I’m Buying My First home- Is There Anything That Can Help Me?
When buying your first home, there are a lot of unknowns. This new arena can be challenging, stressful, and scary to navigate. Luckily, there are many incentives through the state of Michigan that can help you get started.
The MI Home Loan program if for first time home buyers (repeat home buyers may qualify in certain areas) with low or moderate incomes and a minimum credit score of 640. All loans in the program are for 30 year fixed mortgages and have very favorable interest rates. Every adult who is going to live in the house has to apply and qualify for the loan, except in the case of full-time students who intend to live in their parents home. In addition, the loan may be used to purchase a manufactured home or a condominium if it meets the MSHDA guidelines.
The MI Home Loan Flex program is similar to but more flexible than the MI Home Loan program. This program is for first-time and repeat home buyers statewide and doesn’t require all the adults who will live in the home to apply for and qualify for the mortgage. The minimum credit score is 660, not all of the loan types can be used to buy a manufactured home, and the minimum down payment on a condo is 5%.The Flex program is also for home buyers with low or moderate incomes. If one wants to borrow more than 95% of the home’s value, they must take a home buyer education course- whether or not the borrower is going to accept the down payment assistance. Interest rates for the Flex loans are higher than the ones in the MI Home Loan program because this program is not subsidized by the state bond program.
The Michigan State Housing Development Authority offers assistance on down payments to people who buy their homes with the MI Home Loan and the MI Home Loan Flex programs. This is a loan of up to $7,500 (or 4% of the cost of the house, whichever is less) with no monthly payments back to the state. The money can be spent on closing costs and prepaid expenses (like property tax and homeowners insurance), in addition to the actual down payment. Even with the down payment assistance, the MSHDA requires buyers to have 1% of the down payment in hand. Once the home is sold, the mortgage is being refinanced, or the home loan is paid off, the down payment assistance must be repaid to MSHDA. The loan has a 0% interest rate, though, so what you get is what you pay.
The Mortgage Credit Certificate program gives a federal tax credit to first-time home buyers in Michigan (may also apply to repeat home buyers in certain areas). Qualified applicants can credit 20% of the annual mortgage interest being paid to offset their tax bills. There are income limits , it depends on house size and location, and the maximum sales price is $224,500.
Buying your first home is always going to be scary, but with some of Michigan’s incentives it can help to lessen the stress. Talk with a specialist in your area today for more information on all the loans that may be available to you! Also, give FIA a call and ask all the questions you’d like about homeowners insurance. Your local professionals are here to help you.