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With downtown energy in Detroit’s comeback story, wine country relaxation in Traverse City and peace in the Upper Peninsula in Marquette, there are plenty of reasons to plant roots in Michigan. Home values in the state have followed the national trend, with the median sale price as of January 2025 up more than 8 percent year-over-year, according to Redfin. If you’re a first-time homebuyer in “America’s High Five,” the Michigan State Housing Development Authority can help.
Michigan homeownership statistics
- Median home price, as of January 2025: $245,800
- Median down payment, as of December 2024: $27,500
- Most affordable counties: Luce, Gogebic, Oscoda, Iron, Clare, Baraga, Ontonagon
Michigan first-time homebuyer programs
MI Home Loan
The Michigan State Housing Development Authority (MSHDA) offers the MI Home Loan, a 30-year fixed-rate mortgage available through participating lenders. It’s underwritten as a conventional, FHA, VA or USDA loan. First-time homebuyers can take advantage of it statewide, and repeat buyers can use it in targeted areas. Participating borrowers may also be eligible for down payment assistance (DPA) through the MI 10K DPA Loan.
Michigan down payment assistance and grants
MI 10K Down Payment Assistance (DPA) Program
The MI 10K DPA loan program, offered through the MSHDA, is a zero percent interest loan of up to $10,000, available to those who qualify for an MI Home Loan. The funds can be used for a down payment, closing costs and prepaids/escrow payments. The loan carries no monthly payments. It only must be repaid when the mortgage ends, the home is no longer a primary residence or there’s a change in ownership.
First-Generation Down Payment Assistance Program
Announced by the MSHDA in February 2025, this pilot program offers first-generation homebuyers up to $25,000 for a down payment, closing costs and prepaids. It has to be combined with a conventional, FHA or USDA loan through the MI Home Loan program, and you can’t use it with the MI 10K DPA loan.
City-specific homebuyer assistance programs
Neighborhood Assistance Corporation of America (NACA) Detroit Neighborhood Initiative
Prospective homebuyers in Detroit can qualify for a low-interest, fixed-rate mortgage with no closing costs or down payment, thanks to this program from NACA. The organization’s goal is to help people with “credit issues, limited resources or discrimination concerns” purchase homes and get out of predatory loans.
National Faith Down Payment Assistance Program
In the metro Detroit area, National Faith Homebuyers’ down payment assistance program gives first-time buyers up to $13,999 to cover a down payment, closing costs and prepaid expenses when buying a single-family home or condo. It’s provided in the form of a zero-interest loan that’s forgivable after five years.
City of Grand Rapids Homebuyer Assistance Fund
In Grand Rapids, first-time homebuyers can receive a zero-interest loan of up to $7,500 to help with closing costs, the down payment and prepaid expenses through the city’s Homebuyer Assistance Fund. To qualify, you’ll need to buy a home within Grand Rapids city limits.
Other Michigan first-time homebuyer loans
While buying a home can be expensive, you can save some money when it’s time to file your taxes via a mortgage credit certificate (MCC). In Michigan, the credit equals 20 percent of your annual mortgage interest, capped at $2,000 a year. You’ll need to pay a $400 fee for the MCC, and your lender might charge an additional $100 on top of that, but the upfront cost can be worth it if you use the credit every year for the full 30 years of your mortgage.
If you’re taking out an MI Home Loan through the MSHDA, you’re out of luck, however — the MCC can’t be combined with these loans. It can’t be used with FHA 203(k) loans, either.
On a national level, there are loans geared toward first-time homebuyers that Michiganders can take advantage of. Some of the loans you can explore include:
- FHA loans: Loans insured by the Federal Housing Administration (FHA) have more lenient financial requirements than other loans. You can get an FHA loan with 3.5 percent down and a credit score as low as 580.
- VA loans: For active-duty military, veterans and surviving spouses, a loan guaranteed by the U.S. Department of Veterans Affairs (VA) is a great option. These loans typically come with lower interest rates and don’t require a down payment.
- USDA loans: Loans guaranteed by the U.S. Department of Agriculture (USDA) also require no down payment, but you’ll need to buy in a designated rural area and meet area-specific requirements.
- HomeReady and Home Possible loans: HomeReady and Home Possible are loan programs created by government-sponsored enterprises Fannie Mae and Freddie Mac. They’re specifically for first-time homebuyers, requiring only 3 percent down and having more flexible income requirements.
Get started
Ready to make owning a home in Michigan a reality? Here’s how to get started.
- Boost your credit score. The higher your credit score, the better interest rate you’ll get. If your credit could use some help, work on improving it before applying for a mortgage. This means paying your bills on time, reducing your debt load and bringing any past-due accounts current.
- Explore lenders. Once your credit is in a good place, it’s time to think about finding the right mortgage lender. You can use the MSHDA’s search portal to find a list of banks, credit unions and other lenders in each of the counties in the state, along with contact information for loan officers to help you through the process. Create a list of at least three lenders and request offers from each one.
- Compare offers. Now, you can start comparing the mortgage offers based on several factors, including the interest rate, annual percentage rate (APR) and closing costs. Consider each lender’s online reviews and ratings, too — especially when it comes to customer service.
You can also prepare for your journey to Michigan homeownership by:
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