With the downtown energy of Detroit’s comeback history, the relaxation of wine country in Traverse City, and the tranquility of the Upper Peninsula in Marquette, there are plenty of reasons to take root in Michigan. Property values in the state have followed the national trend, with the average sales price increasing nearly 15 percent year over year, according to real estate agent Redfin. If this is your first time buying a home in America’s High Five, the Michigan State Housing Development Authority can help.
First Time Loan Programs For Michigan Homebuyers
The Michigan State Housing Development Authority (MSHDA) has two primary 30-year fixed-rate mortgage programs that help ease the financial burden on first-time home buyers:
- MI home loan
- MI home loan flex
Both options apply to conventional, FHA, VA, and USDA loans. The biggest difference between the two is that the flex option doesn’t have to apply to everyone planning to live in the apartment. For example, if your spouse has below average credit, the Flex option can help you avoid potential approval problems. The Flex option also has no restrictions on the size of the lot you purchase; the standard MI home loan has a maximum of two acres in most cases.
Technically speaking, this does not have to be your “first” home ownership to take advantage of any of these options. Instead, the state defines a First time home buyers as someone who hasn’t owned a home in the past three years.
Requirements for the borrower:
- 3 percent down payment (down payment help possible)
- 640 Minimum Credit Score for MI Home Loan; At least 660 creditworthiness for MI Home Loan Flex or MI Home Loan for a prefabricated home
- Must meet MSHDA Income limits
- Must complete a homebuyer training course when combined with down payment assistance
Real estate requirements:
- Cannot be more than $ 224,500
- Must be a single family home or condo; can also be a multi-part prefabricated house for MI Home Loan
- Cannot be more than two acres (with some exceptions up to five acres) for MI Home Loan; no restriction for MI Home Loan Flex
Michigan Down Payment Assistance Michigan
Michigan Down Payment (MDP)
The Michigan Down Payment (MDP) program was designed to help reduce the initial sticker shock of buying a home with $ 7,500 down payment assistance. There is also up to $ 10,000 in assistance in certain zip codes. It is important to note that these are not grants or forgivable loans; they are second mortgages with no interest or monthly payments. You will need to repay the MDP amount when the home is sold or when you refinance or pay off the first mortgage in full.
Requirements for the borrower:
- Must borrow MI Home Loan or MI Home Loan Flex
- Must have less than $ 20,000 in cash
- Must have 1 percent of the purchase price of the house available
- Must complete training to become a homebuyer
Other Aid Programs for Home Buyers in Michigan
Mortgage Credit Certificate (MCC)
Buying a home can be expensive, but you can save some money if you have your taxes on one Mortgage Credit Certificate (MCC). In Michigan, the loan is equal to 20 percent of your annual mortgage interest, which is capped at $ 2,000 per year. You have to pay a $ 400 fee for the MCC, and your lender may charge an additional $ 100, but the upfront cost can be well worth it if you use the loan for the full 30 years of your mortgage each year.
If you borrow an MI Home Loan or MI Home Loan Flex through MSHDA, however, you are out of luck – the MCC cannot be combined with these loans.
Local homebuyer support programs
First-time home buyers in Michigan may also find help through local housing initiatives. In Grand Rapids, for example, home buyers with cash assets of $ 10,000 or less may be entitled to $ 7,500 to help with closing costs, down payment, and prepaid expenses through the city’s Homebuyer Assistance Fund. In Detroit, some lenders have like TCF and Huntington Bank Take part in the Detroit Home Mortgage Program, which can waive certain closing costs and offer small grants to qualified buyers.
Other loan programs for first time buyers
In addition to the Michigan state and local government mortgage programs, you can use Bankrate’s Guide to First Time Buyer Programs to find out whether you are entitled to other forms of support available nationally.
For other Michigan home ownership programs, including by city, visit HUD.gov.
Are You Ready To Make A Home Of Your Own Michigan? After taking the time to understand the options available to you, it is time to start thinking about finding the right mortgage lender. You can use the … MSHDADA’s search portal to find a list of banks, credit unions, and other lenders in each of the state’s counties, along with contact information for loan officers to help you through the process.
Compare Michigan Mortgage rates, Loan terms and requirements from various lenders to ensure you find the best option for your situation.