TL;DR
MSHDA (the Michigan State Housing Development Authority) offers up to $10,000 in down payment assistance to qualifying first-time buyers in Michigan through the MI Home Loan program. The help comes as a zero-interest, zero-monthly-payment loan that only gets repaid when you sell, refinance, or pay off your mortgage. Eligible buyers need a credit score of at least 640, household income under the county limit (roughly $95,000–$121,000 for most Downriver counties in 2026), and the property must be your primary residence. You also have to complete a homebuyer education course. Yes — this stacks with FHA, Conventional, VA, and USDA loans.
Intro
If you’ve been putting off buying your first home because you don’t have a down payment saved, you probably don’t realize that Michigan has one of the best down payment assistance programs in the country — and most first-time buyers we work with at The Saward Team qualify without realizing it. This guide walks through exactly how MSHDA’s MI Home Loan + Down Payment Assistance works in 2026: who qualifies, how much help you get, what the catch is (spoiler: there barely is one), and how to actually start the process this week.
What Is MSHDA?
The Michigan State Housing Development Authority is a state agency whose job is to make homeownership more accessible, particularly for first-time buyers and lower-to-moderate income households. Their flagship program for buyers is the MI Home Loan, and attached to it is Down Payment Assistance (DPA) of up to $10,000.
The MI Home Loan itself is a standard 30-year fixed mortgage (FHA, Conventional, VA, or USDA underneath) that MSHDA purchases from your lender after closing. From your perspective as the buyer, it looks and feels like a normal mortgage.
How Much Money Do You Actually Get?
Up to $10,000 as a second-lien “soft” loan with:
- 0% interest rate
- $0 monthly payment
- No repayment required until you sell, refinance, or pay off the first mortgage
That last point is the big one. This isn’t a grant that has to be repaid later — it’s a loan that sits quietly in the background. If you stay in the home for 30 years and pay off the mortgage, you eventually pay it back. If you sell in year 10, it comes off the top at closing. There’s no monthly burden in the meantime.
MSHDA 2026 Eligibility Requirements
To qualify for MSHDA DPA in 2026 you need to meet all of the following:
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First-time homebuyer — meaning you haven’t owned a home in the last 3 years. (Exception: if you’re buying in a designated “Targeted Area” — parts of Downriver including portions of Taylor, Lincoln Park, Inkster, and Ecorse qualify — the first-time rule is waived.)
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Minimum credit score of 640 — 660 if you’re going Conventional rather than FHA.
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Household income under the county limit. For 2026 the limits for a household of any size in Downriver-area counties are approximately:
- Wayne County: ~$121,320
- Monroe County: ~$117,960
- Washtenaw County: ~$143,880
These are sales-price-and-income limits that MSHDA updates periodically — always verify with your lender before assuming.
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Sales price under the state limit — approximately $251,699 for most of Michigan in 2026.
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Primary residence only — you have to live there. No investment properties, no second homes, no flips.
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Complete a homebuyer education course — typically an online class that takes about 6–8 hours. We’ll point you to approved providers.
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Minimum 1% down contribution from your own funds (gift funds and seller concessions also work in many cases — we’ll walk you through this).
Does MSHDA Work for Non-First-Time Buyers?
Yes, in two cases:
- You’re buying in a Targeted Area. Portions of several Downriver cities qualify. Your loan officer can check the specific property address.
- You’re a qualified veteran. The first-time rule is waived regardless of location.
The Real-World Math
Here’s what $10,000 in DPA actually unlocks:
Scenario: A first-time buyer in Wyandotte making $62,000/year, buying a $200,000 home with FHA financing.
| Item | Without MSHDA | With MSHDA DPA |
|---|---|---|
| Purchase price | $200,000 | $200,000 |
| Minimum down (FHA 3.5%) | $7,000 | $7,000 |
| Closing costs (estimated) | $5,500 | $5,500 |
| Cash needed at closing | $12,500 | ~$2,500 |
| Monthly mortgage payment (est.) | $1,562 | $1,562 |
The $10,000 from MSHDA covers $7,000 of the down payment and $3,000 of closing costs. Suddenly you need $2,500 to close on a $200,000 house instead of $12,500. That’s the difference between buying this year and buying in two.
How to Actually Apply (Step-by-Step)
- Get pre-approved with a MSHDA-approved lender. Not every lender does MSHDA loans. We work with several who do it well and can refer you. Text us at 734-977-1405 for a referral.
- Take the homebuyer education course (online, ~6–8 hours). Your lender will send you the approved link.
- Get under contract on a home that meets MSHDA’s price limit. (Most homes in Downriver under $250,000 qualify.)
- Lender processes the MI Home Loan + DPA together — it’s one closing, one set of paperwork from your perspective.
- Close and move in. MSHDA records the second lien at closing. You don’t see it again until you sell or refinance.
Common Mistakes That Get MSHDA Applications Denied
- Credit score under 640 (or 660 for Conventional). Fix this before applying — most credit-repair wins happen in 30–60 days with a plan.
- Income over the county limit because buyers didn’t count overtime, bonus, or self-employment income. Have your lender pre-check.
- Trying to buy above the $251,699 sales price cap. Look at homes well below that to leave room for negotiating up.
- Not completing the homebuyer education course before the loan closes. This is non-negotiable — don’t skip it.
Frequently Asked Questions
How much down payment assistance can I get from MSHDA in 2026?
Up to $10,000 through the MSHDA MI Home Loan + DPA program. It’s a zero-interest, zero-payment second lien that gets repaid when you sell or refinance.
What credit score do I need for MSHDA?
A minimum of 640 for FHA, VA, or USDA loans, and 660 for Conventional MSHDA loans. Most borrowers we work with qualify at or above 640.
What’s the income limit for MSHDA in Wayne County in 2026?
Approximately $121,320 in household income for 2026, regardless of household size. Monroe County is around $117,960. These update periodically — confirm with a MSHDA-approved lender.
Do I have to pay MSHDA DPA back?
Only when you sell, refinance, or pay off your first mortgage. There are no monthly payments and no interest accruing. It sits as a silent second lien.
Can MSHDA be used with FHA loans?
Yes. MSHDA layers on top of FHA, Conventional, VA, and USDA loans. FHA is the most common pairing for first-time buyers in Downriver.
How long does it take to close a MSHDA loan?
Typically 35–45 days from offer acceptance to closing — slightly longer than a conventional loan because of the additional MSHDA paperwork, but not dramatically so.
Can I use MSHDA to buy a home in Trenton or Wyandotte?
Yes — any home in Michigan that meets the sales price limit ($251,699 in 2026) and is your primary residence qualifies. Most single-family homes in Trenton, Wyandotte, Southgate, Riverview, Lincoln Park, and Taylor fall well under that cap.
CTA
Not sure if you qualify? Fill out our contact form at sawardteam.com/contact or text 734-977-1405 with “MSHDA” and we’ll connect you to a local MSHDA-approved lender for a free pre-qualification — usually done in a single phone call.
Chris Bujaki with The Saward Team, brokered by eXp Realty