The MI 10K DPA Loan, In Detail
Program and regulatory figures verified September 26, 2026. Details change; confirm your scenario with us.
Ten thousand dollars, no interest, no monthly payment. The terms are good and they are also specific, so it is worth reading them properly rather than the summary.
What the $10,000 can pay for
MSHDA describes the MI 10K DPA as assistance toward down payment, closing costs and prepaid expenses. That breadth matters more than people expect. A buyer who already has the down payment can still use the assistance for the closing costs and the escrows, which is often the actual shortfall.
So the useful question is not whether you have a down payment. It is what your total cash to close is, and whether $10,000 covers the gap. Size it against a purchase price.
It is a loan, and that is fine
Michigan calls this what it is. It is a second lien, it is recorded, and it will show on your payoff statement one day. Two features make it behave very differently from a normal second mortgage.
- Interest-free. The balance does not grow. Ten thousand borrowed is ten thousand owed, whether that is next year or in year twelve.
- No monthly payments. It does not appear in your monthly budget at all, and it does not sit in your debt-to-income calculation as a payment.
Compare that with putting the same $10,000 on a conventional second and the difference is the whole point of the program.
The clause most states do not have
MSHDA states that max financing is not required. Read that carefully, because a lot of assistance programs do require it: they will help with the down payment only if you first borrow the maximum the first mortgage allows, which pushes your loan amount and your mortgage insurance up.
Michigan does not. If you have $8,000 of your own and want to use $5,000 of assistance rather than the full $10,000 on a smaller loan, that structure is open to you. Whether it is the better structure depends on your numbers, and that is a conversation rather than a rule.
The three repayment triggers
MSHDA defers repayment until certain events, and lists them as payoff of the first mortgage, the sale or refinance of the home, or when the home is no longer owner-occupied.
| Trigger | Obvious? | Notes |
|---|---|---|
| Payoff of the first mortgage | Yes | Including paying it off early |
| Sale of the home | Yes | Comes off the proceeds |
| Refinance | Mostly | Catches people who refinance for a better rate later |
| Home no longer owner-occupied | No | You still own it. It is still repayable. |
That fourth row is the one to plan around, and it is genuinely different from how Illinois and Ohio write their assistance, where the triggers are a sale or a refinance and nothing else. What owner-occupancy means in practice.
Education, for everyone
MSHDA requires a homebuyer education certificate of completion for all homebuyers on the MI 10K DPA. Not the primary borrower. All of them. If you and your partner are both on the loan, that is two certificates. How to get it done.
Who can use it
Because the assistance must pair with a MI Home Loan, the first mortgage's eligibility rules decide access: first-time homebuyers statewide, repeat homebuyers in targeted areas, 640 minimum credit score, income under the county limit, and a sales price at or under $566,355.
And since 66 of Michigan's 83 counties are targeted in their entirety, the repeat-buyer door is open across most of the state. If you have owned before · the full test.
Frequently asked questions
How much is the MI 10K DPA loan?
Up to $10,000, applied toward down payment, closing costs and prepaid expenses. It is available statewide, it is interest-free, and it carries no monthly payments. It must be combined with a MSHDA MI Home Loan first mortgage, so it is not available behind a mortgage from another source.
Is the MI 10K DPA forgivable?
It is not described as forgivable. MSHDA defers repayment until certain events, specifically payoff of the first mortgage, the sale or refinance of the home, or when the home is no longer owner-occupied. Because the loan is interest-free and carries no monthly payments, the balance does not grow while you live in the home, but the full amount remains owed until one of those events.
Can the MI 10K DPA pay closing costs and not just the down payment?
Yes. MSHDA describes the assistance as going toward down payment, closing costs and prepaid expenses, so a buyer who already has a down payment saved can use it for the closing costs and escrows instead. That is often the real gap, and it means the program is useful to more buyers than the name suggests.
Does the MI 10K DPA require you to take the maximum first mortgage?
No. MSHDA states directly that max financing is not required, which is unusual. Many assistance programs will only help once you have borrowed the maximum the first mortgage allows, which pushes your loan amount and mortgage insurance up. In Michigan you can bring your own funds alongside the assistance instead.
What happens to the MI 10K DPA if I rent out the house?
Renting the home out can end owner-occupancy, and MSHDA lists the home no longer being owner-occupied as one of the events that ends the deferral and makes the assistance repayable. That trigger operates while you still own the property, which is what distinguishes it from the Illinois and Ohio programs, where repayment is driven by a sale or a refinance only. Settle this before closing if a future rental is part of your plan.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal or tax advice. MSHDA program terms, income limits and sales price limits are set by the Michigan State Housing Development Authority and change; figures here carry the date we verified them against MSHDA's published documents. Targeted-area status is determined by MSHDA at city and township level and must be confirmed for the specific address. Loans are subject to borrower and property qualification.