Michigan down payment assistance: New program offers up to $25K to first-generation homebuyers
(Photo by PATRICK T. FALLON/AFP via Getty Images)
DETROIT (FOX 2) - Buying a home is expected to become more attainable for first-generation homebuyers in Michigan, thanks to a recently launched pilot program.
The Michigan State Housing Development Authority's (MSHDA) First-Generation Down Payment Assistance Program will provide a loan of up to $25,000 to eligible buyers to help cover their down payment, closing costs, and prepaid escrows.
By the numbers:
The loan will come from $8 million allocated in the state budget for the program. The state anticipates that more than 320 homebuyers will be able to take advantage of the pilot program.
To qualify, the buyer must be purchasing a home for $224,500 or less.
The down payment assistance loan can be combined with MSHDA FHA, Conventional and Rural Development loans and the MSHDA Rate Relief Mortgage, but it cannot be combined with MSHDA’s MI $10K DPA program.
What to consider when buying a home with your significant other
For many couples, the new symbol of commitment isn't an engagement ring, it's a house key. According to the Wall Street Journal, over 550,000 unmarried couples purchased homes together in 2023. Jeanette Schneider, the president of RE/MAX of Southeastern Michigan, explains how couples can navigate the process.
Assistance Eligibility:
To qualify, potential homebuyers must meet certain requirements:
- All homebuyers on the loan must meet the definition of a first-generation homebuyer:
- Must be purchasing the property
- Must live in the purchased property as their primary residence
- Has had no ownership interest (sole or joint) in another property during the last three years, and
- One of the following must apply:
- No parent of the borrower has had an ownership interest (sole or joint) in a property in the last three years
- The borrower has aged out of foster care, or
- The borrower has become emancipated.
- Must complete homebuyer education face-to-face with a HUD Certified Counselor
- Minimum of 1% cash investment
- Minimum of 640 credit score
- Applicants must fall within the household income limits set by MSHDA
- Property sales price cannot be more than $224,500
- The First-Generation DPA must be combined with a MI Home Loan (conventional, FHA, or USDA)
- This program cannot be combined with MSHDA's MI10K DPA loan
What they're saying:
MSHDA's CEO Amy Hovey said this program will help buyers overcome some of the hurdles typically faced by first-time buyers, and will give them a financial boost.
"With rents soaring, this program offers families a foot in the door and much-needed stability by helping them secure a home with a fixed monthly cost. This financial boost will allow first-generation homebuyers to invest in their futures, strengthen their communities, and build generational wealth," she said.
Lt. Gov. Garlin Gilchrist also praised the program, saying that it builds upon other programs already offered to people buying their first home.
"Today’s announcement will help more families cover upfront homebuying costs, keeping money in their pocket, where it belongs. It builds on our historic investments to expand affordable housing across Michigan and MSHDA’s record success each of the last two years. Let’s keep working together to make housing more accessible," he said.
What you can do:
First-time homebuyers who are interested in using the program should reach out to a participating lender to learn more.
The Source: This information is from the Michigan State Housing Development Authority.