some local programs stack with MI Home Loan + 10K DPA
• Check your city housing department for current funding rounds