Michigan is well known for fishing, the outdoors, and the automobile industry. It's also listed as one of the states with the lowest average mortgage debt! Those looking for further help may be able to utilize a local or national program that offers down payment assistance and grants to qualified applicants. The Michigan State Housing Development Authority is one organization that offers such programs.
If you're thinking about purchasing a home in Michigan, you may have options to help with the down payment or closing costs. Read below to learn more about any program and see if it can help with your home purchase!
Offered by the Michigan State Housing Development Authority (MSHDA), the First Home Down Payment Assistance Program is a second mortgage that must be used with the First Home or Next Home First Mortgage offered by MSHDA.
Borrowers interested in this program must finish an approved homebuying education course.
Up to $7,500 is offered in the form of a non-amortizing loan with 0% interest and deferred payment. The loan amount becomes due and must be repaid when the property is sold, transferred, refinanced, or if the first mortgage is paid off.
In most cases, to utilize this program you must be a first-time homebuyer. However, repeat homebuyers are allowed if they are purchasing a property in the following target areas:
Alcona, Alger, Allegan, Alpena, Antrim, Arenac, Baraga, Barry, Benzie, Berrien, Branch, Cass, Charlevoix, Cheboygan, Chippewa, Clare, Delta, Emmet, Gogebic, Traverse, Gratiot, Houghton, Ingham, Iosco, Ionia, Iron, Kalamazoo, Keweenaw, Lapeer, Leelanau, Lenawee, Luce, Manistee, Marquette, Mason, Mecosta, Menominee, Missaukee, Montcalm, Montmorency, Newaygo, Oceana, Ogemaw, Ontonagon, Osceola, Otsego, Presque Isle, Roscommon, St. Clair, St. Joseph, Sanilac, Schoolcraft, Tuscola, Van Buren, Washtenaw, or Wexford.
In order to be eligible, applicants must have a credit score no lower than 640 (or 660 if the property being purchased is multi-section, manufactured house with a permanent foundation, built on June 14, 1976 or later, and is taxed as real estate). All individuals 18 years of age or older who will be occupying the property must co-apply and meet the minimum credit score, unless the individual is the applicant’s child and is also a full-time student.
Offered by the Michigan State Housing Development Authority (MSHDA), the Next Home Down Payment Assistance Program is a second mortgage that must be used with the First Home or Next Home First Mortgage offered by MSHDA.
Up to $7,500 (or 4% of the purchase price, whichever amount is smaller) is offered in the form of a non-amortizing loan with 0% interest and deferred payment. The loan amount becomes due and must be repaid when the property is sold, transferred, refinanced, or if the first mortgage is paid off.
Applicants of this program must be a repeat homebuyer, meaning they cannot use this program to buy their first home. They must have a credit score of at least 660, fall within certain income limits (which depend on location and household size), and finish a homebuying education class.
The property being purchased using this program cannot be a manufactured house, nor can it cost more than $224,500 (as of 2020).