The Michigan State Housing Development Authority just rolled out a new down payment assistance program for Non-First Time Homebuyers. As a reminder, there is also a program that allows for down payment assistance for first time homebuyers. I will cover that in next weeks blog post.
With all of the buzz around this product, I wanted to quickly share with you the details on this exciting program.
- Clients must make a minimum down payment of 1% of the purchase price
- Maximum down payment assistance equal to 4% of the purchase price not to exceed $7,500
- Applicants can not have liquid assets equal to or greater than $7,500
- Down payment assistance must be repaid when the home is sold
- There are no payments or interest charged on the down payment assistance
- Homebuyer Education class is required
- Primary residence only - No second homes or investment property
- Maximum Sales Price of $224,500
- Income and Sales Price restrictions vary by property location (click here for details)
- Minimum credit score of 640 required for all borrowers
- Minimum credit score of 660 required if the home is a manufactured home
- Preferred debt to income ratio is 43% (can go to 45% when warranted)
- Not all occupants of the home are required to apply and qualify (unlike the first time homebuyer program)
- Unpaid collections and judgements may be required to be paid off prior to loan approval
- Currently only available with an MSHDA FHA, RD and VA home loan
- No acreage restrictions apply (unlike the first time homebuyer program)
Keep in mind that many who use this program will likely use it in conjunction with an FHA mortgage. An FHA mortgage requires a 3.5% down payment. The down payment assistance from this program can be used to cover part of the down payment and closing cost (as a reminder, you must have a minimum down payment of 1% of the purchase price). Most clients will still need to incorporate seller paid closing cost in order to limit their overall cash investment.
Even though a client could potentially purchase a home with only a 1% down payment, clients should be prepared to have funds available to cover their earnst deposit with their Realtor, home inspections and required deposit with their lender. These deposits do count toward the clients required 1% down payment.
As with any real estate transaction, it is extremely important to work with an expert. As a mortgage lender since 1991, I have more than two decades of experience and am ready to put my expertise to work for you.
To find out more about this program and the options we have available please contact me. You can reach me at 616-931-4629 or through my website at www.danmoralez.com.
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