If you need help buying your first home in the Wolverine State, the Michigan State Housing Development Authority may be able to help with a loan program, plus down payment assistance.
If you haven't owned a home in the past three years, you can qualify as a first-time home buyer. That means that if you owned a home but left it more than three years ago, you may be able to get a fresh start under these programs.
MSHDA highlights and eligibility requirements
The Michigan State Housing Development Authority offers a mortgage program for both first-time home buyers and repeat buyers. The mortgage features fixed interest rates and a low down payment requirement, and it can be combined with down payment assistance and the authority’s mortgage tax credit program.
» MORE: Tips for first-time home buyers
Highlights
Alternative credit review is available for some borrowers who have no credit score.
The minimum down payment for a conventional loan is 3%, and down payment assistance is available.
Available to first-timers as well as repeat home buyers in certain economically disadvantaged target areas.
Eligibility
Available for credit scores as low as 640.
The home has to be your primary residence.
There are limits on sales price, income and overall debt-to-income ratio.
You must attend a home buyer education course to receive down payment assistance.
You have to contribute at least 1% of the loan amount, even with down payment assistance.
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MSHDA first-time home buyer loan programs
MI Home Loan
Best for:
Fixed-rate loans with cash assistance
What you need to know:
The MI Home Loan with down payment assistance up to $10,000 is for first-time home buyers (and repeat buyers in targeted areas) with low to moderate incomes. The minimum credit score is 640. All loans under the program are 30-year fixed-rate mortgages. Every adult who intends to live in the home must apply and meet loan qualifications. The loan can be used to buy a manufactured home if the structure meets MSHDA guidelines. It also can be used to buy a single-family house or a condominium.
Mortgage Credit Certificate
Best for:
A break on your taxes
What you need to know:
The Mortgage Credit Certificate program issues a federal tax credit to first-time home buyers throughout Michigan, and to repeat home buyers in targeted areas. Mortgage borrowers can credit 20% of the annual mortgage interest paid to offset their tax bills. Income limits vary, depending on household size and property location, and the maximum sales price is $224,500.
Start out on the Michigan State Housing Development Authority's "Homeownership" page, which has links to information about the state's loan programs, including mortgage credit certificates and home buyer education classes.
If you need down payment assistance, take a look at MSHDA's down payment assistance page.
The authority's website maintains a county-by-county list of loan officers who do MI Home Loans.
First-time home buyer programs near Michigan
Illinois first-time home buyer programs Indiana first-time home buyer programs Ohio first-time home buyer programs Pennsylvania first-time home buyer programs Wisconsin first-time home buyer programs
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National first-time home buyer programs
These national loan programs appeal to many first-time home buyers. Offered by most lenders, the loans have low down payment or flexible credit requirements.
Conventional mortgage
Best for:
Low down payments, limited mortgage insurance premiums
What you need to know:
A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.
VA loans
Best for:
Military, low down payments
What you need to know:
The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.
FHA loans
Best for:
Low credit score, low down payments
What you need to know:
This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.
USDA loans
Best for:
Low down payments, rural home buyers
What you need to know:
A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.
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