Qualifying
Down payment
The cash you pay upfront toward a home's price, with the mortgage covering the rest. It ranges from 0% on VA and USDA loans to 3.5% on FHA and 20% to avoid PMI.
What does down payment mean?
Your down payment sets your starting equity and affects your rate and whether you pay mortgage insurance. Michigan buyers have more low-down options than most realize: VA and USDA offer zero down, FHA needs 3.5%, and conventional programs go to 3%. Crucially, the MSHDA MI 10K DPA provides up to $10,000 toward the down payment and closing costs statewide as a 0%-interest loan — which can cut the cash needed on a $200,000 home from about $13,000 to a few thousand. A bigger down payment lowers the payment but isn't required to buy.
Common questions
What's the minimum down payment in Michigan?
Zero on VA and USDA loans, 3% on some conventional programs, and 3.5% on FHA. The MSHDA MI 10K DPA can cover most of it with up to $10,000.
Does a bigger down payment lower my rate?
It can, and it reduces or eliminates mortgage insurance below 20%. But it isn't required to buy — many Michigan buyers get in with 3–3.5% plus assistance.
Can I use gift funds for a down payment?
Usually yes, with a documented gift letter from an eligible source. Program rules vary, so confirm with your lender before the funds move.
Related terms