Down payment assistance makes more sense with real numbers than with programme descriptions. Here is how a first-time buyer in Macomb County could combine Michigan’s MI 10K DPA with an FHA loan, step by step. The figures are illustrative; your own costs, income limits and eligibility will differ.
The Buyer and The Programmes
The buyer is a household in Sterling Heights with combined income within MSHDA’s limit for Macomb County, a middle credit score of 655, and $4,500 saved. They are buying a $240,000 home, a typical price for down payment assistance in Macomb County.
MSHDA Down Payment Assistance Requirements
MSHDA’s MI Home Loan requires a credit score of at least 640, a sales price at or below $566,355, household income within the county limit, and a homebuyer education class. The MI 10K DPA, used with the MI Home Loan, provides up to $10,000 toward down payment and closing costs.
FHA Loan Michigan Requirements
A score of 580 or higher allows the minimum 3.5 percent FHA down payment, and the 2026 FHA loan limit for a one-unit home in Macomb County is $541,287. This buyer fits both programs.
Stacking the MI 10K DPA with an FHA loan, Step by Step
Step 1: Size the FHA loan
| Item | Amount |
|---|---|
| Purchase price | $240,000 |
| Minimum down payment (3.5 percent) | $8,400 |
| Base FHA loan amount | $231,600 |
| Upfront mortgage insurance (1.75 percent, financed) | about $4,053 |
| Total loan amount | about $235,653 |
Most buyers roll FHA’s upfront mortgage insurance premium into the loan rather than pay it in cash. Annual mortgage insurance is then paid monthly.
Step 2: Estimate the cash needed
Closing costs in Michigan vary by lender, title company and whether the seller contributes. For this example, we assume $7,200, about 3 percent of the price, including prepaid taxes and insurance. That puts total cash needed at about $15,600 before assistance, against savings of $4,500.
Step 3: Apply the Assistance
The MI 10K DPA covers up to $10,000. Applied first to the $8,400 down payment and then to $1,600 of closing costs, it leaves about $5,600 to find, roughly $1,100 more than the buyer has saved.
Step 4: Close the Remaining Gap
There are three common routes. The buyer can negotiate a seller concession toward closing costs; FHA allows sellers to contribute up to 6 percent of the price. They can use a documented gift from a family member, which FHA permits for both down payment and closing costs. Or they can ask whether a city or county programme can be layered on top, subject to its rules and the lender’s approval.
What the money looks like at closing
| Source | With a family gift | With a 2 percent seller concession |
|---|---|---|
| MI 10K DPA | $10,000 | $10,000 |
| Buyer’s savings | $4,500 | $800 |
| Family gift | $1,100 | $0 |
| Seller concession | $0 | $4,800 |
| Total | $15,600 | $15,600 |
| Savings left as reserve | $0 | $3,700 |
The concession route leaves the buyer with about $3,700 in reserve, often the better outcome for a first-time owner facing the first furnace repair. Either way, these sources should appear on the Loan Estimate and later on the Closing Disclosure.
Three Things To Check Before Counting On Assistance
- The assistance is a second loan, not free money. Confirm the current repayment terms on MSHDA’s site, and what happens when you sell or refinance.
- You must use a lender that participates in MSHDA’s programmes and finish the homebuyer education class before closing. Ask lenders whether they participate in the first conversation.
- The 640 score threshold is firm. At 625 the programme is closed even though FHA would accept the score. If you are close, a rapid rescore after paying down a card balance can sometimes move you over the line within days.
At Sistar Mortgage, this is the arithmetic our loan officers walk first-time buyers through before they shop. Run it with your own price, savings and closing-cost estimate. The order matters more than the figures: confirm eligibility, size the loan, total the cash, then apply the MI 10K DPA with your FHA loan and fill what remains with negotiation or a gift.
