Down Payment Assistance Programs in Michigan
During the last few decades the population decline and the national housing crisis have driven prices and mortgage rates down in Michigan. This has made homeownership more attainable in the state. Additionally, more mortgage programs have been offered, especially to first-time homebuyers both by the federal and Michigan state governments. Many of these programs also provide down payment assistance programs thus making homeownership both cheaper and more accessible.
Michigan Down Payment Assistance Programs
MSHDA Down Payment Assistance
The Michigan State Housing Development Authority (MSHDA) 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.
MI Home Loan
The MSHDA MI Home Loan is a mortgage program for first-time homebuyers statewide and repeat homebuyers in targeted areas․ The loan offers Down Payment Assistance up to $7,500.
Eligible applicants must have a minimum credit score of 640 or 660 for multiple-section manufactured homes. All adults in the household MUST apply and credit qualify (except dependents 18 years of age and older that are full-time students). Homebuyer Education class is required for the applicants. Maximum sales price is $224,500.
MI Home Loan Flex
The MSHDA MI Home Loan Flex program (formerly known as MI NEXT) offers eligible homebuyers Down Payment Assistance on FHA and RD loans up to a maximum of $7,500.00 or 4% of the purchase price whichever is less (2nd lien position, deferred payments, 0% interest). This can be applied to the down payment, closing costs and prepaid expenses (taxes and insurance).
The eligible applicants may be both first-time and repeat homebuyers. Minimum credit score of 660 is required. Max sales price statewide in Michigan must be $224,500.
Backed by the US Department of Agriculture, USDA Loans program, also known as Rural Development Loans or RD Loans program, provides 90% loan note guarantee to approved lenders in order to reduce the risk of extending 100% loans to eligible rural homebuyers. This means 100% financing or ZERO down payment to low- and moderate-income households to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas.
In order to qualify, homebuyers must purchase homes in an eligible rural area, must fall within income limit, have a minimum credit score of 640.
Chenoa Fund Down Payment Assistance Loans
Chenoa Fund DPA Edge Forgivable Soft Second:The Chenoa Fund DPA Edge-Soft Second product is an FHA mortgage combined with a second that lends 3.5% to cover the borrower’s down-payment.With this program, you receive a 30-year term, 0% interest rate, no monthly payment, second mortgage. You will need to meet the minimum credit score of 620 and have a qualifying income equal or less than 115% of the median income for the county in which you will live. The loan is forgiven when you make 36 consecutive on-time payments on the first mortgage.
The Chenoa Fund Edge-Repayable product: This product is a FHA mortgage. CBC Mortgage Agency lends 3.5% to cover the borrower’s down-payment. This percentage goes toward the creation of a repayable second mortgage which is either a 10-year term with a 0% interest rate, or a 30-year term with a 5% interest rate, at the choice of the borrower. Eligible borrowers must have a qualifying Income > 115% AMI and a minimum FICO Score of 620. The program requires a monthly payment, which must be factored into DTI ratios.
Chenoa Fund Rate Advantage program:This program is offered by CBC Mortgage Agency (CBCMA) to give both borrowers and lenders the opportunity to buy a home today, and enjoy future price appreciation. CBCMA offers 3.5% to cover the borrower’s down-payment in the form of a repayable second mortgage. The Rate Advantage is a 10-year loan which has an interest rate of 8% for an FHA loan. The loan provides a lower interest rate on the first mortgage than the DPA Edge Program.
Chenoa Fund Conventional Program: CBCMA provides a second mortgage in an amount of 3.5% to meet the down-payment requirement and assist with some of the closing costs for borrowers that qualify for a 97% LTV Conventional Loan (3% for the down, .5% for closing costs). No income limits are applied, but all
borrowers must have a minimum FICO score of 640. Concurrent homeownership is allowed, but at least one borrower must be first-time homebuyer. No Homebuyer Education class is required.
The City of Lansing offers Down Payment Assistance Program (DPA) to expand home ownership opportunities for income-eligible households and to increase home-ownership within the city of Lansing. Assistance is based on need, not to exceed $40,000.00.
The Program assistance is provided as a zero-interest loan subordinate to the buyer's first mortgage. The loan amount is forgiven after ten-years. The loan becomes due and payable in full when the house ceases to be the loan recipient's principal place of residence (though if the loan recipient purchases another home after five years within the Lansing city limits to be occupied as their principal place of residence, the loan will be completely forgiven at that time.)
Purchasers must contribute a minimum of $500 toward the home purchase.
