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Michigan First-Time Homebuyer Programs

By Elizabeth R. Elstien

The economy and housing in parts of Michigan is depressed, making it difficult for first-time buyers. Help is out there if you know where to look. Here you'll find out about first-time homebuyer programs and the organizations that support them to get financial and educational assistance with your Michigan home purchase.

There are a number of state and local Michigan programs for first-time homebuyers to pave the sometimes rocky road to homeownership. From fixed-interest rates to down payment assistance and programs for disabled or those willing to help build their home, learn which program could help with your first-time Michigan home purchase.

Michigan State Housing Development Authority (MSHDA)

MSHDA has homebuyer counseling, mortgage and down payment assistance and a mortgage credit program. The organization "assists individuals with disabilities and their families to become homeowners." Potential borrowers must meet income and property guidelines for their services. Check their website for further details on each of MSHDA's programs.

  • Help provide a first mortgage for conventional, FHA or USDA Rural Development loans. Must use a MSHDA-approved lender who works with the MSHDA. First loan through MSHDA has low fixed interest rate. Can use with or without down payment assistance.
  • Provides two down payment assistance programs. MSHDA down payment help is a second loan on the property, but this down payment loan has no interest, does not amortize and is payable upon sale of the home or a change in the first mortgage. Loan amounts are $7,500 for the Single Family Down Payment Assistance program and $12,000 for their HomeChoice Down Payment Assistance program. In the latter program, the borrower or another family member living in the home must have a permanent, documented disability.
  • Homeowner's counseling program is available to discuss the purchase and financial obligations of owning a home to aid in budgeting and thereby help avoid foreclosure or tax liens.
  • Mortgage Credit Certificate (MCC) program gives federal tax credit (up to 20% of annual mortgage interest each year) to new homebuyers that meet program income, sales price and other qualifications. Offered throughout Michigan, MCC must be applied for through participating lenders.

Habitat for Humanity

This organization helps provide housing for low-income families or individuals who meet income and need requirements. A home is built for you on the lot you choose. Much of the payment comes in the form of "sweat equity", so be prepared to be an integral part of the building process while taking Habitat for Humanity homeownership education classes. This is not a quick process, but completion of the program equals homeownership of the home you help build. Look on their website for a program in your area.

Local Programs

The City of Grand Rapids offers assistance with down payment and closing costs up to $5,000 for first-time homebuyers. The City of Jackson also has affordable housing programs, such as buyer counseling and down payment assistance. Detroit has many programs sponsored by different organizations. Other Michigan cities or towns may have assistance programs too. Contact your real estate agent or loan officer for more information about local programs or check the U.S. Housing and Urban Development website.

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