How to Get Down Payment Assistance in Michigan — 2024 Buyers
Want to become a home owner, but you’re short on funds for the necessary down payment or closing costs? We have down payment assistance options available for Michigan home buyers to help get you across the finish line!
These programs range from state-sponsored programs and grants to local municipalities and non-profits, and also include programs from other companies who we partner with—for you! Down payment assistance programs also work hand-in-hand with our low-down payment loans, to get you the best deal possible.
How Down Payment Assistance Works
Most programs are offered in the form of cash assistance, which directly decreases the amount of cash a home buyer needs to present at the closing table.
The programs at Treadstone usually cover all or part of your down payment, and/or your closing costs.
Many of these programs use funds to help borrowers reach their necessary down payments, combined with amazing resources like home buyer education classes, minority-focused initiatives, post-close counseling, and in some rare cases—forgivable assistance.
These programs, like our standard loan programs, have unique eligibility requirements. Minimum credit scores, maximum income limits, location restrictions, and property conditions are all part of those requirements. You can request information about these requirements!
What Down Payment Assistance Options Are Available?
Grants
Grants are an amazing type of down payment assistance that is never required to be paid back! It’s free money! These are often offered by cities counties, states, and non-profits, to accelerate economies and improve quality of life.
Grants for down payments are harder to achieve, but this doesn’t mean it’s impossible! You’ll need to get crafty with your Loan Officer to see which grants you’re eligible for. The City of Grand Rapids has an amazing grant for first-time home buyers and offers up to $7,500 in financial assistance for your home. For Grand Rapids home buyers, it’s an incredible opportunity.
Second Home Loans
Second mortgages are a popular choice of down payment assistance and they’re available t0 many buyers—often sponsored by local municipalities, state governments, and non-profit organizations. Certain programs offer zero interest on that second loan!
This form of assistance is straightforward: find the perfect home for your family today, and pay back the second loan, all at once, when you sell your home, refinance, or pay off the mortgage. In rare cases, these second loans are forgivable, but you’ll need to work with your Loan Officer to see if you are eligible.
Second mortgages for down payment assistance usually offer up to 2-5% of your purchase price in the form of cash assistance. That specific number will depend on your financial situation and the second loan eligibility.
Things to consider
A quick note: these programs don’t remove any qualifications for the loan itself, including cash reserve amounts, credit qualifications, and debt-to-income ratio requirements. You will need to qualify for a home loan as usual to get approved, but you’ll retain additional funds at closing with a down payment assistance grant or program.
Are these programs worth it?
Absolutely! These programs are created to expedite your path to homeownership. If homeownership is right for you, then these down payment options will be an amazing tool for you.
Depending on your specific financial situation, your Loan Officer will work with you and determine the most effective path forward, and let you know if down payment assistance is your best option.
FAQs
Can these programs cover closing costs?
Yes! Some of the programs we offer can cover part, or all of your closing costs! Assistance for closing costs changes per program, so your Loan Officer will have more specific information for you!
How does down payment assistance work in Michigan?
For those who are eligible (check with your Loan Officer!), grants and second loans exist to cover either a portion, or the entirety of your down payment for a home, allowing you to save more cash for the things you like, and buy a home sooner! For down payment assistance programs that require repayment, you may either be able to pay back the second loan in monthly payments, or in full when you sell/refinance your home.
Is buying a home with down payment assistance better than renting?
We certainly think so! The sooner you can escape the rental market, the more financially stable you may be long-term. These down payment assistance programs are great for escaping your never-ending leases to build equity sooner, rather than later!
What down payment assistance do I qualify for, and how much can you get for down payment assistance?
Qualifications and amounts for these programs vary depending on your unique situation and the loan you’re applying for. Ready to get started? Curious what your options are?
