Michigan first-time homebuyer grants and down payment assistance (2026)

Why MSHDA’s $10,000 is a loan you eventually repay

MSHDA calls the MI 10K DPA Loan an interest-free loan. You can put up to $10,000 toward the down payment, closing costs and prepaid items such as escrow for taxes and insurance ⁠². There is no monthly payment, and you do not have to take the maximum loan amount on the first mortgage to qualify ⁠².

MSHDA’s page lists no forgiveness date. The whole balance comes due when one of these happens ⁠²:

• You pay off the MI Home Loan first mortgage.
• You sell or refinance the home.
• The home stops being your owner-occupied residence.

So a buyer who stays 15 years and then sells still repays the full $10,000 out of the sale proceeds. That is the main difference from programs in other states that forgive assistance after a few years. The MI 10K DPA Loan cannot be used with any other first mortgage: it must be paired with a MSHDA MI Home Loan ⁠².

The MI Home Loan: who qualifies and where the price cap sits

The MI Home Loan is open to first-time buyers anywhere in Michigan and to repeat buyers in targeted areas. MSHDA counts you as a first-time buyer if you have not owned a home in the previous three years ⁠¹. The minimum credit score is 640. Since June 1, 2026, the sales price limit has been $566,355 statewide ⁠¹⁠³. MSHDA’s First-Generation pilot allowed conventional, FHA and USDA versions of the MI Home Loan ⁠⁸. Your loan officer will tell you which version fits your purchase.

On its public pages, MSHDA does not publish a maximum debt-to-income ratio for the MI Home Loan. It does not post a separate minimum cash contribution for the MI 10K DPA Loan either. Lenders apply MSHDA’s underwriting rules on top of FHA, USDA or conventional guidelines, so ask your loan officer for both figures in writing ⁠¹⁠².

Targeted areas and the county limits effective June 1, 2026

MSHDA uses one chart for both the MI Home Loan and the MCC. It sets an income limit for households of 1-2 people and another for 3 or more, and it marks each area as targeted or non-targeted ⁠³. In a non-targeted area you must be a first-time buyer. In a targeted area you can be a repeat buyer, and the income limits are higher ⁠³. Sixty-six of Michigan’s 83 counties, including Washtenaw, Ingham, Kalamazoo and St. Clair, are targeted in full. Most other counties have only some targeted cities and townships, such as Detroit, Dearborn and Taylor in Wayne County; Grand Rapids, Kentwood and Wyoming in Kent County; and Flint in Genesee County ⁠³.

Scroll the table sideways to see every column.

The lowest limits, $98,400 and $113,160, apply in the non-targeted parts of Bay, Calhoun, Genesee, Monroe, Muskegon, Saginaw and Shiawassee counties. The highest are in Washtenaw County ⁠³. If your city or township is not named on MSHDA’s chart, use the “Rest of County” row for your county.

To look up your own figure, open MSHDA’s “Income and Sales Price Limits” PDF from the MI Home Loan page. Find your county, then check whether your city, village or township appears on the targeted row ⁠¹⁠³.

MSHDA’s 20% Mortgage Credit Certificate

The MCC is a federal tax credit, not cash at closing. Each year you can subtract 20% of the mortgage interest you paid from the federal income tax you owe. The credit lasts for the life of the original mortgage, up to 30 years ⁠⁴. The credit is not refundable: in any year it can only reduce tax you actually owe ⁠⁵. You must apply through an approved MCC lender and be approved before you buy ⁠⁴. MCCs go out first-come, first-served, with no allocation by lender or region ⁠⁵. They cannot be used to refinance an existing mortgage or land contract ⁠⁵.

The same first-time buyer rule, targeted areas and income limits apply as for the MI Home Loan ⁠³⁠⁵. MSHDA’s MCC page, last captured in April 2026, still listed the earlier $544,233 price cap. The June 1, 2026 chart sets $566,355 for both programs ⁠³⁠⁴. If you sell within nine years of closing, you may owe federal recapture tax. MSHDA’s March 20, 2026 public notice says it will repay any recapture tax a seller pays to the IRS ⁠⁵.

Credit, debt ratios and the 12-month education certificate

Credit. You need a 640 minimum score for the MI Home Loan, and therefore for the MI 10K DPA Loan ⁠¹.

Debt ratios. MSHDA does not publish a cap. Detroit’s grant has its own rule: your house payment can be at most 30% of your income ⁠¹².

Education. Every buyer on a MSHDA mortgage with an MI 10K DPA Loan needs a homebuyer education certificate of completion. Your lender sends the certificate to MSHDA’s underwriters with the loan file, and it is valid for 12 months ⁠⁶. MSHDA accepts four online courses: Fannie Mae HomeView, Freddie Mac CreditSmart, eHome America and Framework. It also accepts certificates from HUD-approved housing counseling agencies, whose classes may be in person or online ⁠⁶. Some providers charge a fee ⁠⁶. The closed First-Generation pilot required a face-to-face class with a HUD-certified counselor, so a certificate from an online-only course would not have counted ⁠⁸.

