Michigan Considers New Help for Home Buyers

April 21, 2009

MichiganThe Michigan State Housing Development Authority (MSHDA) is considering expanding a down-payment assistance program that, when combined with the 2009 $8000 Federal Tax Credit, would provide more than $15,000 in help for first-time home buyers.

The MSHDA program offers down payment assistance up to $7500. Currently, however, your household income must be below $55,000 to be eligible. I’ve sold many homes with this program in Grand Rapids, but was often unable to help families with incomes that exceeded the limit.

This may be about to change, however. If MSHDA’s new plan is approved, MSHDA would raise its limits on the household income for buyers eligible for the $7,500 loan from the current level of $55,000 to more than $100,000. This would open the door to a lot more potential homeowners.

MSHDA Loans are commonly referred to as a “piggy-back” type loan. “Piggy-back” loans are not stand alone mortgage products, but instead can be used in conjunction with other loans. When paired with another mortgage plan, like an FHA loan, for example, buyers can get enhanced benefits in their mortgage choices.

Combining the Federal First Time Homeowner’s Tax Credit of up to $8000 with MSHDA’s $7500 plan means that homeowners could get more than $15,000 in savings on a new home. The state loans can be used for homes worth up to $224,500.

The MSHDA Loan is different from the $8000 Federal Tax Credit in several ways. It is not a credit, but rather an interest free loan. The loans do not have to be paid back until the home is sold or the mortgage refinanced or paid in full. There are no monthly payments on the loan. Unlike the $8000 Federal Tax Credit, you can use the money at closing, rather than waiting until you file your tax return. The MSHDA loan can be used for closing costs, expenses such as setting up escrow accounts, or down payments.

HomeIf you’ve been thinking about buying a home, but don’t think you can afford the down payment, think again. There are loan programs out there, but you have to know about them. Contact your lender for more information about MSHDA/FHA, MSHDA/RD, and other MSHDA combo loans.

Prices are the lowest we’ve seen in years, and interest rates are at historic lows. 8 out of 10 economists predict that home prices will rise within the next five years. What more reason do you need to consider buying a home today? Contact me or your local real estate professional to find out how you can fulfill your dream of home ownership.

You can get more information about the $8000 Federal Tax Credit here.

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