Michigan General Contractor License Requirements: The LARA Residential Builder License, the $600 Threshold & the 3-Year Renewal (2026)

If you are planning to run a general contractor business in Michigan, the key thing to understand is that Michigan licenses contractors by property type. For residential work, the state runs a real licensing program through LARA – with education, an exam, and insurance requirements – centered on the Residential Builder license (the credential a general contractor doing homes needs). For commercial work, there’s no statewide license at all, and requirements come from local governments. So the practical question in Michigan is which residential credential fits your work – the full Residential Builder license or the more limited Maintenance & Alteration Contractor license – and whether your projects are residential or commercial. This guide walks through both credentials under current 2026 rules, including Michigan’s distinctive three-year renewal.

Some states leave general contracting to local governments; Michigan runs a structured statewide program for residential work. Nationally, the construction field is large and growing. According to the U.S. Bureau of Labor Statistics (Occupational Employment and Wage Statistics, May 2025), there are roughly 380,360 construction managers, 812,210 first-line supervisors of construction trades, 146,720 construction and building inspectors, and about 1,096,780 construction laborers across the country. Employment of construction managers is projected to grow 9% from 2024 to 2034 – much faster than the average for all occupations.

In Michigan specifically, the BLS reports about 9,620 construction managers (median pay $103,230), 16,660 first-line construction supervisors ($78,180), 3,090 construction and building inspectors ($71,040), and roughly 28,490 construction laborers ($49,590) – a substantial market anchored by metro Detroit, Grand Rapids, and steady residential demand. This guide draws its requirements from the official source: the Michigan Department of Licensing & Regulatory Affairs.

Quick Answer: Do You Need a General Contractor License in Michigan?

For residential work, yes – Michigan requires a Residential Builder license (or a Maintenance & Alteration Contractor license) from LARA for construction or remodeling worth $600 or more. For commercial work, there’s no statewide license. The Residential Builder license is the credential a general contractor doing home construction and remodeling needs.

Michigan’s residential licensing, administered by LARA’s Bureau of Construction Codes under the Michigan Occupational Code (Public Act 299 of 1980), is a genuine program: you must complete 60 hours of prelicensure education, pass a two-part PSI exam (Business & Law plus a Trade exam, 70% each), be at least 18 with a valid Michigan ID and good moral character, and carry insurance. A Residential Builder can build homes from the ground up and act as the general contractor; a Maintenance & Alteration (M&A) Contractor is limited to remodeling, repair, and specific trade categories on existing homes. There’s no statewide commercial general contractor license – commercial work is licensed locally. And Michigan uses an unusual three-year license cycle.

Who Regulates Contractors in Michigan?

Michigan regulates residential contractors at the state level and leaves commercial contracting to local governments:

• Department of Licensing & Regulatory Affairs (LARA), Bureau of Construction Codes: Issues the Residential Builder and Maintenance & Alteration Contractor licenses through the Residential Builders’ and Maintenance & Alteration Contractors’ Board, under the Michigan Occupational Code (PA 299 of 1980, Article 24)
• PSI Services: Administers the licensing exams under contract with LARA
• Local governments: Handle commercial contractor requirements, building permits, and inspections
• LARA trade boards: License electricians, plumbers, and mechanical (HVAC) contractors separately

Key contacts:

• LARA Bureau of Construction Codes: michigan.gov/lara; residential builder licensing
• PSI Exams: the state’s testing provider
• Local building departments: commercial licensing and permits

Because Michigan’s residential program is centralized and its commercial side is local, the practical first step is identifying whether your work is residential (state license) or commercial (local), and which residential credential fits.

Residential Builder vs. M&A Contractor

Michigan offers two residential credentials, and choosing the right one is the first decision.

Residential Builder License

The Residential Builder license is the broad credential. It authorizes you to build, renovate, repair, demolish, or add to residential structures – including single-family homes, two-family dwellings, and combination residential-commercial structures – and to act as the general contractor, coordinating subcontractors and managing the full scope of a project from the ground up. This is the license most general contractors doing home construction need.

Maintenance & Alteration (M&A) Contractor License

The M&A Contractor license is narrower. It covers the repair, alteration, improvement, and demolition of existing residential structures (plus building garages and pouring concrete on residential property), but not new-home construction from the ground up. When you apply, you choose from a set of recognized trade categories (such as carpentry, roofing, siding, concrete, masonry, insulation, and basement waterproofing, among others), and you pass a trade-specific exam for each category you want. Crucially, an M&A license is trade-stamped: you can only contract for or supervise the specific trade categories listed on your license, and performing work outside those categories is treated as unlicensed contracting (MCL 339.2404). It suits remodelers and specialty-trade contractors rather than full-scope builders.

