First-Time Home Buyer Programs

Need help buying your first home? The Michigan State Housing Development Authority helps with two loan programs, plus a down payment assistance program.

If you haven’t owned a home in the last three years, you can qualify as a First Time Home Buyer. That means that if you owned a home but lost it more than three years ago in the housing crash, you may be able to get a fresh start under these programs.

National first-time home buyer programs

Conventional mortgage

Low down payment, Limited mortgage insurance premiums.

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a conventional mortgage, but a score around 740 earns you the best interest rates.

FHA loans

Best for home buyers with low credit scores or looking for low down payments. This is the go-to program for many Americans, especially first-time home buyers and those who have a credit history that’s … let’s say shaky.

The Federal Housing Administration guarantees a portion of home loans, which frees lenders to broaden their acceptance standards. With FHA backing, borrowers can qualify for loans with as little as 3.5% down.

VA loans- Military, Low down payment

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you’ll likely have to pay a VA funding fee.

USDA loans- Low down payment, Rural

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

Michigan home buyer assistance programs

MSHDA highlights and eligibility requirements


  • Available for credit scores as low as 640
  • An alternative credit review is available for some borrowers who have no credit score
  • The minimum down payment is 3% and down payment assistance is available
  • Available to first-timers as well as repeat home buyers in economically disadvantaged targeted areas such as the cities of Detroit, Grand Rapids, Flint and Dearborn (here’s a list of target areas)
  • You have your choice of conventional, FHA, VA or USDA loans


  • The home has to be your primary residence
  • The 2018 sale price limit is $224,500
  • There are income limits that vary by location
  • The overall debt-to-income ratio of 45% or less
  • You must attend a homebuyer education course if you receive down payment assistance
  • You have to contribute at least 1% of the loan amount, even with down payment assistance

Your next step

Start out on the Michigan State Housing Development Authority’s Am I Eligible for a MSHDA Mortgage?page, which has links to information about the state’s loan programs, including mortgage credit certificates and homebuyer education classes.

If you need down payment assistance, take a look at MSHDA’s down payment assistance page.

The state agency keeps this county-by-county list of loan officers who do MI Home Loans and another list of loan officers who do MI Home Loan Flex mortgages.