Michigan Down Payment Assistance in 2026
Coming up with a down payment is the single biggest hurdle for most Michigan buyers, and in 2026 the state’s answer runs through one agency: MSHDA, the Michigan State Housing Development Authority. Pair an MSHDA first mortgage with the MI 10K DPA Loan and you can put up to $10,000 toward your down payment and closing costs — in any of Michigan’s 83 counties.
This guide covers how MSHDA’s programs actually work in 2026, what changed, which offers are closed, and the exact steps to qualify. Every program figure comes from the agency that runs it, with the official source named so you can check it yourself. To size your numbers first, run them through our down payment calculator before you talk to a lender.
How down payment assistance works in Michigan
Down payment assistance (DPA) covers part or all of the cash you bring to closing. Michigan’s model is simpler than most states: one statewide agency, one main DPA product, and a tax credit on top.
- A deferred second loan. The MI 10K DPA Loan is a 0% second mortgage with no monthly payment. It is not forgiven — you repay it when you sell, refinance, or pay off the first mortgage.
- A required first mortgage. The DPA only attaches to an MSHDA MI Home Loan (FHA, conventional, VA, or Rural Development), issued through participating lenders.
- A federal tax credit. The Mortgage Credit Certificate (MCC) returns 20% of your annual mortgage interest, up to $2,000 a year, as a federal tax credit.
If you are new to the process, start with our complete guide to down payment assistance and the broader home buying guide, then come back for the Michigan specifics.
Michigan down payment assistance programs at a glance
| Program | Administrator | Amount (2026) | Structure | First-time buyer? |
|---|---|---|---|---|
| MI Home Loan | MSHDA (via lenders) | First mortgage (FHA/Conv/VA/RD) | 30-yr fixed; rate set by lender | Yes outside targeted areas (no ownership in 3 yrs); waived in targeted areas and for eligible veterans |
| MI 10K DPA Loan | MSHDA | Up to $10,000 | 0% deferred, non-amortizing second; repaid on sale, refinance or payoff | Same as MI Home Loan (must pair) |
| Mortgage Credit Certificate (MCC) | MSHDA | 20% of annual mortgage interest (max $2,000/yr) | Federal tax credit, not cash; first-come funding | First-time statewide; repeat buyers in targeted areas |
The First-Generation DPA ($25,000) is reported closed with funds exhausted — see below; it is not listed as an available option.
Sources: michigan.gov/mshda, HUD 2026 FHA loan limits.
MI 10K DPA Loan: up to $10,000, statewide
The MI 10K DPA Loan is Michigan’s workhorse assistance program. As of 2026 it provides up to $10,000 toward your down payment and closing costs as a 0% interest, non-amortizing deferred second mortgage. There is no monthly payment, and the balance does not grow — but it is not forgiven either. You repay the full amount when you sell the home, refinance, or pay off the first mortgage. It must be paired with an MSHDA MI Home Loan. (Source: michigan.gov/mshda.)
One point worth stating plainly, because outdated summaries still get it wrong: the MI 10K is available statewide, in all 83 Michigan counties. MSHDA expanded it from a targeted-ZIP-code program to the whole state in May 2023. If you read somewhere that it only works in certain ZIP codes, that information is at least three years stale.
MI Home Loan: the required first mortgage
The MI Home Loan is MSHDA’s 30-year fixed first mortgage, underwritten as FHA, conventional, VA, or USDA Rural Development, and originated through MSHDA-participating lenders. MSHDA sets rates through those lenders as the market moves, so confirm the current rate sheet with a participating lender rather than relying on any published number.
Outside MSHDA’s designated targeted areas you qualify as a first-time buyer, meaning no ownership interest in a principal residence in the past three years. In targeted areas, and for eligible veterans, the first-time requirement is waived. MSHDA publishes household income limits and a statewide sales-price limit by county, updated on a schedule (the current tables took effect June 1, 2026) — pull the figure for your county from michigan.gov/mshda or ask your lender, because the limits vary by county and household size.
First-Generation DPA: closed — funds exhausted
MSHDA launched a $25,000 First-Generation DPA pilot in February 2025 for buyers whose parents never owned a home. As of mid-2026 the program is reported closed with funds exhausted and no active waitlist. Do not build your plans around it. If MSHDA opens a new funding round, it will announce it at michigan.gov/mshda — check there for current status rather than third-party lists that still show the program as open.
