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Michigan First-Time Home Buyer Programs of 2019

June 28, 2019
Finding the Right Mortgage, Mortgages
Michigan First-Time Home Buyer Programs
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Need help buying your first home? The Michigan State Housing Development Authority helps with two loan programs, plus a down payment assistance program.

If you haven’t owned a home in the last three years, you can qualify as a first-time home buyer. That means that if you owned a home but lost it more than three years ago in the housing crash, you may be able to get a fresh start under these programs.

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

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

What you need to know

Best for home buyers with low credit scores or looking for low down payments. This is the go-to program for many Americans, especially first-time home buyers and those who have a credit history that’s … let’s say shaky. The Federal Housing Administration guarantees a portion of home loans, which

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

 

USDA loans

National program

Best for

Low down payment

Rural

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

 

MSHDA highlights and eligibility requirements

The Michigan State Housing Development Authority offers mortgage programs for both first-time home buyers and repeat buyers. The mortgages feature favorable, fixed interest rates and low down payment requirements, and they can be combined with the authority’s down payment assistance program and mortgage tax credit.

» MORE: Tips for first-time home buyers

Highlights

  • Available for credit scores as low as 640.
  • Alternative credit review is available for some borrowers who have no credit score.
  • The minimum down payment is 3% and down payment assistance is available.
  • Available to first-timers as well as repeat home buyers in economically disadvantaged targeted areas such as the cities of Detroit, Grand Rapids, Flint and Dearborn (here’s a list of target areas).
  • You have your choice of conventional, FHA, VA or USDA loans.

Eligibility

  • The home has to be your primary residence.
  • There are sales price and income limits that vary by location.
  • Overall debt-to-income ratio of 45% or less.
  • You must attend a home buyer education course if you receive down payment assistance.
  • You have to contribute at least 1% of the loan amount, even with down payment assistance.

Compare MSHDA lenders













Min. credit score

Conventional, VA:
620

FHA: 580





Min. down payment

3.5%





Loan Types

Purchase, refinance, jumbo, fixed, ARM, FHA, VA, and USDA



Min. credit score

Conventional:
620

FHA, VA: 580





Min. down payment

3.0%





Loan Types

Purchase, refinance, jumbo, fixed, ARM, FHA, VA, and USDA



Min. credit score

Conventional, VA: 620

FHA: 580





Min. down payment

3.0%





Loan Types

Purchase, refinance, jumbo, fixed, ARM, FHA, VA, and USDA



» MORE: Compare the best MSHDA mortgage lenders

MSHDA first-time home buyer loan programs

MI Home Loan

State program

Best for

Low mortgage rates

What you need to know

The MI Home Loan is for first-time home buyers (and repeat buyers in targeted areas) with low to moderate incomes. The loan has a favorable interest rate, thanks to a bond program that subsidizes it. The minimum credit score is 640. All loans under the program are 30-year fixed-rate mortgages. Every

 

MI Home Loan Flex

State program

Best for

Low down payment

What you need to know

The MI Home Loan Flex program is, true to its name, a little more flexible than the MI Home Loan program in a couple of ways: * It’s for first-time and repeat home buyers statewide. * It doesn’t require all adults who intend to live in the home to apply for and qualify for a mortgage. The Flex

 

MSHDA Down Payment Assistance

State program

Best for

Down payment assistance

What you need to know

The Michigan State Housing Development Authority offers down payment assistance to people who buy their homes under the MI Home Loan and the MI Home Loan Flex programs. It comes in the form of a loan with no monthly payments. The Michigan Down Payment program offers down payment help up to $7,500.

 

Mortgage Credit Certificate

State program

Best for

Tax credits

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. Qualified mortgage borrowers can credit 20% of the annual mortgage interest paid to offset their tax bills. Income limits vary, depending on

Summary: 2019 MSHDA first-time home buyer programs

  • MI Home loan with favorable interest rates.
  • MI Home Loan Flex with favorable interest rates for first-time home buyers and repeat buyers.
  • MSHDA Down Payment Assistance offering help for down payment and closing costs.
  • Mortgage Credit Certificate to provide an annual tax credit.

Start out on the Michigan State Housing Development Authority’s “Am I Eligible for a MSHDA Mortgage?” 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 and another list of loan officers who do MI Home Loan Flex mortgages.

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