734.506.6300First Time Homebuyer
Understanding
It’s important that as a first-time homebuyer you understand the homebuying and mortgage process fully. Not only will this help you make better financial decisions, but it will make the process smooth and easy. Purchasing a home doesn’t have to be hard if you know what you’re doing.
Take a look at our homebuying guide and learn the homebuying and mortgage process from start to finish. If you have additional questions, our mortgage experts are here to help.
First Time Homebuyer Down Payment Assistance Program
MSHDA
The Michigan State Housing Development Authority (MSHDA) offers down payment assistance to people with no monthly payments.
They currently offer a $10,000 Down Payment Assistance Program and a Non-DPA Program. The funds can be spent on closing costs, prepaid expenses homeowners insurance or property taxes) and the down payment itself. Borrowers are still required to provide at least 1% of the loan amount themselves.
The down payment assistance is repaid when the home is sold, the mortgage is refinanced or the home loan is paid off in full. It has a 0% interest rate.
Michigan home buyers that have not owned a home in the last three years can fit into the first time home buyer classification. That means that if they owned a home but lost prior to three years ago, they may be able to get a fresh start under these programs.
MSHDA Eligibility requirements;
- Available for credit scores as low as 640
- The minimum down payment is 3% and down payment assistance is available
- The home has to be your primary residence
- There are income limits that vary by location
- The overall debt-to-income ratio of 45% or less
- Borrowers must attend a homebuyer education course if you receive down payment assistance
- Borrowers have to contribute at least 1% of the loan amount.
- And More
Mortgage One has been the #1 MSHDA lender in the state of Michigan for 10 years in a row!
MSHDA FAQ
Second time home buyers may qualify for MSHDA if they haven’t owned a home in the last three years or purchase a home in a targeted area that waives the three-year condition.
MSHDA requires a homebuyer education course. There are many MSHDA approved courses to take, with some being person and some being online. These courses walk you through the fundamentals of being a responsible homeowner.
Student loans on MSHDA loans are treated the same way as non-MSHDA loans. Majority of the time a percentage of your total loan amount or the monthly payment on an Income-Based-Repayment Plan must be used and counted against your DTI (Debt-to-Income Ratio)
Just like student loans, we treat a bankruptcy the same way as if it were a non-MSHDA loan. On FHA loans, generally, it is a two-year waiting period from the status for chapter 7 & 13. On Conventional loans, generally, it is a three-year waiting period from the status date for chapter 7 & 13. This however is something we cannot fully determine until we have a complete application.
Unfortunately, no. You cannot use MSHDA with VA loans. However, VA loans may be 100% financing. Meaning in some cases, borrowers may not have to make a down payment.
Just like student loans and bankruptcy. Being Self-Employed is treated like a non-MSHDA loan. If your income can be used on a non-MSHDA loan, more than likely it can be used on a MSHDA loan.
Only one person is required to go on the loan. However, any one of the age of 18 that will be living in the home must provide income documentation to ensure all household members are not over the income limits.