Michigan Home Buyers… Need A Little Help With That?

Are you struggling to come up with a downpayment? Have you heard of the newest federally funded DPA program for Michigan Home Buyers? It’s not just for first-time home buyers…

2019 UPDATE: Step Forward has allocated $20 Million towards the Down Payment Assistance (DPA). Now offering home buyers $15,000 in forgivable loan towards to the purchase of a new residence in designated zip codes.

The $15,000 is allocated as a second loan, applied to help you purchase a home and is automatically reduced 20% per year, interest free and then discharged after just five years. Funds are limited and available on a ‘first come, first serve’ basis.

Step Forward Down Payment Assistance (DPA)


Step Forward Down Payment Assistance (DPA) is federally-funded, forgivable and offered in 61 eligible zip codes in 10 Michigan counties. 

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Step Forward has allocated $20 million to the DPA program. Funds are limited and are available on a first-come, first served basis to local home buyers. The MSHDA down payment assistance is $15,000 and must be used with a MSHDA MI Home Loan.

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DPA is available in 61 eligible zip codes in 10 MI counties. Updated 10/2018


The MSHDA down payment assistance program is designed to improve neighborhood stabilization and promote homeownership in areas of Michigan that still affected by higher rates of foreclosure, negative equity, bank-owned properties (REO’s) and short sales compared to other areas.

Many local home buyers assume this equates to less desirable neighborhoods but that is a big misconception. Even affluent counties within Livingston County are eligible for the MSHDA program.

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No. The DPA is a 0% interest, non-amoritizing second mortgage that is forgiven (reduced) at 20% per year and discharged at the end of five years provided the homebuyer still owns and occupies the property after five years.

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The Step Forward DPA can be used toward the required down payment, purchase price, closing costs, and pre-paids/escrows on the purchase of a single-family principal residence. The remaining balance of the $15,000, if applicable, must be used to reduce the MSHDA MI Home Loan first mortgage principal balance.


  • MSHDA Lenders may make NEW reservations on Lender Online
  • MSHDA Loans that have already been committed are NOT eligible to transfer to the Step Forward DPA program.
  • MSHDA Lenders may immediately submit a request to transfer their EXISTING reservations or submitted loans to the Step Forward DPA program.

Fact Vs Fiction – Addressing Misconceptions

There are some pretty common misconceptions regarding Michigan’s MSHDA homebuyer assistance programs.  Most people think of MSHDA as downpayment assistance only for first-time homebuyers or low-income purchases. Let’s address some of them here: 

1. They run out of money quickly.FALSE

Funding for the program is sustained through bond issuance & loan payments.

2. Loan approval takes too long.FALSE

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    Complete loan packages are processed in just 2-3 days.    

3. The program is only for low-income buyers. – FALSE

    Income limits range from $62,400 – $123,760.

4. Sales price is too low. FALSE

    Sales price limit state-wide average is $224,500.

5. Only for first-time home buyers.FALSE

Repeat homebuyers can qualify. Also, MSHDA defines a first-time home buyer as anyone who has not owned a home in three years or more.

So if you once owned a home, say five years ago, no longer possess the property and have been renting over the last three years, you can still qualify as a first-time homebuyer under this program.

Program Description:

  • Michigan Down Payment up to $7,500. (Homebuyer Education class required.)
  • Available to first-time homebuyers (have not owned a home in the previous three years) statewide and repeat homebuyers in targeted areas.
  • Household income limits apply and can vary depending on family size and property location.
  • Sales Price limit – $224,500 statewide.
  • Minimum credit score of 640 required or 660 for multiple-section manufactured homes.

Am I Eligible for a MSHDA Mortgage?

MI Home Loan Mortgage – Michigan Down Payment Available!
For first-time homebuyers or repeat buyers in targeted areas.

MI Home Loan Flex Mortgage – Michigan Down Payment Available!
For first-time and repeat homebuyers looking for more flexibility in a mortgage.

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Mortgage Credit Certificate (MCC)
Homebuyer federal tax credit – available for up to 30 years after purchase!

Individual Development Account 
Matched savings account to help low-income families save for homeownership, education, or a business.

Property Improvement Program (PIP)
Home improvement loans for income qualified homeowners.

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New! KW Zero Plus Loan – No Fee Mortgage & Refinance Loans

Housing Education Program 
Housing education, classes and workshops.

Consider MSHDA Competitive Interest Rates: 

The Current Market Rate is 4.5% – 4.75%

    – 30 Yr Fixed Loan = 3.625%

    – 30 Yr Fixed With Downpayment Assistance = 4.375%

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