Lansing Down Payment Assistance and First-Time Homebuyer Programs

Michigan’s capital and Ingham County’s most populous city, Lansing, offers the best of rich history, cultural attractions, and a thriving economy. Despite being the political center of Michigan, Lansing remains a very affordable city, with the cost of living below the nation’s average. However, housing is quite different, with the average rental price in the city rising to nearly $1,000.

Are you looking to buy a home in Lansing? On this page, we’ll break down home buyer programs that will help you become a home buyer.

Down payment assistance programs in Lansing

Down payment assistance and first time home buyer programs aim to help home buyers make a larger down payment, cover closing costs, or a combination of both. There are several types of home buyer benefits, including grants, forgivable loans, and interest rate reductions and tax credits.

A grant is similar to a scholarship for college. You apply, and if you qualify for the program (i.e. meet all the criteria and the entity still has the money), you can receive funds toward your down payment or for another upfront cost related to your home purchase. 

A down payment loan (or second mortgage loan) is a loan you acquire in order to have the funds for a down payment. Many loan types require a minimum down payment between 3% and 20%. If you don’t have this money saved (many first-time home buyers don’t) then a down payment loan is an option to help you qualify. Some loans are even forgivable if you meet certain requirements like staying in the home for a few years.

Less commonly, some programs come with lower interest rates and tax credits (e.g., mortgage credit certificates) to help lower your monthly payments.

Lansing Down Payment Assistance

To curb high rental prices, the City of Lansing Development Office created the Down Payment Assistance program to help individuals with low to moderate income purchase their first home. This program assistance is a zero-interest loan forgivable after five years for existing homes and 20 years for newly constructed homes. The loan becomes due and payable in full when the house no longer serves as the principal place of residence.

Assistance type: Forgivable Loans

Sponsor: City of Lansing Development Office

Assistance amount: Based on needs and is not to exceed $14,999

Purchase price limit: $182,000 in Ingham County and $201,000 in Eaton County for existing homes;  $273,000 for newly constructed homes.

Minimum borrower contribution: $1,000

Eligibility requirements

• The applicant’s household income must not exceed the maximum income amount for the applicable household size.
• Applicants may use funds for down payment, eligible closing costs, and prepaid items.
• Applicants must attend an approved homebuyer education course.

Statewide down payment assistance programs available in Lansing

Michigan State Housing Development Authority

The Michigan State Housing Development Authority (MSHDA) offers homeownership assistance programs for Michigan residents through the MI Next Home Down Payment Assistance and the MI First Home Down Payment Assistance.

Both programs are zero-interest, non-amortizing loans with no monthly payment and can be used in conjunction. However, the MI Next Home Down Payment Assistance is designed for repeat homebuyers, while the MI First Home Down Payment Assistance is for first-time homebuyers.

Assistance type: Forgivable Loans

Sponsor: Michigan State Housing Development Authority

Assistance amount: $7,500 or 4% of the sales price

Purchase price limit: $224,500

Eligibility requirements

• Applicants must have a minimum credit score of 640 or 660, depending on specific conditions.
• Only qualifying borrowers can apply for the Next Home Down Payment Assistance, while all adults in the household intending to occupy the residence must co-apply for the First Home Down Payment Assistance.
• First-time homebuyers must complete a homebuyers education course.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.