The City of Grand Rapids Homebuyer Assistance Fund program offers up to $7,500 for low- and moderate-income homebuyers for down payment, closing costs, and prepaid expenses.
Eligible homebuyers are required to be first time buyers, must agree to occupy the home as primary residence for at least 5 years, be pre-approved for a mortgage from a participating lender and must complete an approved homebuyer education course.
The property must be located in Grand Rapids city limits, meet HUD/FHA minimum property standards at the time of closing, must undergo structural, mechanical, electrical, and plumbing inspections, meet program guidelines regarding lead-based paint and the purchase price must be at or below HUD established limits.
The HOME Down Payment Assistance Program is funded through the Department of Housing and Urban Development through the HOME Investment Partnerships grant programs. Genesee County, working in partnership with local financial institutions, offers down payment and closing cost assistance to low and moderate income first-time home buyers purchasing residences.
The eligible applicants for HOME funds must be credit worthy first-time home buyers, qualify for a mortgage and make no more than 80% of the median income, adjusted for household size.
Detroit Home Mortgage (DHM) provides mortgage to buy and fix up a home that needs renovation or to buy an already renovated home. There are several Down Payment Assistance Programs that are available for use with Detroit Home Mortgage, including:
Flagstar's Down Payment Assistance: Up to $7,500 available for qualifying applicants that can be used toward down-payment and closing costs. Applicant must meet income restrictions, demonstrating need for the assistance. Homebuyer education is required. Down-payment assistance must be paid back (pro rata) if property is sold within 3 years of purchase, unless the borrower is under financial hardship.
Independent's Down Payment Assistance: 0% interest grant that is forgivable 20% each year for five years. Funds are not required to be repaid if under hardship (as with DHM seconds). No repayment is required if first and second mortgages are paid off. The prorated balance due is repayable if the property is sold, refinanced, transfer of title, or in foreclosure within the first 5 years.
The Liberty Bank Home Restoration and Acquisition Program (HRAP) is a new non-traditional mortgage loan that will allow a homebuyer to finance the acquisition and any required repairs or renovations to their home being purchased in Hardest Hit Priority Neighborhoods in the City of Detroit.
Down payment assistance of up to $15,000 is available to homebuyers who qualify. If the purchase is from the City of Detroit Land Bank auction homebuyers are required to put 10% down on their winning auction bid. The purpose of the assistance is to bridge the gap between the cost of repairs and the appraised value of the home. Detroit Public School employees may qualify for up to $20,000 in down-payment assistance.
The Northwest Michigan Community Action Agency (NMCAA) Down Payment Assistance Program is a savings program designed to help you receive $3,000 towards the down payment on your home. The assistance provided will be a 0% deferred loan. This is a limited-time offer and part of the agency initiative as a Homeownership Center to provide opportunities for safe, permanent housing to the members in the communities. It is offered on a first come, first eligible, first serve basis.
Applicants interested in the Down Payment Assistance Program must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house. Applicants are required to attend NMCAA’s Homebuyer Education workshop.
Riverbank Finance LLC offers an exclusive down payment assistance program from a HUD non profit agency. These grant funds can be used with FHA purchase financing including renovation loans.
Borrowers will receive a gift of 2% of the sale price towards their down payment at closing. No repayment or 2nd lien is required.
Eligible borrowers must be first time home buyers or have an income less than 140% of AMI. Eligible professions include past, present, retired, or volunteer first responders, educators, medical personnel, civil servants or military personnel. Theprogram is available for Michigan Properties only.
Borrower must cover the remaining 1.5% of the FHA down payment requirement from own funds or with a gift from family. Sellers can still pay up to 6% of the sales price towards closing costs and pre-paids.
Teacher Next Door Program offers housing grants of up to $4,170.00 to all Michigan teachers. ALL teachers, grades Pre-K through 12, as well as administrators and staff, will receive a minimum of $1,000.00 NON-repayable GRANT to be used toward the purchase of a home. In addition to the grant, they may also be eligible for down payment assistance of up to $10,681.
Wayne County Home Buyer Program provides assistance of up to $7,500 to low and moderate income families to purchase a home in Wayne County. The homebuyer assistance may be used for down payment assistance or closing costs such as pre-paid taxes, interest, lender’s points, application processing fees, credit report, title insurance, appraisal, mortgage survey, etc. but not for homeowner’s insurance or real estate commissions.
Eligible homebuyers must be at least 18 years old, have an annual gross income not exceeding 80% of Wayne County Median income as determined by HUD, must occupy the property as a principal resident for at least 5 years. Homebuyer cannot have more than $10K in liquid assets.