New Grant Available for First-Time Homebuyers in Michigan
If you’re a first-time homebuyer, I have some exciting news! There’s a new grant available though the Michigan State Housing Development Authority (MSHDA) that provides first-time homebuyers with assistance toward closing costs. And, with interest rates near historic lows, this presents potential homeowners with the perfect opportunity to buy.
I recently sat down with Bill Meldrum, a MSHDA expert, and one of our senior loan officers, to discuss how first-time homebuyers can take advantage of this limited time opportunity. Here is what he had to say:
Through a National Mortgage Settlement with the leading five mortgage banks, the MSHDA received $20 million in funds, which was used to create the Homebuyer Assistance Grant Program for first-time homebuyers, as well as the HARP Refinance Program for current homeowners who may be underwater on their mortgage loan.
The Homebuyer Assistance Grant Program has been allocated $15 million dollars, and provides non-military, first-time homebuyers with up to $3,000 in assistance that can be applied toward closing costs. Active military personnel and veterans purchasing their first home are eligible to receive up to $5,000 in assistance. Eligible homebuyers include individuals who have not owned a home within the last three years, and who plan to purchase a single-family, owner occupied, principal residence.
Because the grant can be applied toward FHA, VA or RD loans, which require little or no down payment, homebuyers may be able to purchase their first home with virtually no money out-of-pocket. And, if homebuyers meet additional qualifying information, they may be eligible for additional assistance from the MSHDA.
Similarly, the Home Affordable Refinance Program (HARP) makes it possible for homeowners who possess little to no equity in their home to refinance their current mortgage loan. This program has been allocated $5 million dollars through the National Mortgage Settlement and provides eligible homeowners with up to $500 in assistance that can be applied toward closing costs. To be eligible, homeowners must refinance a single-family, owner occupied, principal residence backed by Fannie Mae or Freddie Mac.
While both of these programs are a great way to help first-time homebuyers and current homeowners with their financial goals, they are available on a first come, first serve basis until funds run out. And, although historic low interest rates have made mortgages more affordable, they are slowly starting to rise, along with home prices.
For those who are interested in taking advantage of this limited time opportunity, the first thing you need to do is get pre-approved. This will make your house hunting process run smoothly and ensure that your offer is taken seriously. Once you’ve found a house, had your offer accepted and loan application approved, your lender will fill out the grant application form and send it to the MSHDA for final approval. If the grant application is approved, the MSHDA will wire your funds to the title company responsible for your mortgage loan. This grant money will then be applied to the required buyer’s closing costs, and may or may not cover all the costs.
Don’t miss out on the perfect opportunity to purchase a home. To find out if you’re eligible for the Homebuyer Assistance Grant Program or the HARP Refinance Program, contact Bill Meldrum at 248.658.2647.
With more than 25 years in mortgage lending, Bill Meldrum is a senior loan officer at Ross Mortgage Corporation’s Royal Oak office, and has been with the company for 16 years. He is an expert on MSHDA programs and also specializes in first-time homebuyer and FHA programs.