Michigan’s First Home: Down Payment Relief
The Michigan State Housing Development Authority (MSHDA) provides a valuable Down Payment Assistance (DPA) program to empower homebuyers in their pursuit of homeownership. This program serves as a complementary second mortgage option, specifically designed to be used alongside MSHDA’s MI First Home or MSHDA’s MI Next Home first mortgage programs. Geared toward low- to moderate-income homebuyers, the DPA program offers support based on factors such as home location and family size. To participate, borrowers are required to complete a homebuyer education class from an MSHDA-approved agency or a HUD-approved agency based in Michigan.
The DPA offered by MSHDA is a unique financial tool. It takes the form of a zero-interest, non-amortizing loan, eliminating the need for monthly payments. Instead, the DPA only becomes due under specific circumstances, such as the sale or transfer of the property, or when the first mortgage is refinanced or paid in full.
Eligibility for the MI First Home Down Payment Assistance (DPA) program, one of MSHDA’s offerings, entails meeting several criteria. Here’s a breakdown of these requirements:
- Completion of a Homebuyer Education class: All applicants must complete this important educational component.
- Availability to first-time homebuyers statewide and repeat homebuyers in targeted areas: This program is open to first-time homebuyers across the state of Michigan. Additionally, repeat homebuyers are eligible in specific targeted areas.
- Minimum credit score: Applicants should have a minimum credit score of 640. For multiple-section manufactured homes permanently affixed to a foundation, built after June 14, 1976, and taxed as real estate (not located in a rent/lease community), a minimum credit score of 660 is required.
- Co-application of all adults in the household: To qualify for the mortgage loan, all adults in the household who intend to occupy the residence must co-apply and meet the credit qualification criteria. Children who are verified as full-time students are excluded from this requirement.
- Repeat homebuyers from targeted areas: Repeat homebuyers from specific targeted areas are eligible for the MI First Home DPA program. These targeted areas include a comprehensive list of counties, such as Alcona, Allegan, Barry, Benzie, Cass, Houghton, Ionia, Kalamazoo, and many more.
The MI First Home Down Payment Assistance program is a valuable resource for individuals and families seeking to embark on their homeownership journey in Michigan.