In this article you will discover important information and resources if you are a Michigan first time homebuyer.
There are lots of reasons to settle in Michigan, with downtown excitement in Detroit’s rebirth story, wine country relaxation in Traverse City, and quiet in the Upper Peninsula in Marquette.
The median sale price in the state has increased year over year, in line with the national trend.
The Michigan State Housing Development Authority can assist first-time homebuyers in “America’s High Five.”
Michigan first time homebuyer loan programs
The Michigan State Housing Development Authority (MSHDA) offers two 30-year fixed-rate mortgage programs to help first-time homebuyers manage their finances:
➣ MI Home Loan ➣ MI Home Loan Flex
Conventional, FHA, VA, and USDA loans are all eligible for any choice. The most significant distinction between the two is that the Flex option does not require everyone who intends to live in the property to apply.
If your spouse, for example, has poor credit, the Flex option can assist you avoid potential acceptance complications.
The Flex option also has no constraints on the size of the lot you’re buying; in most circumstances, the conventional MI Home Loan is limited to two acres.
This doesn’t have to be your “first” time purchasing a property to take advantage of either of these alternatives.
A first-time homebuyer, according to the state, is someone who has not purchased a property in the previous three years.
Borrower specifications:
➣ A 3% deposit is required (down payment assistance available)
➣ A minimum credit score of 640 is required for a MI Home Loan; a minimum credit score of 660 is required for a MI Home Loan Flex or a MI Home Loan for a manufactured home.
➣ MSHDA income limits must be met
If paired with down payment assistance, you must take a homebuyer education course.
Property specifications:
➣ The total amount must not exceed $224,500.
➣ Must be a single-family home or condominium; a multi-section manufactured home can also qualify for a MI Home Loan.
➣ For MI Home Loan, the property must be no more than two acres (with some exceptions up to five acres); for MI Home Loan Flex, there are no restrictions.
Michigan Down Payment Assistance
Michigan Down Payment (MDP)
With $7,500 in down payment help, the Michigan Down Payment (MDP) program is designed to make the first sticker shock of buying a house more manageable.
In some zip codes, help of up to $10,000 is also available. It’s vital to clarify that these are second mortgages with no interest or monthly payments, not grants or forgiven loans.
When you sell your property, refinance, or pay off your first mortgage in full, you’ll have to repay the MDP amount.
Borrower specifications:
➣ Must be a MI Home Loan or MI Home Loan Flex borrower
➣ Cash assets must be less than $20,000 ➣ 1 percent of the home’s buying price must be available ➣ A homebuyer education course must be completed.
Other Michigan homebuyer assistance programs
Mortgage Credit Certificate (MCC)
While purchasing a home can be costly, a Mortgage Credit Certificate can help you save money when it comes time to file your taxes (MCC).
The credit in Michigan is equal to 20% of your annual mortgage interest, up to $2,000 per year.
The MCC costs $400, plus your lender may add another $100 on top of that, but if you use the credit every year for the entire 30 years of your mortgage, the upfront expense may be worth it.
You’re out of luck if you’re taking out a MI Home Loan or MI Home Loan Flex through the MSHDA because the MCC can’t be paired with these loans.
Homebuyer Help Services in Your Area
Local housing programs in Michigan may also be able to assist first-time homebuyers.
Homebuyers in Grand Rapids, for example, who have $10,000 or less in cash assets may be eligible for $7,500 from the city’s Homebuyer Assistance Fund to help with closing fees, down payments, and other expenses.
Some lenders in Detroit, such as TCF and Huntington Bank, participate in the Detroit Home Mortgage program, which waives some closing costs and provides small incentives to qualified buyers.
Other Financing Options for First-Time Homebuyers
You can utilize Bankrate’s guide to first-time homebuyer programs to see if you qualify for additional nationally available kinds of aid in addition to Michigan state and local mortgage programs.
Michigan First Time Homebuyer Summary
Are you ready to make your dream of owning a home in Michigan a reality? It’s time to consider about selecting the right mortgage lender after you’ve spent some time learning about your possibilities. The MSHDA’s search engine can help you uncover a list of banks, credit unions, and other lenders in each of the state’s counties, as well as contact information for loan officers who can assist you.