The $600 Threshold

Both licenses are triggered by a low threshold: anyone who contracts with a property owner to do residential construction or remodeling worth $600 or more (including materials and labor) must be licensed. That captures nearly all real residential work. Importantly, you cannot split a contract into smaller pieces to stay under $600 – Michigan treats that as an evasion. There’s a limited exemption for owner-builders working on their own property, but professional contractors doing paid residential work almost always need the license.

Michigan Residential Builder License Requirements

Here’s what LARA requires for the Residential Builder license.

Education, Age & Good Moral Character

Before you can take the exam or submit an application, you must:

• Be at least 18 years old with a valid Michigan driver’s license or state ID
• Demonstrate good moral character
• Complete 60 hours of approved prelicensure education – a requirement since June 1, 2008, delivered through LARA-approved providers. The 60 hours include mandatory minimums in core subjects (at least 6 hours each in areas like Business Management/Estimating/Job Costing, Michigan building codes, and other required topics), with the remaining 18 hours from approved electives

The 60-hour education requirement is a real time investment, but it’s also exam preparation – the coursework covers the construction law, business practices, and building codes the exam tests.

The PSI Exam

After completing your education and submitting your application, LARA authorizes you to test with PSI. The exam is:

• Two parts – a Business & Law section and a Trade section
• 70% passing on each section
• Closed-book – no reference materials in the testing center

The exam covers Michigan building law, construction practices, lien law, and business practices. First-time pass rates run in the range of 55-65%, and many candidates find the Business & Law section the tougher of the two, so prepare thoroughly.

Insurance, Bond & Workers’ Comp

Michigan requires proof of insurance as a condition of licensure:

• General liability insurance: The statutory minimum is $100,000 per occurrence (Michigan Occupational Code, MCL 339.2412). In practice, most builders carry $500,000 to $1,000,000, since owners, general contractors, and local permit offices commonly require higher limits
• Workers’ compensation: Required once you meet Michigan’s employer threshold – generally three or more employees, or one employee working 35 or more hours per week for 13 weeks or more (MCL 418.115)
• Bond: Michigan’s residential licensing generally relies on insurance rather than a universal state surety bond (sources differ on a state bond, and some local jurisdictions require local contractor bonds), so confirm current bonding requirements with LARA and your locality

Proof of coverage must be submitted with your application and kept current throughout the license term – and because Michigan’s term is three years, it’s easy to let a certificate lapse mid-term, so track it.

No State License for Commercial Work

A key point that surprises contractors: Michigan has no statewide commercial general contractor license. The LARA Residential Builder and M&A licenses cover residential work; commercial construction is governed entirely at the local level. Cities like Detroit, Grand Rapids, and Lansing set their own commercial contractor registration or licensing requirements, and every commercial project is subject to local permits and inspections.

So a contractor doing commercial work in Michigan doesn’t get a state license – they meet the requirements of the specific city or county where the project is located. A contractor doing both residential and commercial work needs the state residential license for the residential side and local credentials for the commercial side. Always confirm the commercial requirements with the jurisdiction where you’ll build.

Michigan Contractor Requirements at a Glance

Requirement	Detail
Statewide GC license	Residential only (Residential Builder / M&A); no commercial
Regulator	LARA Bureau of Construction Codes (PA 299 of 1980)
Residential threshold	$600 or more (labor + materials)
Commercial	Licensed locally – no state license
Education	60 hours prelicensure (LARA-approved)
Exam	Two-part PSI (Business & Law + Trade), 70% each, closed-book
Age	18+ with Michigan ID; good moral character
General liability insurance	$100,000 per occurrence statutory minimum (most carry 500K-1M)
Workers’ compensation	Required at employer threshold (3+ employees, or 1 at 35+ hrs/wk)
Renewal	Every 3 years; CE 21 hrs (licensed <6 yrs) / 3 hrs (6+ yrs)
Reciprocity	None

How to Get a Michigan Builder License: Step by Step

Here is the practical path to a Residential Builder (or M&A) license.

Step 1 – Complete 60 Hours of Prelicensure Education

Enroll with a LARA-approved provider and complete the 60-hour prelicensure course, covering the mandatory subject minimums plus electives. Keep your certificate of completion – you’ll need it to apply.

Step 2 – Apply to LARA

Submit your Residential Builder or M&A application to LARA (online through the licensing portal or by mail) with your prelicense certificate, a copy of your Michigan ID, and the license fee. For an M&A license, select your trade categories.

Step 3 – Pass the PSI Exam

Once LARA authorizes you to test, schedule with PSI and pass the two-part exam (Business & Law plus Trade) at 70% each. The exam is closed-book, so study the building code, lien law, and business material thoroughly.

Step 4 – Set Up Insurance & Workers’ Comp

Obtain general liability insurance (at least the $100,000 statutory minimum, though 500,000-1,000,000 is typical), and set up workers’ compensation if you meet the employer threshold. Submit proof of coverage.

