Michigan Builder Requirements: Education, Renewal & Exam Format
Beyond passing the combination exam, a Michigan builder must satisfy prelicensure and continuing education and understand the closed-book exam format. This chapter reviews the 60-hour requirement, the three-year renewal cycle, workers' compensation, and how the Business and Law section is delivered.
Prelicensure and continuing education
A first-time applicant must complete 60 hours of approved prelicensure courses to receive an initial license (MCL 339.2404b). At renewal, licensees must meet the continuing-competency requirements for each three-year license cycle to keep the license active (MCL 339.2404). The exam is closed book, so the candidate is expected to know Michigan licensing law, contract rules, and construction standards from study rather than to look them up during the test.
Insurance and workers' compensation
A Michigan residential builder with employees falls under the Worker's Disability Compensation Act once the business reaches the act's thresholds. A private employer is covered when it regularly employs three or more employees at one time, or fewer than three if at least one of them has worked 35 or more hours a week for 13 or more weeks during the preceding 52 weeks (MCL 418.115). Article 24 and the builder rules do not set a minimum amount of liability insurance or require a license bond. The principle to remember is that a builder with a crew must carry workers' compensation coverage.
Closed-book, multiple-choice exam format
The Business and Law section is part of the closed-book, multiple-choice Residential Builder combination exam: 160 questions in 240 minutes, with a passing raw score of 116 for the whole exam. Business and Law accounts for 50 of those questions, and PSI publishes no separate passing score for it. PSI's outline for the section lists eight areas: regulatory and statutory requirements (13 questions), insurance, bonds and liens (11), contracts (7), project management and administration (6), accounting and finance (6), types of business organization (4), personnel (2), and estimating (1). Because there is no reference material in the room, candidates should master the Michigan-specific rules — the $600 threshold, the no-suit rule for unlicensed builders, and the lien deadlines — from memory.
Keep going: the full Michigan Residential Builder & M&A Contractor Business and Law guide covers every section of the exam. Michigan Residential Builder & M&A Contractor Business and Law — Study Guide (2026) — PDF + EPUB, $14.99 · 14-day refund →
State-specific details
State exam facts
- State regulator
- Michigan Department of Licensing and Regulatory Affairs (LARA), Bureau of Construction Codes
- Exam vendor
- PSI
- Prelicensing education
- 60 hours of approved prelicensure courses
- Passing score
- 116 of 160
- Scored questions
- 160
- Time limit
- 240 minutes
Does Michigan require a state contractor license?
Yes. Michigan's LARA (Bureau of Construction Codes) licenses Residential Builders and Maintenance & Alteration Contractors under the Occupational Code, MCL 339.2401 et seq. A license is required to contract for residential work where the combined labor-and-materials price is $600 or more.
What is on the Michigan residential builder exam?
PSI gives one closed-book combination exam: 160 questions in 240 minutes, with a passing raw score of 116 for the whole exam. 50 of the questions are Business and Law, and the sections have not been taken separately since November 14, 2019. Michigan requires 60 hours of approved prelicensure courses for an initial license (MCL 339.2404b), and the license runs a three-year cycle.
Can an unlicensed Michigan builder collect payment?
No. MCL 339.2412 bars an unlicensed builder from bringing an action to collect compensation, and construction liens run under the Michigan Construction Lien Act (MCL 570.1101 et seq.).
Sources: https://www.michigan.gov/lara, https://test-takers.psiexams.com/api/content/bulletin/553
Practice stays free. The full Michigan Residential Builder & M&A Contractor Business and Law study guide is the material itself, taught start to finish — a downloadable PDF + EPUB you keep.