Michigan MI DPA Loan Program Guide

Guide to the Michigan MI DPA Loan Program

The Michigan MI DPA Loan Program offers down payment assistance to eligible homebuyers in Michigan. This program is designed to make homeownership more accessible by helping cover the initial costs of purchasing a home, including down payments and closing costs. For 2025, the program continues to provide financial support to first-time homebuyers and those with moderate incomes, ensuring they have the opportunity to achieve homeownership. Below is a detailed guide to the program, its benefits, and the application process.

1. Program Overview:

• Purpose: The MI DPA Loan Program provides down payment assistance to help make homeownership more affordable for first-time homebuyers and qualifying individuals in Michigan. The program aims to reduce the financial burden of buying a home and make it easier for eligible buyers to secure a mortgage.
• Assistance Amount: Eligible borrowers can receive up to $7,500 in down payment and closing cost assistance. This support helps lower the initial costs of purchasing a home, allowing buyers to retain more of their savings for other needs.
• Loan Structure: The assistance is provided as a second mortgage. The loan is typically deferred and is due when the home is sold, refinanced, or paid off in full. This allows buyers to purchase a home without the immediate obligation of monthly payments on the second mortgage.

2. Eligibility Requirements for 2025:

To qualify for the Michigan MI DPA Loan Program, applicants must meet the following criteria:

• Income Limits: The program is available to homebuyers with moderate incomes. The specific income limits vary based on household size and the location of the property. These limits are updated annually to reflect changes in the cost of living and housing market conditions in Michigan.
• First-Time Homebuyer: The program is primarily aimed at first-time homebuyers, although exceptions may apply for those purchasing in designated areas or for certain groups, such as veterans.
• Credit Score: A minimum credit score of 640 is generally required for applicants. Other financial factors, such as debt-to-income ratio, may also be considered by lenders when reviewing applications.
• Property Requirements: The home must be located in Michigan and serve as the applicant’s primary residence. The property must also meet certain price limits, which vary by location to ensure affordability.
• Homebuyer Education: Applicants must complete a homebuyer education course, which provides essential information on budgeting, mortgage management, and homeownership responsibilities.

3. How to Apply:

The application process for the Michigan MI DPA Loan Program involves the following steps:

• Find a Participating Lender: The program works with a network of approved lenders. You will need to contact one of these lenders to begin your application process. The lender will help determine your eligibility, gather the necessary documentation, and submit your application.
• Required Documentation: Be prepared to provide documents such as proof of income, tax returns, credit history, and a certificate of completion from the homebuyer education course.
• Submit Your Application: After gathering the necessary documentation, submit your application to the lender. The lender will review your application, inform you of your eligibility, and guide you through the next steps of the process.

4. Homebuyer Education Course:

• Mandatory Requirement: All applicants must complete a homebuyer education course. The course provides important insights into the homebuying process and financial planning for homeownership.
• Course Options: The homebuyer education course is available online and in-person. Upon completion, you will receive a certificate, which is required to finalize your loan application.

5. Down Payment Assistance:

• Assistance Amount: The MI DPA Loan Program provides up to $7,500 in down payment and closing cost assistance. This funding helps reduce the amount of money you need to contribute upfront, making homeownership more accessible.
• Deferred Loan Terms: The down payment assistance is provided as a second mortgage, with deferred payments. This means you do not need to make payments on the second mortgage during the term of the loan. The loan is repaid when you sell, refinance, or pay off the primary mortgage.

6. Finalizing the Loan:

• Approval Process: Once your application is approved, your lender will guide you through the next steps, including signing the loan documents and preparing for the closing process.
• Closing Costs: While the MI DPA Loan Program helps with down payments and closing costs, you may still be responsible for other fees related to your home purchase. Your lender will provide a complete breakdown of all the costs involved in your mortgage loan.

Throughout the process, our expert loan officers are here to assist you every step of the way. From your initial application to the final closing, they will ensure you receive the full benefits of the Michigan MI DPA Loan Program, helping you achieve homeownership with confidence and ease.