Understanding Michigan’s Mortgage Assistance Programs
Buying a home doesn’t have to be out-of-reach, even if you’re attempting to secure a mortgage with a smaller income. Michigan’s mortgage assistance programs aim to make homeownership more accessible for low-to-moderate income residents. These programs offer various benefits, from down payment assistance to flexible financing.
What is a MSHDA Loan? A Comprehensive Overview
First things first, the Michigan State Housing Development Authority (MSHDA) is a state agency in Michigan that aims to provide safe and affordable housing opportunities to residents of the state. The MSHDA Loan program provides affordable mortgage financing options and down payment assistance. MSHDA offers up to $10,000 of cash to home buyers to cover their down payment, closing costs, etc. That $10,000 must be repaid (it is considered a second mortgage with 0% interest), but is not due until you either sell the home or pay off the mortgage. It is available only to first-time home buyers, but buyers in rural areas may use it multiple times. MSHDA has different loan products catered to first-time home buyers, repeat buyers, veterans, and residents of targeted areas in Michigan. To qualify for a MSHDA Loan, applicants must meet specific eligibility criteria, including income limits, credit score requirements, and possibly completion of a homebuyer education course.
Benefits of MSHDA for First-Time Home Buyers
MSHDA first-time home buyer benefits are expansive. These loans offer compelling benefits while making homeownership more attainable. The provision of down payment assistance eases the financial burden of a substantial upfront cost, enabling individuals to enter the housing market with less strain on their savings. MSHDA’s competitive interest rates also result in lower monthly mortgage payments, enhancing affordability. MSHDA first-time home buyers also gain access to flexible financing options, tailored to their unique financial situations. The program’s requirement for home buyer education imparts essential knowledge and guidance, empowering buyers with better decision-making skills as they look for the right home. Ultimately, MSHDA loans foster stable communities by increasing housing opportunities and providing the opportunity for first-time home buyers to feasibly purchase a home when they might have been otherwise unable to without the program.
MSHDA Requirements for (up to) $10,000 of Down Payment Assistance
Michigan recently extended its MI 10K DPA program statewide, benefiting low and middle-income homebuyers by providing a bigger boost toward homeownership. Initially limited to 236 zip codes, the program has proven highly popular, constituting more than 70% of current down payment assistance applications. The former $7,500 down payment assistance program will no longer be offered as part of the expanded statewide initiative, but the broader availability of the MI 10K DPA program promises to assist a more extensive range of aspiring homeowners in their pursuit of affordable housing.
MSHDA Loan Requirements
Before a home buyer can secure an MSHDA Loan, they must complete a housing education class. From there, home buyers must adhere to the particular household income limits relevant to their area, sales price, income, and family size. Eligible individuals must have at least a 640 credit score or 660 for multiple-section manufactured homes.
Understanding MSHDA Income Limits
MSHDA Loans fall within certain parameters for income limits. The limits vary depending on the area and family size and are ultimately determined by both income and the sales price of the home in question. Statewide, the sales price limit is $224,500.
Step-by-Step Guide: How to Apply for MSHDA Down Payment Assistance
To apply for MSHDA down payment assistance, you’ll need to do the following:
- Talk to a Loan Officer to confirm your eligibility — reach out to one of our Treadstone Loan Officers and we can help get you started!
- Submit your mortgage application — we will make the process seamless for you.
- Get connected with a Realtor — use someone you know, or we can refer you to one of the many wonderful, trusted agents we work with.
- Start shopping!
Finding MSHDA Lenders in Michigan
As an MSHDA-approved lender in Michigan, Treadstone can help you with every step of the way, from confirming your eligibility to securing your down payment assistance and finding the home of your dreams!
Low-Income Housing Options in Michigan
MSHDA isn’t the only program in Michigan that exists to take the burden of affordable housing off of residents’ shoulders. There are local city and county grants, loans that offer lower down payments, secondary loan opportunities, and even loans that don’t require a down payment at all. Connect with one of our Loan Officers to see what option may be the best fit for you!
How to Get MSHDA Down Payment Assistance
Securing down payment assistance with MSHDA does not have to be a stressful process. Our Loan Officers can work with you to see if you’re qualified for the program and from there, we can ensure you complete all of the necessary steps and understand your options before taking the leap into homeownership.
Subject to credit qualification. Not all borrowers may qualify. Rates, terms, and Annual Percentage Rate (APR) are dependent on credit profile, property selected, down payment, and program. Not a commitment to lend.
MSHDA offers up to $10,000
to cover down payment or closing costs