Step 5 – Receive Your License

Once your education, exam, application, and insurance are in order, LARA issues your license for a three-year term. You’re then authorized to contract for residential work statewide.

How Much Does a Michigan Builder License Cost?

Cost Item	Amount
Prelicensure education (60 hours)	Reported ~400-600
Application / license fee (3-yr)	~195ResidentialBuilder(50 app + 145license);~135 M&A ($50 + $85)
PSI exam fee	Reported ~$150
General liability insurance	Premium – varies ($100K minimum; most carry 500K-1M)
Workers’ compensation	Premium – varies (at employer threshold)
Continuing competency (renewal)	Course costs each 3-year cycle

All-in, the fees to get licensed are moderate – the 60-hour course (reported around 400-600), the application/license fee (reported around $195 for a Residential Builder – a $50 application fee plus a $145 license fee covering the 3-year term – or about $135 for an M&A license), and the ~$150 PSI exam. First-year costs including insurance commonly land around 2,000-3,500. Your larger ongoing costs are general liability insurance and workers’ compensation premiums. Because fees are periodically adjusted, confirm the current amounts at michigan.gov/lara before applying.

License Renewal (Every 3 Years)

Michigan uses an unusual three-year (triennial) renewal cycle – most states renew every one or two years. To renew, you pay the renewal fee, complete the required continuing competency for the cycle, and keep your insurance current. The continuing-competency requirement is tiered by how long you’ve been licensed (MCL 339.2404b):

• Licensed less than 6 years (initially licensed on or after January 1, 2009, in the first two 3-year cycles): 21 hours per 3-year cycle, made up of 3 mandatory core hours – 1 hour of building codes/laws, 1 hour of safety, and 1 hour of legal/business-management changes – plus 18 hours of approved electives
• Licensed 6 or more years: 3 hours per 3-year cycle (1 hour codes, 1 hour safety, 1 hour law/rules)

You don’t submit the certificates with your renewal – you attest that you’ve completed the requirement – but keep them at least five years in case LARA audits you.

The three-year cycle has a hidden risk: because so much time passes between renewals, it’s easy to miss a lapsed insurance certificate, an outdated business address on file, or a coverage gap – and not discover it until you go to pull a permit or bid a job. A good practice is to verify your LARA license status and insurance every year, even in off-renewal years, so nothing slips.

Does Michigan Have Contractor License Reciprocity?

No – Michigan has no contractor license reciprocity with any other state. An experienced, licensed builder from another state still must meet Michigan’s full requirements: the 60 hours of prelicensure education, the two-part PSI exam, and the insurance requirements. There’s no shortcut based on an out-of-state license.

This means a contractor relocating to Michigan should plan for the complete licensing process rather than expecting a transfer. The education and Michigan-specific exam (which covers Michigan building law and lien law) are the main hurdles, and they aren’t waived for out-of-state license holders. For commercial work, you’ll deal with the relevant local jurisdiction, which has its own (local) rules. Plan for the full Michigan process from the start.

Specialty Trade Licenses in Michigan

Michigan licenses the skilled trades separately from the Residential Builder license, all through LARA. A residential builder acts as the general contractor and coordinates licensed trade contractors – a builder cannot self-perform electrical, plumbing, or mechanical work without the trade license.

Electricians

Electrical work requires a state license through LARA’s electrical licensing program, with apprentice, journeyman, and master classifications. A general contractor engages a licensed electrical contractor license holder for electrical scope rather than self-performing it.

Plumbers

Plumbing requires a state license through LARA’s plumbing program, with apprentice, journeyman, and master classifications. A general contractor uses a licensed plumber for plumbing work and verifies the plumbing license through LARA before contracting.

HVAC

Mechanical/HVAC work requires a state mechanical contractor license through LARA, covering the relevant classifications. Any technician handling refrigerant also needs federal EPA Section 608 certification. A general contractor subcontracts HVAC scope to a licensed pro and confirms the HVAC license is current.

Even a full Residential Builder must subcontract electrical, plumbing, and mechanical work to appropriately licensed trade contractors. Verify each subcontractor’s LARA license before contracting – these trades require true state licenses separate from the builder license.

Penalties for Unlicensed Contracting in Michigan

Michigan enforces its residential licensing, and the consequences reach beyond fines:

• Misdemeanor charges – Operating without a valid Residential Builder or M&A license is a misdemeanor under the Michigan Occupational Code (MCL 339.601), which can bring fines and other penalties
• Unenforceable contracts – An unlicensed contractor generally cannot bring a lawsuit to collect payment for residential work that required a license – a significant financial risk
• Stop-work orders and civil liability – LARA’s enforcement division investigates complaints and can issue stop-work orders, and unlicensed contractors face civil liability to property owners
• Local enforcement – For commercial work or local permit violations, cities and counties can impose their own penalties and stop-work orders

You can verify any Michigan license through LARA’s online license search. Because the residential threshold is just $600 and unlicensed contractors lose the right to collect payment, the practical rule is clear: get the appropriate residential license before doing covered work, and confirm local requirements for commercial jobs.

