Overview
Michigan is one of the most affordable housing markets in the Midwest, with a statewide median home price near $235,000 that puts homeownership within reach for many first-time buyers. The Michigan State Housing Development Authority (MSHDA) provides the state's assistance, and in 2026 its down payment program expanded statewide, widening access well beyond the targeted neighborhoods it once focused on.
MSHDA's help comes as a pair: the MI Home Loan, a 30-year fixed first mortgage, combined with the MI 10K DPA Loan for down payment and closing costs. The assistance is a zero-interest, non-amortizing second mortgage with no monthly payment, repaid only when you sell or refinance. The amount depends on location — buyers purchasing in one of roughly 236 designated "targeted" ZIP codes can receive the full $10,000 (and don't even have to be first-time buyers there), while buyers elsewhere in the state receive $7,500 through the standard statewide program. A 640 credit score is required, along with at least a 1% contribution from your own funds.
State Programs
MI Home Loan Program
Below-market rate first mortgage (pairs with DPA)MI 10K DPA Loan
Deferred down payment assistanceFederal Programs Available in Michigan
These nationwide programs can be combined with Michigan state assistance for maximum benefit.
FHA Loan Program
Low down payment mortgageVA Home Loan
Zero down payment mortgageUSDA Rural Development Loan
Zero down payment mortgageTips for First-Time Buyers in Michigan
Detroit and other cities add their own layers. Detroit buyers can access city and nonprofit down payment programs designed to rebuild neighborhood homeownership, and metros like Grand Rapids and Lansing run their own funds. Because the MI 10K DPA is comparatively modest, combining it with a low-down-payment FHA loan — or a city program where available — is often how Michigan buyers assemble a full down payment. A HUD-approved housing counselor can confirm what stacks in your area.
Michigan's tax picture is straightforward. The state levies a flat income tax of 4.25% — a brief reduction to 4.05% in 2023 reverted, and the Treasury confirmed the rate stays at 4.25% for 2026 — so plan around the higher figure. Property taxes average about 1.44% of home value, with bills shaped by local millage and Michigan's "taxable value" cap, which limits how fast the assessed value of a home you already own can rise. That cap resets when a home changes hands, so a new buyer's tax bill can be higher than the seller's was.
Buyers across Michigan should check city and county housing offices for assistance that stacks with MSHDA, and veterans or active-duty buyers near Selfridge Air National Guard Base should compare a zero-down VA loan with the state programs. Rural buyers in much of the state may qualify for zero-down USDA loans. Since MSHDA requires a homebuyer education course, completing it early keeps your options open when the right home appears.
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Program details, eligibility requirements, and benefit amounts are subject to change. Verify all information directly with the administering agency before applying. Last verified: June 15, 2026.