Buying your first Michigan home: compare the loan and the assistance

Q: Can I use MI Home Loan if I owned a home before?

It depends on where the home is and how MSHDA (https://www.michigan.gov/mshda/pathway-to-housing/mi-home-loan) defines a first-time buyer. MSHDA treats first-time buyers as people who have not owned a home in the previous three years, and that path is available statewide. Repeat homebuyers may qualify in targeted areas. Confirm the ownership-history rules and whether the property is in a targeted area with a participating lender, because those facts can change the options available to you.

Q: Does Royal Oak qualify as a targeted area?

Not the City of Royal Oak. MSHDA (https://www.michigan.gov/mshda/pathway-to-housing/mi-home-loan)'s June 1, 2026 income and sales-price table lists Royal Oak Township, along with the City of Pontiac and the City of Southfield, as targeted places in Oakland County. The City of Royal Oak falls in Oakland's non-targeted “Rest of County” category. Do not choose the township's category just because the names are similar. Confirm the property's category with a participating lender.

Q: Is the $10,000 assistance free money?

No. MI 10K DPA (https://www.michigan.gov/mshda/pathway-to-housing/mi-10k-dpa-loan) is an interest-free loan of up to $10,000, available statewide when it is combined with a MSHDA MI Home Loan (https://www.michigan.gov/mshda/pathway-to-housing/mi-home-loan), not a grant. MSHDA says repayment is deferred until certain events, such as payoff of the first mortgage, sale or refinance of the home, or when the home is no longer owner-occupied. A homebuyer education certificate is required. Review the current program page and the loan documents.

Start with an affordable payment for your Michigan home, then compare loan programs and assistance. MSHDA’s MI Home Loan is available to first-time buyers statewide and repeat buyers in targeted areas. For this program, first-time generally means you have not owned a home in the previous three years. Work with a MSHDA-participating lender to confirm whether the household and property qualify.

Important information

Program rules, limits, rates, fees, and eligibility can change; confirm them with the relevant agency and a licensed mortgage professional before relying on this information.

Official program references checked November 14, 2026. This is educational guidance, not a loan approval or a rate quote. Program rules change; confirm current requirements with the agency and your loan officer.

Primary references

Key considerations

MI 10K DPA offers up to $10,000 statewide as an interest-free loan for down payment, closing costs, and prepaid expenses. It must be combined with a MSHDA MI Home Loan; it is not a standalone grant.
MSHDA’s MI 10K page states there are no monthly payments. Repayment is deferred until certain events, such as payoff of the first mortgage, sale or refinance of the home, or when it is no longer owner-occupied. Review those terms before accepting assistance.
A homebuyer education certificate is required for all MI 10K DPA homebuyers. Arrange the required education through the program’s approved process rather than assuming any course will qualify.
Compare FHA and conventional financing, including HomeReady where eligible. VA or USDA may also be options when you and the property meet their requirements. Assistance eligibility and mortgage eligibility are separate checks.

Eligibility and questions to review

Non-targeted areas require a first-time homebuyer. Targeted areas may allow first-time or repeat buyers. A city name, township name, or mailing address should not substitute for checking the legal location.
City of Dearborn, Wayne County: targeted; $125,760 for 1–2 persons and $146,720 for 3 or more. Wayne “Rest of County”: non-targeted; $104,800 / $120,520.
Sterling Heights: Macomb “Rest of County,” non-targeted; $104,800 for 1–2 persons and $120,520 for 3 or more. Macomb’s targeted list names Harrison Township and the City of Mt. Clemens, not Sterling Heights.
City of Royal Oak: Oakland “Rest of County,” non-targeted; $104,800 for 1–2 persons and $120,520 for 3 or more. Oakland’s targeted locations are the City of Pontiac, Royal Oak Township, and the City of Southfield. Royal Oak Township is not the City of Royal Oak.
Washtenaw County: the entire county is targeted; $170,760 for 1–2 persons and $199,220 for 3 or more.
Ask a MSHDA-participating lender to confirm household income, property location, the sales price, credit, and any other current program requirements. Meeting one published threshold does not guarantee approval.

