MSHDA program
The MSHDA MI Home Loan, explained
In short
The MI Home Loan is the Michigan State Housing Development Authority's flagship mortgage for first-time buyers (and repeat buyers in targeted areas). MSHDA doesn't lend directly — it works through approved lenders, adding benefits on top of a standard FHA, VA, USDA, or conventional loan. Its main draw is that it's the required base for Michigan's down payment assistance. To qualify you need a 640 credit score, household income under your county's limit, and a purchase price under the county cap.
How the MI Home Loan works
The MI Home Loan isn't a separate loan type sitting apart from FHA or conventional — it's a MSHDA-backed version of one of those loans, originated by a MSHDA-approved lender. The state's involvement is what makes the down payment assistance possible and locks in competitive, fixed pricing. You still choose the underlying loan (FHA at 3.5% down, conventional at 3%, VA or USDA at zero down), and MSHDA layers its benefits on top.
Because not every lender is MSHDA-approved, the single most important question to ask when shopping is direct: 'Do you originate MI Home Loans with the 10K DPA?' A vague answer means no, and you'll want a lender who handles these regularly.
Who qualifies
Three requirements screen most applicants: a 640 minimum credit score (660 for manufactured homes), household income under the county limit (roughly $80,000–$120,000 in most counties, counted for everyone in the home, not just the borrower), and a purchase price under the county cap. First-time-buyer status is required in most of the state, though repeat buyers can qualify in designated targeted areas.
A homebuyer education course is required when you take down payment assistance — it's inexpensive or free and worth doing early, since it's a common last-minute holdup.
Why it's worth the extra steps
The MI Home Loan carries a bit more paperwork than a plain mortgage, but it's the gateway to up to $10,000 in down payment assistance through the MI 10K DPA — money that can cut your cash-to-close from thousands to almost nothing. For a first-time Michigan buyer who meets the income and credit rules, that trade is almost always worth it.
Frequently asked questions
What credit score do I need for a MSHDA MI Home Loan?
640 for most homes, or 660 for manufactured homes. That's stricter than FHA's 580 floor, so a buyer between 580 and 640 may need to build score before qualifying for MSHDA — though an FHA loan without assistance can be an interim path.
Is the MI Home Loan only for first-time buyers?
In most of Michigan, yes — but repeat buyers can qualify in designated targeted areas. First-time status generally means you haven't owned a home in the past three years.
How do I find a MSHDA-approved lender?
Approval lists change, so ask lenders directly whether they originate MI Home Loans with the 10K DPA. Not every Michigan lender participates, and some large online lenders don't offer it at all.