Mortgage Credit Certificate: a tax credit on top
The MCC is not cash at closing — it is a federal income-tax credit worth 20% of your annual mortgage interest, capped at $2,000 per year, every year you occupy the home and keep the original mortgage. Over a full loan term that adds up to real money, and it stacks with the MI 10K. Funding is first-come, first-served; first-time status is required statewide, with repeat buyers eligible in targeted areas.
Federal loan options Michigan buyers pair with DPA
Your assistance attaches to a first mortgage, and the 2026 federal limits below come straight from the agencies that publish them.
- FHA loans require as little as 3.5% down. For 2026 the FHA one-unit limit in every Michigan county is $541,287 — the national floor; no Michigan county is designated high-cost this year (source: hud.gov). See the full 2026 FHA loan requirements for credit and down payment rules.
- Conventional loans follow the 2026 conforming limit of $832,750 for one-unit homes (source: fhfa.gov).
- VA loans allow zero down for eligible veterans — who also skip the MI Home Loan first-time requirement.
- USDA loans offer zero down across much of rural Michigan; check USDA zero-down loans in rural Michigan and the income caps that apply.
To see how each loan type changes your monthly payment, run the numbers through our mortgage calculator.
How to qualify, step by step
- Check your county’s income and sales-price limits. MSHDA publishes current tables; your lender can confirm the figure for your household size.
- Complete a homebuyer education course. MSHDA requires it for DPA borrowers. Do it early — the certificate is the most common last-minute blocker.
- Find an MSHDA-participating lender. Both the MI Home Loan and the MI 10K flow through approved lenders, not the agency directly.
- Get pre-approved on the first mortgage. The DPA attaches to your MI Home Loan, so that approval comes first.
- Submit documents. Tax returns, pay stubs, bank statements, ID — the standard mortgage file.
- Close. Plan for roughly 30 to 60 days; estimate your cash at the table with our closing cost calculator.
Mistakes that cost Michigan buyers money
- Treating the MI 10K like a grant. It is deferred, not forgiven. Budget for the fact that $10,000 comes due when you sell or refinance.
- Skipping targeted-area rules. In targeted areas the first-time requirement is waived — repeat buyers who assume they are ineligible leave money unused.
- Relying on stale program lists. The First-Generation $25,000 pilot is exhausted, and the “ZIP codes only” restriction on the MI 10K ended in 2023. Verify against MSHDA directly.
- Ignoring the MCC. A $2,000-a-year federal tax credit is the most overlooked piece of Michigan’s package because it does not show up at closing.
- Rate-shopping outside the program. MSHDA rates move with the market; compare a participating lender’s MSHDA quote against a standard quote before deciding the DPA is worth it — with $10,000 attached it usually is.
Written by the askdoss Editorial Team. Sources: MSHDA (michigan.gov/mshda), HUD FHA 2026 loan limits (HUD-No-25-145).
Related down payment assistance guides
Compare Michigan’s options with programs in nearby states and national tools:
- how down payment assistance works nationwide
- Illinois IHDA programs
- Ohio OHFA assistance
- Pennsylvania PHFA assistance
- Texas down payment assistance
- Florida down payment assistance
- New Jersey NJHMFA assistance
- estimate your Michigan closing costs
- how much house you can afford
- 2026 FHA loan requirements
- USDA zero-down loans in rural Michigan
Frequently Asked Questions
Does the MSHDA MI 10K DPA Loan have to be paid back?
Yes. Despite the “assistance” name it is a 0% deferred second mortgage — there is no monthly payment, but the full amount is repaid when you sell, refinance, or pay off the first mortgage.
Can I use the MI 10K DPA Loan anywhere in Michigan?
Yes. Since the May 2023 expansion it is available statewide in all 83 counties, not just targeted ZIP codes.
Do I have to be a first-time buyer for MSHDA assistance?
Generally you cannot have owned a home in the past three years, but buyers in MSHDA targeted areas and eligible veterans are exempt from the first-time requirement.
What credit score do I need?
Plan on a 640 minimum for the FHA, VA and USDA versions of the MI Home Loan. Conventional pairings can require a higher score, so confirm the current threshold with an MSHDA-participating lender.
What are 2026 FHA loan limits in Michigan?
$541,287 in every Michigan county. No Michigan county is designated high-cost for 2026, so the national floor applies statewide.