Foreclosure Assistance Michigan: Counseling, Sheriff Sale Rights, and Tax Foreclosure Help

Foreclosure assistance Michigan homeowners can use now

From 2022 to 2023, the Michigan State Housing Development Authority (MSHDA) ran MIHAF with federal pandemic money. It stopped taking applications in December 2023 and the state now describes it as closed because the funds are exhausted. No replacement grant program has been announced. If a website says MIHAF is still open, or asks you to pay to apply, do not trust it. Our Michigan mortgage relief program guide explains what MIHAF covered and why it ended.

That leaves a smaller set of help, but it is real and it is free:

State Emergency Relief is limited. Its home ownership payments are only made when they will save a home from mortgage foreclosure, land contract forfeiture, or tax foreclosure, and the MDHHS manual sets a small lifetime maximum (listed as $2,000 when we last checked). You apply through MDHHS State Emergency Relief or MI Bridges. It works best alongside a servicer plan, not on its own.

Free housing counselors and legal aid

A housing counselor is the person who sits beside you, reads your letters, builds a budget with you, and helps you send your servicer a complete application. In Michigan you can find one three ways: HUD's housing counselor search or its phone line at 800-569-4287, and the state's list of MSHDA housing education agencies, which is organized by county. Michigan State University Extension also has certified counselors in many counties.

Counselors help with mortgages, but they do not give legal advice. If you think your servicer made an error, lost your paperwork, or foreclosed while you were in review, contact legal aid. Michigan Legal Help has a guide-to-legal-help tool that points you to the free legal aid office for your county, plus self-help forms. If you earn too much for legal aid, ask a lawyer about limited scope representation, where you pay for help with only one part of the case.

When you call a counselor, have these ready: your most recent mortgage statement, every letter from your servicer, the last two months of pay stubs or benefit letters, and a short list of monthly bills. That is usually enough for a first meeting.

The mortgage foreclosure timeline, stage by stage

Michigan lets lenders foreclose most mortgages without a lawsuit, using a process called foreclosure by advertisement. Each stage below has its own deadline, and each one still leaves you some choices. The descriptions follow Michigan Legal Help's homeowner guide and federal servicing rules.

Under the federal rule described by the Consumer Financial Protection Bureau, a servicer generally must wait until you are more than 120 days behind before taking the first official foreclosure step. That window is your best chance, because a complete application sent early gives you added protections, including limits on moving to a sale while it is being reviewed.

Options before the sheriff's sale

Until the sale happens, the home is still yours, and you have the widest range of choices. Most people who keep their homes do it here.

Ways to keep the home

• Reinstate. Pay every missed payment plus late fees and costs in one amount. Ask the servicer for a written reinstatement quote with a good-through date.
• Repayment plan. Pay your normal payment plus an extra amount each month until you catch up. This fits a short, past hardship.
• Forbearance. Payments are lowered or paused for a few months, then repaid later. Get the repayment terms in writing before you agree.
• Loan modification. The loan terms change, often by adding missed payments to the balance or lengthening the term, so the monthly payment fits your budget.
• Partial claim or deferral. FHA, VA, USDA, Fannie Mae, and Freddie Mac loans may move missed payments into a separate, interest-free balance due when the loan ends or the home is sold. Ask which investor owns your loan.

Ways to leave without a foreclosure sale

• Sell the home if you have equity. Even a few weeks before the sale, a signed purchase agreement may persuade the servicer to postpone.
• Short sale if you owe more than the home is worth, with the servicer's approval.
• Deed in lieu of foreclosure, where you hand the home back. Ask in writing whether any remaining balance will be forgiven.

If the home sells at the sheriff's sale for less than you owe, the lender may be able to sue you for the difference, called a deficiency. A short sale or deed in lieu can sometimes include a written release of that balance, which is one reason to talk to a counselor before you give up.

Your redemption period after the sale

Michigan gives homeowners something many states do not: a statutory right to buy the home back after the sheriff's sale. This is called redemption. To redeem, you pay the amount bid at the sale, plus certain fees and interest from the sale date. The exact payoff figure is in the sheriff's deed paperwork at your county Register of Deeds.

How long you have depends on the property and the loan. For most owner-occupied homes of one to four units, the period is six months. Michigan law gives a longer period, up to one year, in some cases, such as when less than two-thirds of the original loan amount was still owed at the time of foreclosure, and on some farm property. If the home is found to be abandoned, the period can be much shorter. Because these rules depend on details, rely on the redemption date written on your certificate of sale, and ask legal aid to check it if you think it is wrong.

Redeeming is not the only use of this time. Many families use it to sell the home themselves, which can keep any equity that would otherwise be lost, or to negotiate a cash-for-keys agreement, where the buyer pays you to move out early and leave the home in good condition.

