How MSHDA Down Payment Assistance Works in 2026

Saving for a down payment is one of the biggest barriers to homeownership, especially for first-time buyers. The Michigan State Housing Development Authority (MSHDA) offers down payment assistance programs designed to bridge that gap and help more Michigan residents achieve the goal of owning a home. If you are buying in 2026, here is everything you need to know about how the program works.

What Is MSHDA Down Payment Assistance?

MSHDA's DPA program provides up to $10,000 in down payment and closing cost assistance to eligible buyers. The assistance comes as a zero-interest, non-amortizing second lien on the property. That means you make no monthly payments on the DPA loan. It only becomes due when you sell the home, refinance the first mortgage, or pay off the loan entirely. This structure keeps your monthly housing costs as low as possible while getting you into a home sooner.

Eligible Loan Types

MSHDA down payment assistance can be paired with several first mortgage loan types:

• FHA loans: Popular with first-time buyers. Minimum 3.5% down payment (covered by DPA).
• VA loans: For eligible veterans and active-duty military. Zero down payment required, so DPA can cover closing costs.
• USDA loans: For rural-eligible areas. Zero down payment required. Some communities in northern Macomb County qualify.
• Conventional loans: Available through MSHDA with as little as 3% down.

Eligibility Requirements

To qualify for MSHDA DPA in 2026, buyers must meet the following criteria:

• First-time buyer status: You must not have owned a home in the past three years. Exceptions exist for buyers purchasing in targeted areas.
• Income limits: Your household income must fall within MSHDA's limits, which vary by county and household size. For Macomb and Oakland counties, the 2026 limits for a household of 1-2 people are typically around $100,000 to $120,000, though you should confirm current figures with your lender.
• Purchase price limits: The home you are buying must be within MSHDA's purchase price cap for your county. Limits vary but are generally generous enough to cover most starter homes in Sterling Heights, Warren, Shelby Township, and surrounding communities.
• Homebuyer education: You must complete a MSHDA-approved homebuyer education course. These are available online and in person and typically take about 4 to 6 hours. The course covers budgeting, the mortgage process, and maintaining your home after purchase.
• MSHDA-approved lender: You must work with a lender approved by MSHDA. Not all lenders participate in the program.

How to Apply: Step by Step

The process is straightforward when you work with the right team:

• Step 1: Connect with a MSHDA-approved lender. We recommend Union Home Mortgage, REALTEAM's preferred lending partner. They have extensive experience with MSHDA loans and can confirm your eligibility quickly.
• Step 2: Complete the homebuyer education requirement. Your lender will provide approved course options.
• Step 3: Get pre-approved for your first mortgage and DPA together. Your lender handles the MSHDA application as part of the loan process.
• Step 4: Find your home and make an offer. Your REALTEAM agent will guide the search and help you navigate negotiations.
• Step 5: Close on your new home. The DPA funds are applied at closing toward your down payment and eligible closing costs.

Why MSHDA Matters in Today's Market

With home prices continuing to rise across SE Michigan, including communities like Troy, Utica, and Chesterfield Township, the $10,000 DPA benefit is more valuable than ever. It can make the difference between continuing to rent and building equity in a home you own. Combined with today's available loan programs, many buyers are surprised to learn they can purchase a home with very little cash out of pocket.

If you think you might qualify for MSHDA down payment assistance, do not wait. Use our mortgage calculator to estimate your monthly payment with DPA, then contact a REALTEAM agent to start your home search. We will connect you with the right lender and walk you through the entire process from pre-approval to closing day.