Michigan Mortgage Guide 2026
This Michigan mortgage guide covers everything you need to know about getting a mortgage in Michigan — FHA loan limits, MSHDA down payment assistance, property taxes, closing costs, and the 2026 Michigan housing market outlook.
Michigan Mortgage Guide: Loan Limits (2026)
Unlike many states, Michigan has no HUD-designated high-cost counties for 2026 — all 83 counties sit at the national FHA floor and the standard national conforming loan limit applies statewide.
| County | Conforming Limit | FHA Limit | Notes |
|---|---|---|---|
| Wayne (Detroit) | $832,750 | $541,287 | National floor |
| Oakland | $832,750 | $541,287 | National floor |
| Macomb | $832,750 | $541,287 | National floor |
| Kent (Grand Rapids) | $832,750 | $541,287 | National floor |
| Washtenaw (Ann Arbor) | $832,750 | $541,287 | National floor |
| Ingham (Lansing) | $832,750 | $541,287 | National floor |
| Kalamazoo | $832,750 | $541,287 | National floor |
| Genesee (Flint) | $832,750 | $541,287 | National floor |
| Ottawa | $832,750 | $541,287 | National floor |
| All other Michigan counties (74) | $832,750 | $541,287 | National floor |
Every Michigan county is at the national FHA floor for 2026. All 83 counties are set at $541,287 for a 1-unit property, with no HUD-designated high-cost areas statewide, per HUD Mortgagee Letter 2025-23. Always verify your specific county at HUD’s official FHA limit lookup tool, and confirm conforming limits at FHFA’s conforming loan limit page.
Loan Programs Available in Michigan
All major federal mortgage programs are available statewide in Michigan. Here’s how each compares for Michigan buyers:
| Program | Min Down Payment | Min Credit Score | Best For |
|---|---|---|---|
| FHA | 3.5% | 580 | First-time buyers, lower credit scores |
| VA | 0% | 580–620 | Veterans, active duty, surviving spouses |
| USDA | 0% | 640 | Rural Michigan buyers meeting income limits |
| Conventional | 3–20% | 620 | Strong credit, wants PMI cancellation |
| MSHDA MI Home Loan | Varies | 640 | First-time buyers statewide + repeat buyers in targeted areas, paired with MI 10K DPA |
MSHDA MI Home Loan & MI 10K DPA
MSHDA (Michigan State Housing Development Authority) offers the MI Home Loan mortgage product paired with the MI 10K DPA — a flat, statewide down payment assistance loan structured as a 0% interest, deferred-payment second mortgage.
| Feature | Detail |
|---|---|
| DPA amount | Up to $10,000, available statewide |
| Structure | 0% interest, no monthly payment, deferred second mortgage |
| Repayment | Due when the home is sold, refinanced, the first mortgage is paid off, or the home is no longer owner-occupied |
| Pairing requirement | Must be combined with an MSHDA MI Home Loan through a participating lender |
| Min credit score | 640 |
| Sales price limit | $566,355 statewide (after 6/1/2026) |
| Income limits | Vary by household size and property location — confirm with a participating lender |
| First-time buyer required? | Required statewide; repeat buyers may qualify only in targeted areas |
| Homebuyer education | Required for all borrowers via the MSHDA Housing Education Locator |
MI 10K DPA has no monthly payment and no interest. Because it’s a flat $10,000 figure rather than a percentage of the loan, it covers a larger share of the down payment on lower-priced Michigan homes than on higher-priced purchases. Confirm current terms and find a participating lender at michigan.gov/mshda.
Michigan Property Taxes
Michigan’s effective property tax rate runs roughly 1.3%–1.5% statewide (estimated) — higher than the national average, though Michigan’s Proposal A limits how quickly a homeowner’s tax bill can rise while they own the home.
Under Proposal A (1994), a property’s taxable value can only increase by the lesser of 5% or the rate of inflation each year, even if the market value rises faster. When a property sells, the taxable value “uncaps” and resets to the assessed value (roughly 50% of market value) the following year — which is why buyers should expect their first full-year tax bill to differ from the seller’s prior bill.
| Purchase Price | Est. Annual Tax (1.4%) | Monthly Escrow |
|---|---|---|
| $200,000 | ~$2,800 | ~$233/mo |
| $300,000 | ~$4,200 | ~$350/mo |
| $400,000 | ~$5,600 | ~$467/mo |
| $500,000 | ~$7,000 | ~$583/mo |
Michigan Principal Residence Exemption (PRE): Owner-occupants can file a PRE affidavit (Form 2368) with their local assessor to exempt their home from the 18-mill school operating tax — a meaningful reduction. This exemption is not automatic; buyers must file it after closing to receive the reduced rate the following tax cycle.
Closing Costs in Michigan
Michigan closing costs include a combined state and county real estate transfer tax — typically paid by the seller — alongside standard lender and title fees. Closings are commonly handled by title companies.
| Fee | Typical Amount | On a $300,000 Purchase |
|---|---|---|
| Loan origination fee | 0–1% of loan | $0–$3,000 |
| Lender’s title insurance | Based on loan amount | ~$700–$1,200 |
| Owner’s title insurance | Based on purchase price | ~$900–$1,500 |
| Closing/settlement fee | Charged by title company | ~$400–$900 |
| Appraisal | Paid upfront or at closing | ~$500–$700 |
| Recording fee | Per document, county-set | ~$30–$60 |
| Homeowner’s insurance (prepaid) | First year premium | ~$900–$1,600 |
Transfer tax note: Michigan’s combined state and county real estate transfer tax is $4.30 per $500 of sale price (≈0.86%), customarily paid by the seller. On a $300,000 sale, that’s roughly $2,580. Always confirm exact fees with your title company before closing.
Michigan Housing Market Overview (2026)
Michigan’s housing market varies significantly by region — from the Detroit metro’s ongoing recovery and revitalization to competitive university towns and quieter rural and northern markets.
| Area | Market Notes |
|---|---|
| Detroit / Wayne County | Wide range of price points; certain neighborhoods have seen significant investment and rising demand |
| Oakland & Macomb Counties | Established Detroit-area suburbs; steady demand, generally higher price points than Wayne County |
| Grand Rapids / Kent County | One of Michigan’s more competitive markets; strong job growth has driven sustained demand |
| Ann Arbor / Washtenaw County | University-driven market with higher price points and higher USDA income limits than most of the state |
| Lansing / Ingham County | State capital market; steady demand tied to government and university employment |
| Northern Michigan & rural counties | More affordable; seasonal/vacation demand in areas like Traverse City affects local inventory |