What is down payment assistance Michigan?
Down Payment is available to qualified borrowers who meet the eligibility which includes but is not limited to, income, credit and property type requirements. Up to $7,500 in down payment assistance; can be used for borrower paid closing cost, pre-paid expenses and down payment.
Is there a first-time home buyer tax credit in Michigan?
The Mortgage Credit Certificate (MCC) program provides housing assistance by issuing a federal tax credit to first-time homebuyers statewide and repeat homebuyers in targeted areas. Program Description: Qualified homebuyers can credit 20% of their annual mortgage interest paid against their year-end tax liability.
Can I buy a house with no money down in Michigan?
100% financing in Michigan with a zero down mortgage buying a home with no down payment is still an option for many home buyers. There are even options to buy a home and still avoid PMI (Private Mortgage Insurance).
What is a Mshda loan?
The Michigan State Housing Development Authority (MSHDA) offers Down Payment Assistance (DPA) to specifically help repeat homebuyers purchase a home. The assistance is provided with a zero-interest, non-amortizing loan with no monthly payments.
How long does it take Mshda to approve a loan?
A complete list of the requirements and application to become a MSHDA MI Home Loan Lender can be found at the following link MSHDA New Lender Application. If all of the required documentation is submitted, application review will be completed in approximately 3 weeks.
Is MSHDA a grant?
A MI Home Loan can be a great mortgage option for single mothers, college students, and more. That’s why some refer to a MSHDA loan as a single mom grant for home buying. At the end of the day, it’s a great loan option for anyone. The MI Home Loan Flex requires only borrowers to meet the requirements.
Do I qualify for MSHDA?
To qualify, you must meet the following requirements: Complete Homebuyer Education classes. Have a minimum credit score of 640-660 (depending on the type of home). Meet household income limits based on area and household size.
Is MSHDA an FHA?
The Michigan State Housing Development Authority or MSHDA program is a down payment assistance program available to home buyers in Michigan. The easiest way to explain this program is that it’s an add on to an FHA, Conventional, VA, or Rural Development loan.
What is a FHA loan Michigan?
A Michigan FHA loan is a home loan that is insured by the Federal Housing Administration. Home buyers are able to purchase a home with a low-down payment as low as 3.5% of the purchase price.
What is the minimum credit score to buy a house in Michigan?
State First-Time Homebuyer Programs To qualify, homebuyers need a FICO® credit score of at least 640 and a debt-to-income ratio under 45%.
What is considered low income for a single person in Michigan?
They become “very low-income” at $34,900 or less and “extremely low-income” at $20,950 or less. In Ann Arbor, these numbers rise to $64,400, $42,100 and $25,250, respectively, taking into account differences in local median income.
What is MI Home Loan Flex?
MI Home Loan and MI Home Loan Flex MSHDA provides a variety of products to help buyers achieve and afford homeownership. Their flagship down payment assistance (DPA) programs provide up to $7,500 in assistance, which can be used towards the down payment, closing costs, and prepaid and escrow items.
How much are closing costs in Michigan?
In Michigan, closing costs usually amount to around 1.8% of a home’s sale price, not including realtor fees. With a median home value of $234,954, sellers can expect to pay around $4,118 at closing.
How much do I need to make to afford a $250000 house?
How much do I need to make for a $250,000 house? A $250,000 home, with a 5% interest rate for 30 years and $12,500 (5%) down requires an annual income of $65,310.
Can you write off closing costs?
If you itemize your taxes, you can usually deduct your closing costs in the year in which you closed on your home. If you close on your home in 2021, you can deduct these costs on your 2021 taxes.
Is there a first time homebuyer tax credit for 2020 IRS?
Tax credit in general for first time homebuyers, there is a refundable credit equal to 10 percent of the purchase price up to a maximum of $8,000 ($4,000 if married filing separately).
What is the best program for first time home buyer?
FHA loans are the most popular first-time home buyer programs. These loans are insured by the Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development (HUD).
How much is the down payment for MSHDA?
The minimum down payment is 3% and down payment assistance is available. Available to first timers as well as repeat home buyers in economically disadvantaged target areas. You have your choice of conventional, FHA, VA or USDA loans.
