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2019 Michigan First-Time Homebuyer Programs

Buying your first home is exciting — but it’s not always an easy process. From searching for the right property to handling the paperwork and sizable upfront costs, there’s a lot to manage.

Fortunately, there is help available for first-time buyers. If you’re looking for your first home in Michigan, there are several state programs available to help you achieve your goals.

Michigan first-time homebuyer programs

First-time buyer programs are available through the Michigan State Housing Development Authority (MSHDA), a provider of financial and technical housing assistance since 1966, and other entities including National Faith Home Buyers.

In January 2019, we researched the most current information on first-time homebuyer programs in Michigan, which included reviewing program websites and guidelines from the MSHDA. Here’s what first-time homebuyers in Michigan need to know.

Eligibility for Michigan assistance

All of these programs require that a borrower is a first-time homebuyer who has not owned a home in the past three years. As noted below, there are a few exceptions for borrowers in economically disadvantaged targeted areas, which include the cities of Detroit, Grand Rapids, Flint and Dearborn.

You can check current mortgage rates for your area here.

MI Home Loan program

Features

  • Down payment assistance up to $7,500 in conjunction with Michigan Down Payment Loan

Eligibility

  • Income limits based on family size and property location
  • Maximum sales price limit of $224,500
  • Minimum credit score of 640 (660 for multi-section manufactured homes)
  • First-time homebuyers statewide and repeat homebuyers in economically disadvantaged, targeted areas
  • Homebuyer education class required

How it works

All homebuyers work directly with a participating lender who has closed at least one MSHDA loan in the previous six months. To determine your eligibility, contact your preferred local lender from this list.

MI Home Loan Flex program

Features

  • Provides down payment assistance up to $7,500
  • Flexible lending criteria
  • Can be used in conjunction with the Michigan Down Payment Loan

Eligibility

  • Income limits based on family size and property location
  • Maximum sales price of $224,500
  • Minimum credit score of 660

How it works

To start, you can use the state’s eligibility tool. Then contact a lender to move forward with the process of applying for the program.

Step Forward Down Payment Assistance Loan

Features

  • Up to $15,000 in assistance to cover down payment, closing costs and prepaid or escrow expenses
  • Grant money that need not be repaid
  • 0% rate with no monthly payments
  • Loan is forgiven at a rate of 20% per year and fully discharged after the fifth year if borrowers still own and occupy the property as their primary residence

Eligibility

  • Household assets, not including retirement accounts, must not exceed $10,000
  • County-dependent income limits vary between $67,300 and $130,340
  • Maximum sales price of $224,500
  • Minimum credit score of 640 (660 for manufactured homes)
  • Can only be used in conjunction with the MI Home Loan programs
  • Borrowers must not hold a mortgage loan from any other Step Forward programs

How it works

To start, you can use the state’s eligibility tool. Then contact a lender to move forward with the process.

Mortgage credit certificate

Features

  • Homebuyers may credit 20% of annual mortgage interest paid for a dollar-for-dollar reduction of their year-end tax liability
  • This credit is permitted every year for the life of the original mortgage, up to 30 years

Eligibility

  • Income limits based on family size and property location
  • Maximum sales price of $224,500
  • First-time homebuyers statewide and repeat homebuyers in targeted, disadvantaged areas

How it works

Start the process of applying for this program by finding a lender from this list.

Individual Development Account

Features

  • Matched savings account averaging $20 monthly
  • Minimum $1,000 total savings

Eligibility

  • Household income limits apply
  • Funds may be used for homeownership, education or business

How it works

Families may also receive financial education, credit counseling, homeownership preparation and assistance and resources for further education and training. To learn more, you can visit the Michigan IDA Partnership or contact:

Michigan IDA Partnership
c/o Oakland Livingston Human Service Agency
196 Cesar E. Chavez Avenue
Pontiac, MI 48343
Phone: 248-209-2691
Email: [email protected]

Housing education initiatives

Features

  • Homebuyer education and counseling

Eligibility

  • Open to prospective and current homeowners

How it works

Michigan’s statewide network of housing educators offers services that include financial capability education, pre-purchase counseling, foreclosure prevention counseling and Key to Own Counseling. You can find housing educators in your area on the MSHDA site.

City of Grand Rapids Homebuyer Assistance Fund

Features

  • Up to $7,500 in assistance to cover down payment, closing costs and prepaid expenses

Eligibility

  • Home must be primary residence for at least five years
  • Annual income limits apply
  • Maximum of $10,000 in assets
  • Borrowers must be preapproved and complete a homebuyer education course
  • Property must be located within Grand Rapids city limits
  • Minimum HUD/FHA standards must be met at time of closing
  • Structural, mechanical, electrical and plumbing inspections are mandatory
  • Program guidelines regarding lead-based paint must be met
  • Purchase price must be at or below established HUD limits

How it works

To apply for assistance, you’ll need to work with a participating lender to get preapproved for a mortgage. The lender will submit your application for the program. You can also contact the city for questions at this number: 616-456-3677.

Detroit Home Mortgage Program

Features

  • Offers mortgages for up to $75,000 above the appraised value of a home
  • Provides flexibility for buyers to purchase move-in ready homes or fixer-uppers or refinance their current mortgages
  • Down payment assistance also available for some borrowers, depending on the lender

Eligibility

  • Home must be located in the city of Detroit
  • Credit score minimum of 600
  • Buyers must have adequate income, as determined by the program, and required down payment
  • No income limitations apply
  • Property may be a single-family unit up to a four-family unit and must be the borrower’s primary residence

How it works

To apply, you must first choose one of the five banks that work in conjunction with the program: Independent Bank, Liberty Bank, Huntington, Flagstar Bank and Chemical Bank. Once you start the process, you’ll make an appointment with one of the five banks to determine eligibility and further terms.

Genesee County: HOME Down Payment Assistance Program

Features

  • Down payment and closing cost assistance
  • Offered as a grant that need not be repaid

Eligibility

  • Credit qualifications apply
  • Borrowers must make no more than 80% of the median area income

How it Works

Funded through the Department of Housing and Urban Development through the HOME Investment Partnerships grant program, Genesee County partners with local financial institutions to provide down payment and closing cost assistance to low- and moderate-income first-time homebuyers. You can apply using this form.

National Faith Home Buyers: Wayne County Homebuyer Program

Features

  • Up to $7,500 in assistance to cover down payment and closing costs

Eligibility

  • Maximum purchase price of $119,000
  • Mortgage payment must not exceed 30% of borrower’s gross income
  • Income limits based on household size apply
  • Homeowner insurance and real estate commissions are not allowable expenses

How it works

Designed to assist low- and moderate-income families seeking to purchase a home in Wayne County, this homebuyer program offers assistance that may be combined with gifts, grants or loans from a relative or a nonprofit agency to cover your complete down payment. The forms and applications for homebuyers can be found at the National Faith Home Buyers website.

National first-time homebuyer programs

There are several national programs available for first-time homebuyers. Agencies offering such assistance include the FHA, Fannie Mae and Freddie Mac, the USDA and the VA. For more information, check out our guide to national first-time homebuyer programs.

 

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