Detroit’s $25,000 grant and how it stacks with MSHDA

Detroit’s Housing and Revitalization Department opened Round 3 (Phase III) of the Detroit Down Payment Assistance Program on March 11, 2026. It is funded with $1.7 million in CDBG money and $8.77 million in CDBG-DR money, enough for up to 450 buyers. Rounds 1 and 2 helped 794 households ⁠⁹. National Faith Homebuyers, a Detroit nonprofit, processes applications. Buyers whose homes were damaged in the August 2023 flooding get priority if they show a FEMA or DWSD claim ⁠⁹⁠¹⁰.

• Who qualifies. You must have lived in Detroit for the past 12 months, or have lost a Detroit home to property tax foreclosure between 2010 and 2016. You also must not have owned a home in the last three years ⁠¹⁰⁠¹¹.
• Income limits. Household income must be at or below 80% of AMI. On the city’s page that is $58,700 for one person, $75,500 for three, $83,850 for four and $110,700 for eight ⁠¹⁰.
• Amount. Up to $25,000, sized to your actual unmet need. Total assistance cannot exceed 50% of the purchase price ⁠¹¹.
• Your contribution. At least $1,000 of your own money ⁠¹².
• Repayment if you leave early. The grant is secured by a lien with a 3-year affordability period. If you sell or transfer the home within 12 months, you repay 100%. Between months 13 and 24 you repay 67%, and between months 25 and 36 you repay 33% ⁠¹².
• Timing. Funding is first-come, first-served, and a decision takes 2-3 weeks after a complete file arrives ⁠¹¹.

In an Aug. 12, 2026 bulletin, the city confirmed that its grant can be layered with MSHDA down payment assistance. The MSHDA mortgage takes first lien, MSHDA’s assistance second, and the Detroit grant third ⁠¹³. Layering does not raise the Detroit award above your unmet need ⁠¹³. Since the MSHDA income limit in Detroit is $125,760 to $146,720, any household under the city’s 80% of AMI limit is also under MSHDA’s income limit, though MSHDA’s 640 credit score and other rules still apply ⁠¹⁠³⁠¹⁰.

Grand Rapids’ Homebuyer Assistance Fund

Grand Rapids lends $1,000 to $7,500 through its Homebuyer Assistance Fund for down payment, closing costs and some prepaid costs, on homes inside city limits ⁠¹⁴⁠¹⁵. To qualify ⁠¹⁴⁠¹⁵:

• Your household income must be at or below 80% of AMI.
• You must have no more than $10,000 in assets after closing.
• You must not have owned a home in the last three years.
• You must put in at least 1% of the price, or the lender’s minimum if that is higher.
• The home must pass trade inspections and meet HUD price limits.

The money is a second mortgage with a 60-month term. It is forgiven pro rata for each full month you live in the home, so you owe a declining share if you move or sell within five years ⁠¹⁵. You apply through one of the city’s participating lenders. The city’s list includes Lake Michigan Credit Union, Mercantile Bank, Huntington, Fifth Third and others ⁠¹⁴. The fund is paid from the city’s federal CDBG allocation and is small, so ask the Community Development Department whether money is left before you count on it ⁠¹⁴⁠¹⁵.

Getting a MSHDA loan through a lending partner, step by step

1. Check the chart first

   Open MSHDA’s June 1, 2026 limits PDF. Find your county and whether your city or township is targeted, and compare your household’s total income, including overtime, with the right column ⁠³⁠⁵.

2. Pick a MSHDA lending partner

   Use the Experienced Loan Officer Locator or the MI Home Loan Lending Partners list. Its 2025 top lenders include Mortgage 1, Lake Michigan Credit Union, Flagstar Bank and The Dart Bank ⁠⁷. For an MCC, the lender must be on the MCC list ⁠⁴.

3. Take the education class early

   Choose HomeView, CreditSmart, eHome America, Framework or a HUD-approved agency, and keep the certificate. It expires after 12 months ⁠⁶.

4. Gather documents

   Your loan officer collects income, asset and credit documents for the mortgage. MCC applicants also sign the affidavits that prove they meet IRS rules ⁠⁵. Detroit grant applicants also need 12 months of residency proof, such as dated ID, utility bills or tax forms ⁠¹¹.

5. Lock in the city grant if you qualify

   In Detroit, apply on the Neighborly portal once you are pre-qualified, have a signed purchase agreement and have your class certificate ⁠¹⁰⁠¹¹. In Grand Rapids, your HAF lender submits the request ⁠¹⁴.

6. Close and keep the paperwork

   Keep the MI 10K DPA note, which shows the balance due at sale or refinance. Keep the MCC certificate, which you need every tax year, and any city lien papers ⁠²⁠⁴⁠¹².

If one lender declines you, you can take your file to another lender on MSHDA’s list. Applicants who disagree with a Detroit repayment decision can request reconsideration under the program manual ⁠⁷⁠¹². Other Michigan guides are on the Michigan page, and every state’s homebuyer programs are compared on the first-time homebuyer grants page.