Housing Counseling: Michigan U.S. Department of Housing and Urban Development HUD

Table of Content

• First-time home buyer loans in Michigan
• First-time homebuyer programs in nearby states
• Michigan home buyer stats
• Local homebuyer assistance programs
• Residency requirements
• How We Make Money
• What assistance is available for first-time home buyers in Michigan with low income?
• What credit score is needed to buy a house in Michigan?

Unless you qualify for a loan or grant to cover these costs, you would be on the hook for $6,780–13,560 out of pocket. First-time home buyers in Michigan can also qualify for federal programs available from HUD, the Federal Housing Administration , the Veterans Administration , and the U.S. The state offers programs through the Michigan State Housing Development Authority . Some larger cities, like Detroit, Warren, and Grand Rapids, and counties like Wayne County , have programs to assist first-time home buyers in their respective areas. Many people who can afford the monthly mortgage payments and have reasonable credit will qualify. The MSHDA offers down payment assistance loans rather than grants.

See details in the first-time home buyer programs comparison table above. Remainder after down payment and closing costs can be used toward first mortgage. Warren's assistance program is for low- or moderate-income home buyers with a maximum income between $42,750–80,600 purchasing city-owned properties. A mortgage not backed by a government agency is known as a conventional loan. Such mortgages can have either fixed or adjustable rates, and usually require a down payment of 20% or more.

First-time home buyer loans in Michigan

Once renovations are complete, the HRAP loan converts to a permanent mortgage based on the home's final value. City of Warren Direct Homebuyer Assistance Program provides a forgivable loan secured by a second mortgage on the home. After you close on your home, the loan payments are deferred and entirely forgiven in five years. Although you don't have to be a current resident of Michigan to qualify for MSHDA's programs, you do have to live in the home being purchased.

The United States Department of Agriculture’s Rural Department aims to build healthy and sustainable rural communities by providing USDA-backed mortgages. These homes loans are zero-down and low interest, helping low- and moderate-income residents find safe and affordable housing. Although some other states have seen faster home price growth, such a large hike can pose problems for Michigan first-time home buyers. It’s hard enough to save for a down payment even when prices are stable. So read on to learn about cash assistance that might top up your savings. Investigate lenders, interest rates and down payment requirements for each option before you make the choice.

First-time homebuyer programs in nearby states

Eligible costs include the down payment and other allowable closing costs as shown on a settlement statement or an executed sales agreement for the purchase of a traditional or manufactured home. Finally, all adults in your household will also need to complete ahomebuyer’s education courseif you apply for the down payment assistance. Taking a day-long class to learn more about the homebuying process and the financial responsibilities tied to homeownership is typically required for most homebuyer assistance programs. In Michigan, the courses are provided by MSHDA’s network of housing counseling agencies, so you have plenty of options to choose from. First-time home buyer savings accounts may only be used for first-time home buyer program purposes. Thanks to a bond program that subsidizes the program, interest rates are much lower than other market offerings.

Visit theTribe of Chippewa Indians’ homeownership programwebsite to learn more. The funding is handed over as a zero-interest second loan that’s forgiven after 20 years for newly constructed homes. Check out both programs’ details on theGrand Haven Neighborhood Housing Services’website. You should also check on local homebuyer initiatives, as you may have the opportunity to double up on state and local incentives.

Michigan home buyer stats

You may want to contact the banks that participated — Hungtington, Flagstar, and Independent — as they may have other programs of benefit to first-time home buyers. Buyers must complete a home-buyer education class for both programs. Liquid or cash assets of the home buyers' household can't be over $20,000. The minimum credit score allowed for Michigan State Housing Development Authority programs is 640. The home purchase price cap for all MSHDA programs is $224,500.

The MDP can be a great option if you’re a little short on the down payment for your first home. Just understand that you’ll have to pay back the money you are loaned eventually. If you plan on staying in your home for many years, you won’t have to repay it until you pay off or refinance your first mortgage, at which point you’ll have lots of time to prepare.

These loans are typically low interest and are available for no money down to qualified borrowers. First-time homebuyers who are residents of the state of Michigan have a number of choices available when they start shopping for loans. It’s important to be well-versed in the mortgage options available. FHA.com is a privately owned website, is not a government agency, and does not make loans. First-time homebuyers living in the state of Michigan have a number of mortgage options available when they start shopping for loans, such as FHA, USDA, VA, and Conventional loans.

If you’re ready to find an advisor who can help you achieve your financial goals, get started now. All adults who intend to occupy the home must have a minimum credit score of 640 (or 660 for multiple-section manufactured homes). The biggest difference between the two is that the Flex option does not require all of those who plan to live in the home to apply. If your spouse has subpar credit, for example, the Flex option can help you avoid potential issues with approval.

It can be combined with a conventional, VA orFHA mortgage, or homebuyers can opt to pay cash. Before we break down the loan programs for Michigan residents, we’ll first go over several national homebuying programs offered through the federal government. You want to consider all your options when searching for a mortgage, so make sure to look at both federal and state programs. So, if it’s not cash assistance and you aren’t making monthly payments, what happens to the loan while you are living in your home?

The program is income-based, and applicants must be a first-time homebuyer purchasing a home in one of the seven counties in the area . The department also can assist with connecting tribal citizens with financial institutions for mortgage prequalification. Check out theHomeowners Property Tax Assistance Program websitefor the full eligibility requirements, documents you’ll need on hand to apply and how to submit your application. Housing counseling agencies offer guidance on homebuying, renting, reverse mortgages and default and foreclosure prevention. Clever can connect you with one of the top real estate agents in your area, plus put cash back in your pocket. Connect with top local agents who can help you get a great deal on a new home.

Under the MSHDA program, the maximum household income allowed is $139,720 . FHA loans can allow a DTI as high as 57% under certain conditions. Conventional loans, which aren't backed by the government, typically require a DTI below 36%. A first-time home buyer in Michigan is someone who has never purchased a home as their principal residence, or hasn't owned a home in the last three years. VA Home Loans are available through or backed by the Veterans Affairs Department to service members, veterans, and eligible surviving spouses.

As is the case for all MSHDA loan programs, household income limits can vary depending on family size and property location. First-time homebuyer assistance programs and/or grants were researched by the team at FHA.com. Please note that all programs listed on this website may involve a second mortgage with payments that are forgiven, deferred, or subsidized in some manner until resale of the mortgaged property. NADLs don’t require high credit score minimums or the purchase of private mortgage insurance, which is a perk that extends from normal VA loans. To make things even better, NADLs come with significantly lower closing costs.

FHA.com's compilation is not a complete list, but it can serve as a starting point in your search for the down payment assistance program or grant for your situation. It is up to the consumer to contact these entities and find out the specifics of each program. Experiment with a mortgage calculator to see how down payment, interest rate, property taxes, and homeowners insurance affect your monthly mortgage payment. If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

Some are exclusively for first-time homebuyers but others help any homebuyers —including repeat buyers — who are within a lower-income bracket. Home buyers typically have to pay 3-6% of the home's price in closing costs. Considering the median home price in Michigan is 226,00, that amounts to $6,780-13,560. Home buyers must be pre-approved for a mortgage from a participating lender. You must be 18 years old and agree to occupy the home — located within Grand Rapids city limits — as your primary residence for at least five years. The Michigan State Housing Development Authority requires that home buyers complete educational courses to qualify for down payment and closing assistance.