First-Time Home Buyer & Low Down Payment Loans in Michigan
Buying your first home is easier with a guide. Tania Yatooma, a Swift Home Loans mortgage specialist with more than 10 years of mortgage experience, helps first-time buyers compare 3% down conventional, 3.5% down FHA and $0 down VA and USDA loans, find down payment help and plan exactly how much cash to bring to closing.
- 0–3.5% down options
- Down payment assistance guidance
- Free pre-approval
- Local office in Birmingham
Get Your First-Time Buyer Plan
Tell Tania what you're planning. She'll reply personally, usually the same business day.
- Lowest down payment
- $0 (VA & USDA, if eligible)
- Conventional / FHA
- From 3% / 3.5% down
- MSHDA MI 10K
- Up to $10,000 assistance
- Your mortgage specialist
- Tania Yatooma · 10+ yrs
Four Ways to Buy Your First Home With Little Down
You don't need 20% down to buy in Michigan. Here's how the most common low down payment programs compare. Tania will confirm which ones fit your credit, income and the home you choose.
| Conventional 3% | FHA 3.5% | VA | USDA | |
|---|---|---|---|---|
| Minimum down payment | 3% for eligible buyers | 3.5% (580+ score) | $0 for eligible veterans | $0 in eligible areas |
| Typical credit score | 620+ | 580+ | Set by lender, often 580–620+ | Often 640+ |
| Mortgage insurance | PMI, removable as equity grows | Upfront 1.75% plus annual premium | None; one-time funding fee unless exempt | 1% upfront plus 0.35% annual fee |
| Who it's for | Buyers with solid credit | Buyers rebuilding credit or with higher debt | Veterans, service members, eligible spouses | Moderate-income buyers outside cities |
| 2026 limits (Oakland County, 1-unit) | Up to $832,750 | Up to $541,287 | No VA limit with full entitlement | Income and location limits |
Typical guidelines for general information. Program availability depends on credit, income, property and lender guidelines. More detail: FHA loans, VA loans, USDA areas in Macomb County.
How Much Cash Do You Need for Your First Home?
Enter a price to see the down payment for each program plus an estimate of closing costs. This is the number most first-time buyers actually need to save.
| Program | Down | + Costs |
|---|
Estimate only, not a loan offer. Excludes mortgage insurance, financed fees and reserves. 3% down is for eligible buyers.
Michigan Down Payment Assistance and Other Ways to Cover Costs
Most first-time buyers combine a low down payment loan with one or more of these.
MSHDA MI 10K DPA
- Up to $10,000 statewide
- 0% interest, deferred; repaid when you sell, refinance or pay off the first mortgage
- 640 minimum credit score and homebuyer education class
- Income limits and a $566,355 sales price limit (after June 1, 2026)
Seller concessions
- The seller pays part of your closing costs as part of the deal
- FHA allows up to 6% of the price
- Conventional allows 3% with under 10% down
- VA allows 4% in concessions plus normal closing costs
Gifts, credits & buydowns
- Gift funds from family for down payment and costs
- Lender credits in exchange for a slightly higher rate
- Seller-paid temporary rate buydowns to lower early payments
- Closing later in the month means less prepaid interest
MSHDA program terms from michigan.gov/mshda as of October 2026 and subject to change. MSHDA loans are made through participating lenders; ask Tania whether MI 10K can be used with your loan or which alternatives fit. Concession limits are typical maximums and vary by program details.
The First-Time Buyer Roadmap
- Check your creditPull your free reports, fix errors and keep balances low. A few points can change your rate and options.
- Set a comfortable budgetUse the affordability calculator and remember Michigan property taxes reset after you buy.
- Plan your cash to closeDown payment plus about 2–5% in closing costs. See the closing costs guide.
- Get fully pre-approvedTania reviews income, assets and credit up front so your offer is taken seriously.
- Make an offer and lock your rateOnce your offer is accepted, choose your program and lock.
- Inspection, appraisal and closingTania keeps underwriting moving and tells you exactly what to bring to closing.
Avoid these before closing
- Opening new credit. No new cards, car loans or store financing until after closing.
- Changing jobs without talking to Tania first.
- Large cash deposits you can't document with a paper trail.
- Moving money around. Keep down payment funds where the lender can verify them.
- Co-signing for anyone else's loan.
Good to Know as a First-Time Buyer in Michigan
Taxes reset when you buy
A Michigan home's taxable value uncaps when it's sold, so your taxes are often higher than the seller's. Budget on the new value.
File your PRE
File a Principal Residence Exemption (Form 2368) after you buy to exempt your home from up to 18 mills of school operating taxes.
Two tax bills a year
Michigan sends summer and winter property tax bills. Most first-time buyers pay them through an escrow account with the mortgage.
Sellers usually pay transfer tax
By custom, Michigan sellers pay state and county transfer taxes and the owner's title policy.
First-Time Home Buyer Questions
Who counts as a first-time home buyer in Michigan?
For most first-time buyer programs, including MSHDA's MI Home Loan, you count as a first-time buyer if you haven't owned a home in the previous three years. That means many people who owned a home years ago qualify again. Some programs have no first-time buyer requirement at all.
What is the minimum down payment for a first home in Michigan?
It can be 0%. VA loans for eligible veterans and USDA loans in eligible rural areas can require no down payment. Conventional loans start at 3% down for eligible buyers, and FHA loans start at 3.5%.
How much do I need for closing costs as a first-time buyer?
Buyer closing costs in Michigan typically run about 2% to 5% of the purchase price, on top of the down payment. Seller concessions, lender credits, gift funds and down payment assistance can cover some or all of them. See our Michigan closing costs guide for the details.
What credit score do I need to buy my first home?
Conventional loans typically require a 620 score, and FHA loans can allow a 580 score with 3.5% down. MSHDA's MI 10K down payment assistance requires a minimum 640 score. Lenders can set higher minimums, and a higher score usually means a better rate.
How does MSHDA's MI 10K down payment assistance work?
MI 10K provides up to $10,000 statewide as a zero-interest, deferred second loan that you repay when you sell, refinance or pay off your first mortgage. It requires a 640 minimum credit score, a homebuyer education class, and household income and sales price limits ($566,355 statewide after June 1, 2026). Tania can tell you whether it can be paired with your loan.
Can I use gift money for my down payment?
Yes. FHA, VA, USDA and conventional loans for a primary home allow gift funds from eligible donors, such as family members. The donor signs a gift letter and the transfer must be documented, so talk to Tania before any money moves.
Do I have to pay mortgage insurance with less than 20% down?
Usually. Conventional loans with less than 20% down carry private mortgage insurance (PMI), which can be removed once you reach enough equity. FHA loans carry mortgage insurance premiums, and VA loans have no monthly mortgage insurance.
More Help for First-Time Buyers
Tania helps buyers and homeowners across Oakland County, Macomb County and Southeast Michigan. See all loan programs and service areas.
Ready to Buy Your First Home?
Get a free first-time buyer plan and pre-approval from a local mortgage specialist with 10+ years of experience.