How Much Does a General Contractor Make in Michigan?

General contractor earnings in Michigan are solid, supported by steady residential demand across metro Detroit and Grand Rapids and the state’s manufacturing-driven economy. As a general reference point for the broader construction workforce, the U.S. Bureau of Labor Statistics tracks construction managers and related occupations, and self-employed general contractors’ income depends heavily on their work mix, project size, and how many jobs they run. For a closer look at how pay scales with role, experience, and region, this contractor and construction manager salary guide breaks the numbers down.

Michigan General Contractor Salary by Role

Because “general contractor” isn’t a single wage category, the closest picture comes from the related construction roles the BLS tracks in Michigan. Construction managers – the role most like a general contractor – earn a median well into six figures:

Role	Median Hourly Wage	Median Annual Wage
Construction Managers (GC-equivalent)	$49.63/hr	$103,230
First-Line Construction Supervisors	$37.59/hr	$78,180
Construction & Building Inspectors	$34.15/hr	$71,040
Construction Laborers	$23.84/hr	$49,590

Michigan’s construction manager median of about $103,230 reflects a steady, moderate-cost market with a large construction workforce – roughly 9,620 construction managers and 28,490 laborers statewide. Because the Residential Builder license involves real education, an exam, and insurance, licensed contractors face a meaningful bar to entry, which can support stronger margins for those who clear it, build a reputation, and serve the state’s steady homebuilding and remodeling demand.

Tips for Growing Your Contracting Business in Michigan

A successful contracting business is built on reputation, reliable delivery, and strong client and subcontractor relationships. Beyond getting licensed, the contractors who thrive treat the business side – bidding, scheduling, and project management – as seriously as the build. Here are strategies to help you grow your general contracting business in Michigan’s market:

Pick the right license. Choose the Residential Builder license if you build new homes and act as a GC, or the M&A license if you focus on remodeling and specific trades. The right credential matches your business model.

Invest in the education and exam. The 60-hour course and two-part PSI exam are real hurdles with a moderate pass rate. Treat the coursework as genuine exam prep, and study the Business & Law material especially.

Carry strong general liability. The $100,000 statutory minimum is a floor, not a target – most owners and permit offices expect $500,000 to $1,000,000. Carry what your projects and clients require.

Watch the three-year cycle. Michigan’s triennial renewal makes it easy to lose track of insurance and CE. Set an annual reminder to verify your license status even in off-renewal years.

Handle commercial work locally. If you expand into commercial, remember there’s no state license – get the local credentials for Detroit, Grand Rapids, or wherever you build.

Coordinate licensed trade subs. Electrical, plumbing, and mechanical work require separate LARA licenses. Build a bench of licensed subs and verify each credential to keep projects compliant.

Bid and manage jobs with the right tools. Michigan’s competitive market rewards fast, accurate estimates and tight project management. General contractor software handles estimating, scheduling, invoicing, and client communication in one place – so you spend more time building and less on paperwork. Make it easy for clients to reach and book you with online booking.

Build your reputation online. Michigan homeowners research contractors carefully, and LARA license status is publicly searchable. A strong online presence, verifiable license, and clear reviews are among the highest-return investments for winning larger projects.

Michigan vs. Neighboring States: How Does Licensing Compare?

State	Statewide GC License?	Model	Exam Required
Michigan	Residential only (LARA)	State residential license + local commercial	Yes (PSI)
Ohio	Trades only (state)	State trades + local GC	Exam for trades
Indiana	No statewide GC license	Local licensing	Local
Wisconsin	Dwelling contractor cert	State certification	Course/registration
Illinois	No statewide GC license	Local + state trades	Local

Michigan sits in the middle of the region: it runs a genuine statewide residential license (with education, an exam, and insurance) – more structured than Indiana or Illinois (which leave general contracting local) – but, like most of its neighbors, has no statewide commercial GC license. What defines Michigan is this residential/commercial split, the low $600 threshold that captures nearly all residential work, and the distinctive three-year renewal cycle. For a contractor, the residential license is a real credential worth earning; commercial work is a separate, local matter.

Ready to Build Your Michigan Contracting Business?

Michigan’s residential license is a real credential worth earning. Complete the 60 hours of prelicensure education, pass the two-part PSI exam, carry the required insurance, and choose the right license for your work – Residential Builder for full-scope building, M&A for remodeling and trades. Keep your insurance current across the three-year term, track your renewal and continuing education, and use licensed trade subs for electrical, plumbing, and mechanical work. For commercial projects, handle the local requirements. Do these things well, and you can build a strong contracting business in one of the Midwest’s steady construction markets.

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