Buying your first home in Washtenaw County can feel out of reach when the down payment and closing costs stack up. If you are wondering how people make the leap, you are not alone. The good news is that you have real options, from statewide loans with down payment help to local programs that reduce upfront costs. In this guide, you will learn what is available, how to qualify, and the steps to apply with confidence. Let’s dive in.

Program options at a glance

Local down payment and closing cost help

• Cities and the county often provide assistance as a second loan, forgivable loan, or deferred lien to cover part of your down payment and closing costs.
• Funding can be limited and may open in cycles, so timing matters.

State housing authority programs

• The Michigan State Housing Development Authority (MSHDA) offers fixed-rate mortgages and down payment assistance through approved lenders.
• Many local programs are designed to work alongside MSHDA loans.

Federal and conventional loan options

• FHA, VA, and USDA loans can offer low down payment routes, each with specific eligibility.
• Conventional low-down-payment options, including lender products tied to Fannie Mae or Freddie Mac, can sometimes be layered with local assistance.

Nonprofit and community partners

• Organizations like Habitat for Humanity of Huron Valley may provide affordable homeownership opportunities, sweat-equity models, and education.

Lender and employer incentives

• Some banks, credit unions, and employers offer first-time buyer grants or special underwriting that complements other aid.

Who offers help locally

Use this list to focus your research and outreach. Program names and rules change, so always confirm details on the agency’s official page or by phone.

• Washtenaw County Office of Community & Economic Development (OCED): Countywide homebuyer assistance and rehabilitation programs.
• City of Ann Arbor: Housing and community services that may include first-time buyer support.
• City of Ypsilanti: Community and economic development initiatives that may include buyer incentives.
• Michigan State Housing Development Authority (MSHDA): State mortgage products and down payment assistance available through approved lenders.
• Habitat for Humanity of Huron Valley: Affordable homeownership pathways and buyer education for qualifying households.
• HUD-approved counseling agencies: Pre-purchase education, credit coaching, and help navigating applications.

Eligibility basics to know

Most programs share common rules. The specifics vary, so verify for your household size and property type.

• First-time buyer definition: Often defined as not owning a home in the past three years. Some programs make exceptions for certain life changes, veterans, or single parents.
• Income limits: Typically tied to Area Median Income and adjusted by household size. These caps keep aid targeted to moderate and low incomes.
• Purchase price caps: Many programs limit the maximum eligible purchase price.
• Primary residence: You must live in the home as your primary residence. Investment properties are usually ineligible.
• Homebuyer education: A class or counseling session is commonly required before closing.
• Credit and debt-to-income: Minimum credit standards apply. Some programs allow more flexibility when you complete counseling.
• Property standards: The home must meet appraisal and safety standards. Some property types or needed repairs may be restricted.
• Repayment terms: Assistance can be forgivable after a set number of years, deferred until you sell or refinance, or a low-interest second mortgage with payments. Ask about any recapture rules.

How to apply step by step

Follow a simple, organized path to keep your purchase on track.

1. Start with education

   • Take a HUD-approved homebuyer education class or schedule counseling. You will learn budgeting, credit steps, and how programs work.

2. Choose the right lender

   • Contact lenders that actively work with MSHDA and local Washtenaw County assistance. Ask what programs they can layer with your mortgage.

3. Confirm program fit

   • Reach out to OCED and your city housing office to confirm current funding, income limits, price caps, and application windows.

4. Apply for assistance

   • Some programs require a separate application and documentation. Your lender may also submit program forms with your loan.

5. Shop within guidelines

   • Search for homes that meet purchase price caps and property standards, then write offers with realistic timelines for DPA approval.

6. Underwriting and approvals

   • Your lender processes the mortgage while the DPA provider verifies eligibility, education completion, and records any second lien.

7. Close with confidence

   • Assistance funds are typically issued at or before closing. Build in extra time for approvals compared to a standard closing.

How programs pair with mortgages

• FHA: Often compatible with local and state down payment assistance, helpful if your credit score is still building. Mortgage insurance applies.
• VA: For eligible veterans and service members, typically allows low or no down payment. Some DPAs can still be layered, lender rules apply.
• USDA: For eligible rural areas, offers zero down for qualified buyers. Check property eligibility and program compatibility.
• Conventional low-down options: Lenders may use Fannie Mae or Freddie Mac products with local DPA. Mortgage insurance and income limits may apply.

Compatibility depends on the exact assistance program and your lender’s participation. Ask your loan officer to confirm the pairing before making an offer.

Pros, cons, and risks

Pros

• Reduces your upfront cash need, which can make homeownership possible sooner.
• Can be combined with fixed-rate mortgages to keep payments predictable.
• Education and counseling help you plan for long-term costs.

Cons

• Second liens or deferred loans can reduce your net proceeds when you sell.
• Some programs limit renting the property or include resale restrictions.
• Limited funding can mean waitlists or deadlines that affect timing.

Risks to watch

• Triggers that require repayment when you sell or refinance.
• Shared appreciation or recapture rules that impact equity.
• Property condition issues that delay approval or closing.

Smart tips to strengthen your file

• Work with experienced partners: Choose a lender who regularly closes MSHDA and local DPA loans in Washtenaw County.
• Get your education certificate early: It can speed up approvals later.
• Document everything: Keep pay stubs, bank statements, and identification ready to go.
• Clarify the fine print: Ask for written details on forgiveness schedules, lien position, and resale restrictions.
• Check funding status first: Confirm current income limits, price caps, and available funds before you sign a purchase contract.
• Compare lenders: Rate, fees, and DPA familiarity can vary.

What to do this week in Washtenaw

• Attend a HUD-approved class or counseling session to understand the full costs of ownership and strengthen your application.
• Call Washtenaw County OCED to ask about current first-time buyer assistance and how to apply.
• Contact the housing offices for Ann Arbor and Ypsilanti to check for city-administered programs.
• Get prequalified with an MSHDA-participating lender and ask which DPA options they can combine with your mortgage.
• Gather your documents and start a checklist for deadlines and required forms.

We can help you get started

You do not need to navigate this alone. Our team helps first-time buyers across Ann Arbor, Ypsilanti, Saline, Dexter, and Chelsea align the right mortgage and assistance with the right home. We coordinate education, lender introductions, and timelines so your offer and closing stay on track. If you want a local guide who understands the programs and the neighborhoods, reach out to Christine Faeth, The Faeth Team.

FAQs

What is considered a first-time buyer in Washtenaw County?

• Many programs define it as not owning a home in the past three years, with some exceptions for life changes or service members; confirm the definition for the program you choose.

How much down payment assistance can I get in Washtenaw County?

• Amounts vary by program, sometimes a fixed dollar amount, sometimes a percentage of the price, so check current limits and funding status with each provider.

Do I have to repay down payment assistance later?

• Terms differ, some aid is forgivable after a set period, some is deferred until sale or refinance, and some is a low-interest second mortgage with payments.

Can I combine DPA with FHA, VA, USDA, or conventional loans?

• Often yes, but it depends on the exact assistance program and lender participation, so confirm compatibility before writing an offer.

Will using DPA affect my interest rate or mortgage insurance?

• Assistance itself typically does not change your mortgage rate, but your loan product and down payment level can affect mortgage insurance costs.

How long does it take to close with DPA in Washtenaw County?

• Allow extra weeks beyond a standard mortgage timeline because assistance programs add eligibility review and funding steps before closing.

What if my credit score needs work before I buy?

• HUD-approved counseling can help you improve credit and budgeting, and some programs allow more flexible credit thresholds when education is completed.