A First-Time Home Buyer's Guide to Down Payment Assistance Programs
Michigan first-time home buyers can get help with a down payment through statewide and local down payment assistance programs that offer 0% interest loans, deferred second mortgages, or grants. For most Metro Detroit buyers we work with, the best first stop is the MI 10K DPA loan from the Michigan State Housing Development Authority (MSHDA), paired with an MSHDA MI Home Loan from a participating lender.
You can add a local program if your city or county offers one.
We are MARK Z Real Estate Experts, a Metro Detroit team led by Mark Zawaideh at eXp Realty. We help first-time buyers match these programs with the right home and offer.
How down payment assistance works
Down payment assistance (DPA) helps you cover the down payment, closing costs, and prepaids. In Michigan, most DPA is a second mortgage loan at 0% interest with no monthly payments.
You repay it when you sell, refinance, or pay off the first mortgage.
| Assistance type | How it works | Question to ask |
|---|---|---|
| Deferred 0% loan | No monthly payment, repaid at sale or refinance | When is repayment due? |
| Forgivable loan | Forgiven after a set number of years in the home | What if I move early? |
| Grant | No repayment | Is funding still available? |
We ask the lender to show the DPA loan on the closing disclosure, so you know what you owe later.
Statewide MSHDA programs
That disclosure will usually name MSHDA, the state agency that runs Michigan's main programs.
| Program | Assistance | Key requirements |
|---|---|---|
| MI 10K DPA Loan | Up to $10,000 at 0% interest | MI Home Loan, 640 minimum credit score, homebuyer education |
| First-Generation DPA | Up to $25,000 | MI Home Loan, first-generation buyer, face-to-face education with a HUD-approved counselor |
The MI Home Loan serves first-time homebuyers statewide and repeat buyers in targeted areas. Household income limits apply by family size and location, and MSHDA also sets a sales price limit, so confirm the current figure with a participating lender.
Choose the First-Generation DPA when neither parent has owned a home in the past three years, because it offers more help than the MI 10K.
You cannot combine the two, though, and the pilot has limited funding, so apply early.
Local programs in Metro Detroit and Michigan
Once the state piece is settled, local help depends on where you buy:
- Detroit: up to $25,000 in grants for down payment, rate buydowns, closing costs, or principal reduction.
- Oakland County: for buyers in Novi, Birmingham, West Bloomfield, and the rest of the county, the Treasurer's Office and a partner bank offer a home buyer assistance program for first-time buyers at or below 120% of Area Median Income, with at least $1,000 of your own funds.
- Lansing and Grand Rapids: city programs for buyers purchasing within city limits.
Local programs often fund buyers first-come, first-served, so we check availability before you write an offer.
Common requirements
Whichever mix you choose, you will meet similar requirements.
| Requirement | Typical rule |
|---|---|
| First-time buyer | No ownership of a primary residence in the past three years |
| Credit score | 640 for most MSHDA programs |
| Income | Household income limits by county and family size |
| Education | Homebuyer education certificate before closing |
| Lender | Apply through an MSHDA-participating lender |
If you owned a home years ago, you may still count as a first-time buyer, so ask your lender to confirm.
Loan options that pair with DPA
That lender conversation also settles your first mortgage, which shapes what assistance fits.
| Loan | Minimum down payment | Best fit |
|---|---|---|
| FHA | Low down payment, with mortgage insurance | Lower credit scores |
| VA | 0% | Veterans and active military |
| USDA | 0% | Eligible rural and suburban areas |
| Conventional | 3% for qualifying first-time buyers | Stronger credit |
How our team helps first-time buyers
Once you pick a loan and program, we handle the timing.
We do not make loans or approve grants.
The lender and program decide eligibility. We connect you with a participating lender and keep your education certificate on schedule.
Then we find homes under program price limits and write offers with closing timelines that leave room for assistance approval.
Start with our buyer guide
Start with our buyer guide, get pre-approved, or call our Novi office at (248) 890-7077. Program terms change, so confirm current limits with your lender or MSHDA before applying.