Living in the home during redemption

You may stay in the home during the redemption period, and you do not have to make mortgage payments. The buyer at the sale, usually the lender, does have some rights during this time, according to Michigan Legal Help:

• Inspections. The buyer can inspect the outside and, with at least 72 hours' notice at a reasonable time, the inside of the home. Unreasonably refusing an inspection can lead to an eviction case.
• Condition questions. After an inspection, the buyer can ask about the home's condition, but not more than once a month or three times in six months unless damage is suspected. You have five days to answer.
• Damage. If the buyer finds or expects damage beyond normal wear and tear, such as stripped copper or missing major systems, it must give you seven days' notice before starting an eviction case, and it can sue you for the damage.
• Moving out. If you plan to leave before the deadline, tell the buyer at least 10 days ahead, using a method you can prove, like certified mail or email.

If you are still in the home when redemption ends, the new owner can file an eviction case. These cases are hard to defend unless the foreclosure itself had a problem. If a judge orders you out, you usually have 10 days to move. Contact legal aid as soon as you get court papers.

County tax foreclosure in Michigan

Many Michigan homeowners who lose a house never miss a mortgage payment. They fall behind on property taxes, often after the mortgage is paid off and there is no escrow account. This process is run by the county treasurer, or in a few counties by the State Treasurer, not by a bank.

The MSU Law tax clinic describes it as a three-year process. Taxes you do not pay become delinquent, the property is treated as forfeited to the county treasurer after two years of unpaid tax, and you generally have until March 31 of the third year to pay before the foreclosure becomes final and the county can sell the home. Interest and fees grow at each stage, so the earlier you call, the less you owe.

Ways to stop a tax foreclosure include paying the oldest years first, asking the treasurer about a payment plan or hardship extension (counties are not always required to offer one), and applying to your city or township assessor for the poverty exemption, which can lower or remove the current year's tax for low-income owners. In counties that have opted in, the Pay As You Stay program may reduce delinquent taxes for owners who qualify for the poverty exemption. Seniors and people with fixed incomes can also see our senior property tax relief guide.

Claiming leftover money after a tax sale

For years, Michigan counties sold tax-foreclosed homes and kept everything above the tax debt, even when the home was worth far more than the taxes owed. That changed on July 17, 2020, when the Michigan Supreme Court ruled in Rafaeli v. Oakland County that keeping the surplus was an unconstitutional taking. The Legislature then created a claim process, and in May 2023 the U.S. Supreme Court reached a similar result nationwide in Tyler v. Hennepin County. In July 2024, in Schafer v. Kent County, the Michigan Supreme Court said the Rafaeli rule also reaches some older foreclosures, so owners who lost a home before 2020 should ask legal aid whether they still have a claim.

The process has strict dates, and missing one can end your claim. Based on Michigan Legal Help's guide to leftover money:

1. File Form 5743 by July 1. The Notice of Intention to Claim Interest in Foreclosure Sales Proceeds must reach the foreclosing governmental unit by the July 1 after the foreclosure became final. Get it notarized, keep a copy, and send it by certified mail with a return receipt or deliver it in person.
2. Watch for Form 5744 by January 31. After the home is sold, the county or state sends a notice saying whether there is leftover money and how to file your court motion.
3. File a motion between February 1 and May 15. The motion goes to the circuit court that handled the foreclosure. Michigan Legal Help has a do-it-yourself tool for this step.
4. Go to the hearing. Bring proof you owned the home before the foreclosure.
5. Get paid. If the judge awards you money, the foreclosing unit must pay within 21 days.

The county can subtract the unpaid taxes, interest, fees, and certain sale costs before anything is left for you, and mortgage lenders or other lien holders may also claim part of it. Be careful with companies that offer to file for you in exchange for a large share of the money. The forms are free, and legal aid can help.

Bankruptcy, land contracts, and other situations

Chapter 13 bankruptcy. Filing for bankruptcy creates an automatic stay that pauses most foreclosure and collection actions. In a Chapter 13 case, you can often spread missed mortgage payments over a three- to five-year plan. It costs money, affects your credit, and has strict rules, so speak with a bankruptcy attorney or legal aid first.

Land contracts. If you are buying on a land contract, the seller usually uses forfeiture or a court foreclosure instead of a sheriff's sale. The notice periods and rights are different, so get legal advice early.

Veterans and service members. VA-backed loans have their own help options, and active-duty borrowers have extra protections. See our guide to foreclosure assistance for veterans.

Heirs. If the homeowner died and you live in the home, tell the servicer and the county treasurer right away. Servicers must communicate with confirmed successors in interest, and the probate court process may need to start before you can apply for help.

Spotting a foreclosure rescue scam

People with public sale notices often get letters and calls from companies promising to save the home. Warning signs, as described by the CFPB, include an upfront fee, a promise that the home will be saved, advice to stop paying or talking to your servicer, and any request to sign over your deed. Legitimate counselors and legal aid do not charge you to help avoid foreclosure.

Related guides

• Michigan mortgage relief program
• Emergency help with mortgage payments
• Michigan assistance programs
• Unclaimed money in Michigan

Frequently asked questions

This guide is general information, not legal advice. Foreclosure deadlines depend on your loan, your property, and your county, so confirm dates with your servicer, the Register of Deeds, your county treasurer, or a lawyer. National Relief Program is an independent website and is not affiliated with MSHDA, MDHHS, HUD, any county, or any lender.