Michigan Mortgage Guide

$269,972 median — that's 36% below the national average, and it's real. You can actually buy a livable house here without a jumbo loan or a trust fund.

But here's what catches people off guard: the property taxes. At 1.54% — well above the national average of 1.1% — you're looking at roughly $4,150 a year on a median-priced home. That gap between sticker price and carrying cost surprises almost everyone who moves from a cheaper-tax state.

Detroit proper is still genuinely cheap, some neighborhoods under $100K. Ann Arbor is a completely different story — median closer to $450K, driven by University of Michigan demand. Grand Rapids sits somewhere in between, around $280–320K, and has gotten noticeably more expensive over the last few years.

The one that surprises buyers: Ferndale. It's a Detroit suburb, close-in, walkable, good bones — and people expect it to be cheap because it's "near Detroit." It's not. You'll find yourself competing for $350K houses in a seller's market, which is exactly where Michigan is right now.

And it is a seller's market. Don't show up expecting to negotiate much, especially in Ann Arbor or the better Grand Rapids neighborhoods. The MSHDA Down Payment Assistance program can give you up to $10,000 toward your purchase — genuinely useful here given how fast you need to move when something good hits the market.

The thing most people don't realize until they're already in the process: Michigan's main program is genuinely good, but the money goes fast. Like, it can run out mid-year. If you're planning around it, build in flexibility.

The Michigan State Housing Development Authority (MSHDA) runs the MI Home Loan program, and it's the one you actually want to know about. You get a 30-year fixed-rate mortgage at a below-market interest rate — and paired with that, up to $10,000 in down payment assistance. That DPA comes as a zero-interest second loan, meaning no monthly payments on it, but it doesn't disappear. You pay it back when you sell, refinance, or pay off the first mortgage. Some people are surprised by that. It's not a grant.

The income limits vary by county and household size, so what qualifies you in Marquette might not work in Oakland County. Home price limits exist too. And you have to use an MSHDA-approved lender — you can't just walk into any bank. There's a list on their site.

Detroit, Grand Rapids, Lansing — these metros are all covered, and some even have city-level programs layered on top. Grand Rapids has run local DPA initiatives before, though availability fluctuates.

First-time buyer requirement applies (or you haven't owned in the last three years). Credit minimums hover around 640, though lenders can add their own overlays.

Programs and funding levels change, sometimes mid-year, so verify current terms directly at michigan.gov/mshda before you count on anything.

The big one: Michigan has a 6-month statutory redemption period after foreclosure. That sounds like a buyer's problem, but it absolutely affects you when you're purchasing a property that went through foreclosure recently. The previous owner technically has the right to come back and reclaim it during that window, which means distressed properties in places like Detroit or Flint can sit in legal limbo longer than you'd expect. Title companies know this, but it's worth asking specifically if any home you're buying had a foreclosure in its recent history.

And the transfer tax is genuinely annoying. Michigan charges $3.75 per $500 of sale price at the state level, plus counties tack on another $1.10 per $500. On a $350,000 home in Grand Rapids, you're looking at roughly $3,360 just in transfer taxes - and unlike some states, the seller typically pays this, but it affects negotiating dynamics. Sellers factor it in.

One thing people miss: the Michigan State Housing Development Authority (MSHDA) runs a down payment assistance program that gives you $10,000 as a zero-interest second loan. Not a grant - you'll pay it back eventually - but it's real money and genuinely usable in most Michigan counties.

The thing nobody tells you about Michigan property taxes: your taxes are calculated based on the taxable value, not the sale price — but the moment you buy, the taxable value gets "uncapped" and jumps to match the state equalized value (basically half the assessed value). For longtime owners, that gap can be enormous. The previous owner might've been paying taxes on a taxable value of $90K while the home is assessed at $180K. You buy it, and suddenly you're paying on the full $180K. Budget for that reset before closing, not after.

And file for your Principal Residence Exemption (Michigan's homestead exemption) by June 1st or November 1st — whichever comes first after you move in. Miss it and you'll pay the non-homestead millage rate for the entire year. That's a real dollar difference, not a rounding error.

The gotcha that catches out-of-state buyers: basement water intrusion is everywhere in Michigan, especially around Detroit and Lansing, and sellers aren't always required to disclose past flooding if they frame it as "resolved." A general inspector will often miss it. Get someone who specifically checks drain tiles and sump pump history — and ask for the sump pump's age upfront.