Saving for a down payment is one of the biggest hurdles for Michigan home buyers. The MI 10K down payment assistance program from MSHDA can help eligible buyers cover that gap. This guide explains how the MI 10K DPA loan works and who may qualify.
The short answer: MI 10K is a 0% interest, deferred forgivable loan of up to $10,000 that pairs with the MSHDA MI Home Loan to help with down payment and closing costs. You generally do not make monthly payments on it, and it is forgiven over time if you stay in the home. See our low down payment options page and the first-time home buyer guide for more.
What the MI 10K DPA loan is
The MI 10K program provides up to $10,000 in assistance to eligible buyers who use the MSHDA MI Home Loan as their first mortgage. It is a separate, second loan — not a grant you receive in cash. The funds are applied at closing toward your down payment and certain closing costs.
What the funds can be used for
The assistance can typically be used for:
- Your down payment
- Certain closing costs
- Prepaid expenses required at closing
It cannot be used for anything outside the home purchase transaction.
How repayment works (0% interest, deferred)
The MI 10K loan is deferred and carries 0% interest. That means:
- You usually do not make monthly payments on it while you live in the home.
- It is forgiven on a set schedule (often over a period of years) as long as you remain the owner-occupant.
- If you sell, refinance the first mortgage, or stop living in the home before the forgiveness period ends, you may have to repay the remaining balance.
Always read the exact terms in your closing documents, because forgiveness schedules can change.
Eligibility: first-time buyers, targeted areas, education course
To qualify, you generally must:
- Meet MSHDA's first-time buyer definition (or buy in a targeted area).
- Use the MSHDA MI Home Loan as your first mortgage.
- Meet income and purchase-price limits.
- Complete an approved homebuyer education course.
Requirements can change, so confirm the current rules with a MSHDA-approved lender before you apply.
Pairing DPA with an MI Home Loan
The MI 10K assistance only works alongside the MI Home Loan — you cannot pair it with just any mortgage. Your lender will structure both loans together at closing. Learn how down payments work generally in our guide on how much down payment you need to buy a house.
Common mistakes that delay approval
- Assuming you qualify without checking current income limits.
- Skipping the required homebuyer education course.
- Moving large sums of money around without a paper trail before closing.
- Opening new credit accounts while your loan is in process.
When you are ready, get a free quote or sign up for mortgage rate alerts.
This article is for general information only and is not a commitment to lend. Program details and eligibility depend on MSHDA guidelines. Verify current terms on michigan.gov/mshda before applying.
