Down Payment Assistance in Michigan: MSHDA Programs That Make Homeownership Possible
For many Michigan buyers, the down payment is the biggest single barrier to homeownership. Saving 3.5% on a $250,000 home while also paying rent requires discipline and time — and that’s before closing costs. The Michigan State Housing Development Authority (MSHDA) has built one of the most active statewide DPA programs in the country to address this directly, and in 2025 set an all-time record by helping more than 6,000 Michigan families become homeowners.
The Bookspan Baker Team at Guild Mortgage is an approved MSHDA lender with experience guiding Michigan buyers through every available program option.
MSHDA: Michigan's Primary Down Payment Assistance Agency
The Michigan State Housing Development Authority (MSHDA), established in 1966, provides affordable mortgage financing and down payment assistance to Michigan homebuyers through its MI Home Loan program. In 2025, MSHDA distributed over $1 billion in mortgage and DPA loans — the most in a single calendar year since its founding.
MSHDA’s DPA is structured as a zero-interest, non-amortizing second mortgage with no monthly payments. It is due only when you sell the home, refinance, transfer title, or pay off the first mortgage.
MI 10K DPA: Up to $10,000 in Targeted ZIP Codes
MSHDA’s flagship down payment assistance provides up to $10,000 as a zero-interest deferred second mortgage for buyers purchasing in one of 236 eligible Michigan ZIP codes. These targeted ZIP codes are concentrated in Michigan’s urban and underserved areas — including Detroit, Flint, Lansing, Saginaw, Benton Harbor, and surrounding communities.
Loan Type
Must use an MSHDA MI Home Loan first mortgage (FHA, Conventional, VA, or USDA)
Minimum Credit Score
640 (660 for manufactured homes)
First-Time Buyer
Required in most ZIP codes (not owned a primary residence in past 3 years); repeat buyers eligible in certain targeted areas
Maximum Purchase Price
$544,233 statewide (2026)
Income Limits
Vary by household size and county; set by MSHDA annually
Homebuyer Education
Required — must complete an MSHDA-approved course before closing
Structure
Zero-interest deferred second mortgage; no monthly payment; due on sale, refinance, or payoff
MI DPA: $7,500 Available Statewide
For buyers purchasing anywhere in Michigan — including ZIP codes not covered by the MI 10K program — MSHDA offers $7,500 in zero-interest deferred DPA assistance under the same MI Home Loan structure. The same income limits, credit score minimums, purchase price cap, and homebuyer education requirements apply.
MSHDA's First-Generation DPA Program (Concluded Pilot)
In February 2025, MSHDA launched a limited pilot offering $25,000 to first-generation homebuyers — defined as those whose parents have not owned a home in the last three years and who have no prior homeownership history. The program was funded with $8 million in state appropriations. The funds were fully committed by May 2025. Buyers who missed the window remain eligible for MI 10K DPA or the $7,500 statewide program.
How MSHDA DPA Pairs With Each Loan Type
FHA + MSHDA DPA: The most common combination for Michigan first-time buyers. FHA’s 3.5% down requirement can be fully offset by $10,000 DPA on most Michigan purchases, with remaining funds available for closing costs.
Conventional + MSHDA DPA: For buyers with stronger credit, pairing a low-down-payment conventional loan with MSHDA DPA can avoid FHA mortgage insurance while still minimizing cash at closing.
VA + MSHDA: VA Loans already require no down payment for eligible veterans. MSHDA DPA can be used to offset closing costs, further reducing total cash at closing for qualifying veterans.
What Michigan DPA Buyers Should Know
MSHDA DPA is a deferred loan, not a grant. The zero-interest balance is due when you sell, refinance, or move out. There is no monthly payment, but repayment will eventually be required.
Purchase price cap is firm. The $544,233 statewide limit (2026) excludes upper-tier Oakland County and Ann Arbor purchases.
First-time buyer requirement applies in most cases — defined as not having owned a primary residence in the last three years. Exceptions exist for targeted areas.
Income limits apply and vary by county and household size.
Homebuyer education is mandatory — an MSHDA-approved course must be completed before closing.
Frequently Asked Questions: Down Payment Assistance in Michigan
The MI 10K DPA provides up to $10,000 in zero-interest deferred down payment assistance to buyers purchasing in one of 236 eligible Michigan ZIP codes using an MSHDA MI Home Loan. It is structured as a second mortgage with no monthly payment, due only when the home is sold, refinanced, or the first mortgage is paid off.
The MI 10K provides up to $10,000 but is limited to 236 targeted ZIP codes concentrated in urban Michigan. The $7,500 program is available statewide with no ZIP code restriction. Both require an MSHDA MI Home Loan, a minimum 640 credit score, and income within MSHDA limits.
No. Both programs are zero-interest deferred second mortgages. No monthly payment is required, but the balance is due upon sale, refinance, or payoff of the first mortgage.
$544,233 statewide as of 2026. This limit applies to both the MI 10K and the $7,500 programs.
This was a limited pilot program launched in February 2025. The $8 million in state funding was fully committed by May 2025. The program is now closed. Buyers who meet first-generation criteria are still eligible for the standard MI 10K or $7,500 DPA programs.