Last week, I talked about down payments and options for down payment assistance. I discussed what the “right” down payment is and ways to get help in putting that money down. Today, I’d like to talk about one of the best options available to Michigan residents for down payment assistance: the Michigan State Housing Development Authority (MSHDA) Down Payment Assistance Program.
The MSHDA Down Payment Assistance Program is designed for low to moderate income households where potential homebuyers have limited funds to put down on a new house. The program allows those individuals who qualify to receive up to $7500 toward their down payment, up to a maximum of 4% of the home’s value. This means you can buy a house by putting down as little as 1% and still qualifying for either the MSHDA FHA or MSHDA Rural Development financing options.
The down payment assistance is not a free gift, however. It sits on your house as a second mortgage which will eventually need to be repaid. IT does not accrue interest, does not have monthly payments, and will never grow. But if you decide to sell the house or refinance your mortgage, you will need to pay back the amount of the down payment assistance.
If you are in the market for a new house and think you might qualify for down payment assistance, your first stop should be to a qualified mortgage loan officer who can explain all of your options. Even if you don’t qualify for MSHDA Down Payment Assistance, there could be other options at your disposal.
If you are looking for help in financing a home in Michigan, please contact me. If you have anything else to add about MSHDA Down Payment Assistance, please leave a comment.