LANSING — A new program in Michigan seeks to make homeownership more accessible for millennials and working families by providing some help with down payments.
The MI 10K DPA program offers homebuyers in certain zip codes across the state – including several in Wayne County – up to $10,000 in down payment assistance, funds that don’t have to be repaid until the homebuyer pays off the mortgage or sells the home.
While millennials continue to make up the largest population of home buyers, nearly half report not having enough money for a down payment. Down payments are known to be one of the biggest factors preventing potential homebuyers of any age group from purchasing their own home, according to experts.
The new program from the Michigan State Housing Development Authority (MSHDA) is aiming to positively effect this disparity.
The Arab American News asked Mary Townley, director of MSHDA’s homeownership division, questions about the MI 10K DPA program, how it works, qualifications and how millennials and other homebuyers can leverage this program to become first-time homeowners.
Click here to find out more about the program.
Given the current housing economy, how can this new program boost buying power among millennials and other sectors of the population?
Down payments are one of the biggest barriers preventing homeownership for all age groups and demographics, but this seems to be especially true for millennials. While millennials are currently the largest population of home buyers, a recent survey from Realtor.com shows 44 percent of millennials don’t have enough money for a down payment.
That’s where the MI 10K DPA loan program comes in. Through the MI 10K DPA, homebuyers in 236 zip codes across Michigan who choose MSHDA for their first mortgage can receive an up to $10,000 down payment assistance loan – helping to make homeownership both attainable and affordable.
For those looking to buy a home outside of those 236 zip codes, MSHDA has another program that offers up to $7,500 in down payment assistance. So regardless of where you are or where you intend to set down roots, help is available to make homeownership both attainable and affordable.
Why are certain zip codes chosen for the program?
These areas were determined after assessing a variety of factors, including census data, Home Mortgage Disclosure Act (HMDA) data and historical data of MSHDA activity. This allowed us to see where opportunities exist to provide greater financial resources for potential homebuyers to help them get into the home of their dreams.
Could you tell us about how the program works and what people need to know about qualifying and applying for it?
The MI 10K DPA loan program offers up to $10,000 in down payment assistance for homebuyers who meet household income limits and are purchasing a home in a qualifying zip code with a MSHDA mortgage. The program applies to new and existing single-family homes, condominiums and manufactured homes with a sale price up to $224,500. Buyers must provide a down payment of 1 percent of the home’s sale price.
For those who obtain a first lien with MSHDA, the MI 10K DPA loan is provided in the form of a second mortgage and can be applied to down payments, closing costs and prepaid/escrows. Leftover funds can be used to buy down the first lien. Payment on the MI 10K DPA loan is not due until a sale or transfer of the property occurs, when the property ceases to be the principal residence of the mortgagor or when other existing mortgage loans have been fully paid.
Safe, quality and affordable housing is a cornerstone of diverse thriving communities and having a high level of housing security can positively impact other areas of your life. Our hope is the MI 10K DPA program helps Michiganders across the state achieve that level of housing security by making homeownership more attainable and affordable.
Could you tell us a little about the lending partners involved in this unique program?
MSHDA works with an extensive network of experienced lenders across the state able to help homebuyers determine if they qualify for a MSHDA mortgage and the MI 10K DPA (or MSHDA’s $7,500 down payment assistance loans) and help them apply. Participating lenders can be found at www.michigan.gov/mshdaloanofficers.