MSHDA Loans

The Michigan State Housing Development Authority (MSHDA) offers several programs to assist Michigan residents in obtaining a home.  The primary programs available are down payment assistance, lower interest rate with no down payment assistance, and Mortgage Credit Certificate.

The down payment assistance is repaid when the home is sold or the mortgage is refinanced.  It has a 0% interest rate and is a lien on title to the property.

    General MSHDA Eligibility requirements on all programs
    • Minimum credit score 640
    • Available to first time buyers only unless the home is in a “targeted” area.
    • The home has to be your primary residence
    • One-unit homes/condos only.  No multi-family properties.
    • The sale price limit is $224,500
    • Income limits vary by the location of the property
    • The overall debt-to-income ratio must be less than 45% of the borrower’s gross income.
    • ALL adults that intend to occupy the property must apply for the mortgage unless they are a full-time student or disabled dependent.
    Down payment assistance program highlights
    • Down payment assistance of up to $7500 is available on a conventional, FHA, or Rural Development loan.
    • Down payment assistance must be repaid when the home is sold or the mortgage is refinanced.
    • Borrowers must attend a homebuyer education course if you receive down payment assistance.
    • Borrowers must contribute at least 1% of the sale price from their own funds (or a gift from a relative) toward the down payment.
    • Lower monthly PMI rate than a standard conventional loan.  Standard FHA and RD mortgage insurance rates are not affected.
    • Interest rate and allowed closing costs are set by MSHDA.
    Mortgage Credit Certificate program highlights
    • Borrowers receive a Federal tax credit for 20% of the mortgage interest they paid the previous year.
    • Borrowers can file a revised W-4 with their employer to receive immediate benefit.
    • Lender can use the monthly tax benefit to help qualify the borrower for the mortgage.
    Non-down payment assistance highlights
    • No down payment maximum.  If the borrower qualifies, they can put down as much money as they want and get the MSHDA subsidized interest rate.  This can help borrowers with less than perfect credit get a low interest rate.    
    • Lower monthly PMI rate than a standard conventional loan.  Standard FHA and RD mortgage insurance rates are not affected.
    • Interest rate and allowed closing costs are set by MSHDA. 
    MSHDA Loans

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