Terms Real Estate
Back to Buyers HubFirst-Time Homebuyer
FIRST-TIME HOMEBUYER

Your First Home Starts With a Plan.

Understand what you can afford, uncover programs you may qualify for, and move from preparation to keys with a clear path.

Check My Buying Power

Calculate monthly payments, debt ratios, and down payment targets.

Find a Home

Search vetted Michigan homes, starter properties, and new inventory.

Verified Michigan grant programsTransparent lender alignmentDedicated fiduciary buyer representation
Michigan family celebrating first-time homeownership on the porch of their new home
FIRST-TIME HOMEOWNERSHIP IN MICHIGAN

From Preparation to Pride of Ownership

Buying your first home is one of the most significant milestones of your life. We pair realistic financial planning with patient, dedicated representation so you can step across your threshold with confidence.

FIRST-TIME ROADMAP

From Preparation to Keys

Clear milestones, sound budgeting, and transparent representation every step of the journey.

1
Step 01

Review finances and credit

Check credit reports, reduce revolving balances, and organize income documentation.

2
Step 02

Explore assistance/programs

Identify MSHDA down payment grants, tax credit certificates, and local homebuyer incentives.

3
Step 03

Establish mortgage range

Work with approved lenders to determine comfortable monthly debt service and pre-approval.

4
Step 04

Shop and negotiate

Tour vetted Michigan homes, evaluate neighborhood value, and write protective purchase offers.

5
Step 05

Close and take possession

Complete title escrow, final home inspection walkthrough, sign deed papers, and receive keys.

Official Source Verification

THE RULES ARE ON YOUR SIDE

Real advantages. Official sources. No guesswork.

Michigan and federal programs, tax rules, and homeowner benefits that may help make your first purchase easier.

Terms Real Estate monitors authoritative government sources for statutory laws, tax provisions, homeowner protections, and active programs that may benefit Michigan homebuyers. Program availability, eligibility, and rules apply. Not every benefit is automatically available to every buyer.

Mortgage Tax Credit·Federal Tax Rule
Verified Active

MSHDA Mortgage Credit Certificate

Potential Mortgage Tax Savings

Qualified first-time homebuyers statewide may be eligible for a Mortgage Credit Certificate that provides a federal income-tax credit equal to 20% of annual mortgage interest paid, subject to program requirements and tax liability.

Good to know

MCC must be applied for and approved before buying the home through an approved lender. Tax liability limits apply; this does not guarantee tax savings.

✓Verified by Michigan State Housing Development Authority (MSHDA)·Sep 4, 2026
Official source citation: MSHDA / IRS Section 25
View Official Source
Down Payment Assistance·State Program
Verified Active

MI 10K Down Payment Assistance

Help With Upfront Costs

Eligible homebuyers may receive up to $10,000 toward qualifying down payment, closing-cost, and prepaid expenses through an interest-free deferred DPA loan.

Good to know

Eligibility and MI Home Loan requirements apply. This is not automatic approval and is not exclusive to every first-time buyer.

✓Verified by Michigan State Housing Development Authority (MSHDA)·Sep 4, 2026
Official source citation: MSHDA MI Home Loan Program
View Official Source
Retirement Savings Rule·Federal Tax Rule
Verified Active

IRS First-Time Homebuyer IRA Exception

A First-Home IRA Exception

A qualified first-time homebuyer may generally use up to $10,000 of qualifying IRA distributions for eligible first-home acquisition costs without the usual 10% additional early-distribution tax.

Good to know

IRS guidance generally defines a first-time homebuyer for this provision as someone who had no present ownership interest in a main home during the 2-year period ending on the acquisition date. Standard income tax still applies; distributions are not income-tax free.

✓Verified by Internal Revenue Service (IRS)·Sep 4, 2026
Official source citation: 26 U.S. Code § 72(t)(2)(F) & IRS Pub 590-B
View Official Source
Property Tax Exemption·Michigan Law
Verified Active

Michigan Principal Residence Exemption

A Michigan Homeowner Tax Break

A qualifying Michigan principal residence may be exempt from local school operating millage of up to 18 mills.

Good to know

Ownership, occupancy, timely affidavit filing, and statutory requirements apply. This benefit is not exclusive to first-time buyers.

✓Verified by Michigan Department of Treasury & Michigan Legislature·Sep 4, 2026
Official source citation: MCL 211.7cc
View Official Source
State Income Tax Credit·Michigan Tax Credit
Verified Active

Michigan Homestead Property Tax Credit

Property Tax Relief

Qualified Michigan homeowners and renters may be eligible for a state Homestead Property Tax Credit based on applicable household-resource, residency, occupancy, taxable-value, and annual threshold requirements.

Good to know

Annual household resource limits, taxable value caps, and statutory filing guidelines apply. Annual threshold dollar amounts are determined by state tax rules.

✓Verified by Michigan Department of Treasury·Sep 4, 2026
Official source citation: MCL 206.520 / MI-1040CR
View Official Source
Funding Watch·State Program
Currently Closed

First-Generation DPA Status Watch

Funding Watch

Funding Watch — Terms monitors the official source for a future reopening or successor program.

Good to know

Current official source states program funds are exhausted and applications are no longer being accepted. Historical potential benefit was up to $25,000; not currently available.

✓Verified by Michigan State Housing Development Authority (MSHDA)·Sep 4, 2026
Official source citation: MSHDA First-Generation Down Payment Assistance
View Official Source

Program availability, eligibility, tax treatment, and laws can change. This information is educational and is not legal, tax, lending, or financial advice. Verify eligibility with the responsible agency and qualified professionals before acting.

PREPARATION CHECKLIST

A Few Things Worth Having Ready

Gathering these items early expedites your pre-approval letter and positions your offer ahead of competing buyers.

01

Proof of Income & Employment

Two years of W-2s, recent 30-day pay stubs, or two years of tax returns for self-employed buyers.

02

Liquid Asset Statements

Checking, savings, and retirement account statements verifying earnest money and closing reserves.

03

Credit Profile Diligence

Review tri-merge credit reports for accurate trade lines, low credit utilization, and zero collections.

04

Assistance Eligibility Checks

County median income thresholds and household size guidelines for MSHDA grant matching.

New homeowner holding keys to their newly purchased home

Milestone Achievement

Every preparation milestone brings you one step closer to keys in hand.

Frequently Asked Questions for First-Time Buyers

How much down payment do I actually need for my first Michigan home?

Conventional loans allow as little as 3% down for qualified first-time buyers, while FHA requires 3.5%. With MSHDA Down Payment Assistance (DPA), eligible Michigan buyers can receive up to $10,000 toward down payment and closing costs, dramatically reducing upfront out-of-pocket expenses.

What credit score is required to buy my first home?

MSHDA and FHA programs generally allow credit scores starting at 640 (and in some programs 620). Conventional programs typically perform best at 660+. If your score needs seasoning, our Credit Defense Guide outlines lawful strategies to build your profile.

Can I use assistance funds with conventional or FHA mortgages?

Yes. MSHDA down payment assistance can pair with both 30-year fixed-rate Conventional loans and FHA loans through participating state-approved lenders.

Ready to Take Your First Step?

Speak directly with Josh for experienced buyer representation, or consult Alfred for instant guidance on down payment grants, mortgage ranges, and neighborhood discovery.

Talk to JoshHuman buyer strategy and representation.