2025 MSHDA ‘First Generation’ $25,000 Down Payment Assistance Grant

Great news for first generation home buyers in Michigan! MSHDA – The MI State Housing & Development Authority announced that for a short time (until funds are used) they are offering $25,000 in down payment assistance to first generation home buyers who qualify. Borrowers who miss the window for the $25,000 grant may still qualify for the normal $10,000 grant.

A “first generation home buyer” refers to an individual whose parents have not owned a home within the last three years, and they themselves have no prior history of homeownership. The funds provided by this program can be used for closing costs, pre-paid escrows and the down payment itself. The Down Payment Assistance (DPA) funds are not “free” money — it’s a state loan at a zero percent interest rate that is paid back when the house is sold, or the mortgage is refinanced.

 

MSHDA ‘First Generation’ $25,000 Down Payment Assistance Qualifications

This particular program is tailored specifically toward first generation home buyers. By MSHDA’s definition, a first generation home buyer is anyone who has not owned a home in the last three years, and they must use the home as their primary residence. Their parents must not have owned a home in the last three years either. First generation home buyers also include people who have aged out of foster care and those who have been emancipated by court order.

More program requirements include:

• Buyer must have at least 1% into transaction
• $224,500 maximum sales price (this number is set to increase later this year)
• 640 minimum credit score
• Manufactured (double-wide) homes are acceptable
• Buyer must complete an in-person housing education class

 

How Long Will MSHDA $25K Down Payment Assistance Be Available?

MSHDA’s First Generation Home Buyer DPA will only be here for a short time. The program has $8 million dollars funded by the state of Michigan, which is projected to help more than 320 families state-wide. While there is no exact expiration for the program, the loans will be given out on a first-come, first-serve basis to qualifying individuals — so we definitely wouldn’t suggest waiting too long before applying.

That being said, if you miss out on this program, or if you don’t quite meet the qualifications, you may still be eligible for MSHDA’s standard down payment assistance. Their $10,000 DPA offers many of the same benefits without the requirement of being a first generation home buyer.

 

How to Apply for MSHDA Down Payment Assistance

To apply for MSHDA 25k DPA as a first generation home buyer, you should start by talking to a qualified mortgage professional. A Loan Officer will be able to confirm your eligibility, walk you through the specifics of the program, and answer any questions you have along the way. At Treadstone, we have a whole team of mortgage experts that know the ins and outs of this specific program.

Next, you’ll have to submit a mortgage application. This is when your Loan Officer will review any required documents to know where you stand financially. They’ll then give you a clear pre-approval letter, which will give you a budget. Once you’ve got your pre-approval, you’re ready to get connected with a Realtor. You can use someone you know or ask for a referral from your Loan Officer — we work with amazing Realtors every day and can recommend someone fit for your needs. Then you can start shopping for a home!

 

FAQs

How is this program different than other MSHDA down payment assistance (DPA) programs?
While this program is very similar to the MSHDA $10,000 DPA, it offers even more monetary assistance with up to $25,000 up for grabs. With that increase, there is the addition of a major requirement: being a first generation home buyer. Other than that, both the $10,000 DPA and the $25,000 DPA can be used towards the same expenses.

Can the $25K Down Payment Assistance be combined with any other MSHDA programs?
In many cases, yes! MSDHA $25,000 DPA can be combined with the MSDHA FHA, Conventional, and RD Loans. It cannot, however, be compounded with the $10,000 down payment assistance.

Why do I have to take a homebuyer education class?
While homeownership offers many benefits, it also entails a great deal of responsibility. The homebuyer education class is in place not as a barrier for applicants of the program, but as a resource. The goal is to set prospective buyers up for success, not abandoning them with a large commitment. The class aims to not only help buyers get into homes but to help them keep those homes.

 

Down payment requirements, closing costs, and loan amounts are for illustrative purposes only; subject to credit qualification, not all applicants may qualify. Not a commitment to lend. Not affiliated with or endorsed by any government institution. Please contact us for an exact quote and for more information on fees and terms.