Buying a home
Down Payment Assistance Programs in Michigan
Grants, forgivable loans and deferred loans can cover part of a down payment or closing costs. Which ones fit depends on the home, your income and the loan, so start with what each kind asks of you.
- No credit check to ask
- Programs change, so we check what applies to you
The kinds of help
Down payment assistance comes in four shapes
Down payment assistance is money from a state, county, city or nonprofit program that helps cover a down payment or closing costs. Most programs set income and purchase price limits and require a homebuyer education course.
Grants
Money you do not repay, as long as you meet the program's conditions, such as living in the home.
Forgivable loans
A second loan forgiven over a set time while you live in the home. Sell or refinance early and part of it may be due.
Deferred loans
A second loan repaid when you sell, refinance, pay off the first mortgage or move out.
Repayable second loans
A second loan with its own monthly payment, which counts in your debt-to-income ratio like any other debt.
The loans they pair with
Low down payment loans, side by side
| Loan | What sets the down payment | Who it fits |
|---|---|---|
| FHA | Credit score (580 and up for the lowest minimum) | Anyone who meets the requirements, first-time or not |
| VA | Entitlement and the appraisal | Eligible veterans, service members and some surviving spouses |
| USDA | The address and household income | Homes in eligible rural areas, suburbs and small towns, with a household income limit |
| HomeReady and Home Possible | The area income limit | Conventional loans for households under an income limit for the area |
Each loan’s own page explains how its down payment works, and our guide to low-down-payment mortgages lists each program’s minimum. Down payment assistance programs often pair with these loans, and some set rules of their own on top.
Help that is not a program
Other ways the cash can come together
Gift funds
Money a relative or other eligible donor gives you toward a down payment or closing costs, with no expectation of repayment. Lenders require a signed gift letter and proof the money moved.
In the glossarySeller concessions
Costs the seller agrees to pay on your behalf, written into the purchase agreement. Each loan program caps how much a seller can contribute.
In the glossaryLender credits
Money the lender puts toward your closing costs in exchange for a higher interest rate, the reverse of paying discount points.
Compare points and creditsBefore you count on a program
Questions to ask about any program
- Who qualifies: is there an income limit or a purchase price limit, and does it depend on household size or the county?
- First-time buyer: how does the program define it? Many count anyone who has not owned a home in the past three years.
- Homebuyer education: is a class required, and does it have to be finished before you sign a purchase agreement?
- Repayment: is it a grant, forgiven over time, or repaid when you sell, refinance, pay off the first mortgage or move out?
- The loan it pairs with: which first mortgages does it work with, and does the lender you use take part in it?
- Timing: when are the funds approved and released, and can your purchase agreement allow for that?
Official sources
Check programs at the source
Programs open, close and change their limits. The Consumer Financial Protection Bureau explains where first-time buyer programs are listed, and a HUD-approved housing counselor in your area can point you to the ones near you.
Questions about down payment help
If yours is not here, ask it on the call. Programs change, so the answer for your address and loan is the one that counts.
Do I have to be a first-time buyer?
Some programs require it and some do not. Many define a first-time buyer as anyone who has not owned a home in the past three years, so a past owner can still count. FHA loans themselves are open to repeat buyers too.
Does down payment assistance have to be paid back?
It depends on the kind. A grant does not, a forgivable loan is forgiven over time if you stay, a deferred loan is repaid when you sell, refinance, pay off the first mortgage or move out, and a repayable second has its own monthly payment.
Can I use assistance with any loan?
No. Each program names the first mortgages it works with, and the lender has to take part in it. That is one of the first things Samantha checks, because the loan and the program have to fit together.
Can family help instead, or as well?
Often, yes. Gift funds from a relative or other eligible donor can go toward a down payment or closing costs with a signed gift letter and proof the money moved. Whether a gift can combine with a program depends on that program’s rules.
How do I find out what fits me?
Start with your income, the price range and where you want to buy. Samantha can check which programs apply and which lenders she works with take part, before you are under contract on anything.
Ask Samantha which kinds of help fit
A first call is a conversation, not an application. Bring your income, the price range and where you want to buy, and Samantha starts with which kinds of help fit that picture.
- 1
Tell us what you are trying to do
Not what product you want. What you are actually trying to accomplish.
- 2
We look at your situation
Samantha works out what matters most for you specifically.
- 3
You leave with a plan
Your options, the tradeoffs, and your next step. No obligation to go further.
Keep going
Planning the cash side of buying
Cash to close
Down payment, closing costs, prepaids and deposits in one list.
Cash to closeFirst-Time Homebuyer
What happens next, in order, and which parts apply to you.
First-Time HomebuyerHomebuying budget
Start from a monthly payment you are comfortable with.
Homebuying budgetYour Michigan Homebuyer Guide
The free booklet: first call to keys, checklists and the Michigan section.
Your Michigan Homebuyer GuideAlign Lending LLC, NMLS #2041154, is a mortgage broker. Samantha Shelton, NMLS 1647301. Equal Housing Opportunity. Licensed in Michigan, Ohio, North Carolina, Florida, Louisiana and Texas. Program rules, income and price limits and available funds change and vary by program, property and lender. This page is general information, not an offer of credit or a commitment to lend.