Documents to prepare

Photo identification and the income documents the lender requests for your employment or income type
Asset statements showing savings and the source of down-payment and closing funds
Information about debts, housing history, and any other real estate you own
The purchase agreement and property address once you have selected a home
Gift or assistance documentation, and an education certificate when the selected program requires one

Typical process milestones

Compare options before choosing a loan: Review income, debts, savings, the property, and the written loan terms with a loan officer.
Prepare the file: Provide the requested documents and explain gifts, assistance, or changes in employment. An initial review is not final approval.
Complete property and underwriting review: The lender reviews the application, valuation, title, and any outstanding conditions. Timing depends on the file.
Review the closing figures: Confirm cash to close, insurance, taxes, and any assistance repayment terms before signing. Closing depends on all required conditions being met.

Current limits and program details

MSHDA lists a statewide sales price limit of $566,355 after June 1, 2026, and a minimum credit score of 640 for MI Home Loan. This sales price cap is different from an FHA loan limit. Household income limits depend on household size and the property’s location. The examples below come from MSHDA’s Income and Sales Price Limits PDF dated 6.1.2026; check the current table and the property’s legal description with a participating lender.

Talk through your Michigan purchase

Tell Sonic Loans® about your income, savings, and the property you are considering. Ask for a comparison of eligible programs and written cost estimates before choosing.

Talk through your Michigan purchase

Frequently asked questions

Do I have to be a first-time homebuyer for every loan program?

No. FHA-insured loans are not limited to first-time buyers, and some conventional options can also serve eligible repeat buyers. Some state or local assistance programs do have their own first-time or recent-ownership rules, and those rules are separate from the mortgage itself. Ask a loan officer which definition applies to each option you are comparing. A published definition is not an approval.

Can I use MI Home Loan if I owned a home before?

It depends on where the home is and how MSHDA defines a first-time buyer. MSHDA treats first-time buyers as people who have not owned a home in the previous three years, and that path is available statewide. Repeat homebuyers may qualify in targeted areas. Confirm the ownership-history rules and whether the property is in a targeted area with a participating lender, because those facts can change the options available to you.

Does Royal Oak qualify as a targeted area?

Not the City of Royal Oak. MSHDA's June 1, 2026 income and sales-price table lists Royal Oak Township, along with the City of Pontiac and the City of Southfield, as targeted places in Oakland County. The City of Royal Oak falls in Oakland's non-targeted “Rest of County” category. Do not choose the township's category just because the names are similar. Confirm the property's category with a participating lender.

Is the $10,000 assistance free money?

No. MI 10K DPA is an interest-free loan of up to $10,000, available statewide when it is combined with a MSHDA MI Home Loan, not a grant. MSHDA says repayment is deferred until certain events, such as payoff of the first mortgage, sale or refinance of the home, or when the home is no longer owner-occupied. A homebuyer education certificate is required. Review the current program page and the loan documents.

Is the down payment everything I need at closing?

No. The down payment is only one part of the money due at closing. You should also plan for closing costs, prepaid taxes and insurance, and any mortgage-insurance charges paid up front. Seller credits or assistance, if you qualify, can change the cash needed, but they have their own rules. Ask for a written estimate that shows cash to close, and which of those figures can still change.

What should I compare before choosing a first-time loan in Michigan?

Compare the monthly payment, mortgage insurance, total cash to close, and any assistance repayment obligations. FHA, conventional programs such as HomeReady or Home Possible, and MSHDA's MI Home Loan have different rules. Ask a licensed loan officer to compare options for your income and the property, and confirm MSHDA participation before relying on a lender for MI Home Loan or MI 10K DPA.

Can Sonic Loans® help a first-time buyer in Michigan?

Yes. Sonic Loans® is a licensed mortgage lender, NMLS #1955855, and originates loans in Michigan. Confirm current licensing on NMLS Consumer Access. Since 2020, the company has funded 1,200+ loans totaling $280M+. A loan officer can compare first-time options for your income, credit, funds, and property, and give you a written estimate. If you want a MSHDA MI Home Loan, confirm that the lender is a current participating lender. Current program and lender requirements control.

Compare Michigan purchase options

Michigan FHA guide · Michigan first-time buyer guide · Michigan HomeReady guide

By Charlie Shami · NMLS #1097497