The Michigan State Housing Development Authority or MSHDA program is a down payment assistance program available to home buyers in Michigan. The easiest way to explain this program is that its an add on to an FHA, Conventional, VA, or Rural Development loan. Kind of like when you are purchasing a car and opt for the leather seats instead of fabric. Its the same car just with additional features. In the case of using the MSHDA option, the state is covering part of the down payment that is required and also some of the closing costs with an zero interest loan. That’s right MSHDA is not “free” money, it’s a loan from the state at a zero percent interest rate that is paid back when the house is sold or mortgage refinanced. Lets look at a quick example.
FHA requires 3.5% down or $7,000
MSHDA requires the buyer cover 1% of that or 2,000
7,000 Needed – 2,000 buyer contribution = 5,000 used from MSHDA to cover the remaining down payment
In the case of $7,500 in down payment assistance funds that would leave $2,500 in the MSHDA pot of money that could be used towards closing costs.
After closing the buyer owes on two loans, the main mortgage that had 3.5% put down on it and the 2nd mortgage with MSHDA for 7,500. When the house is sold or refinanced those two loans get paid back.
You can see there is a lot there! This stuff can get confusing and everyone’s situation is different. The bottom-line is that there are lots of options when buying a home and we are here to help figure out the options that is best for YOU! Feel free to reach out at (269) 488-9494 and we can help answer all of your questions. If you would like to get qualified for one of these programs you can start with filling out the loan application.
Working with home buyers searching for a new primary residence is a totally different game compared to working with investors and rental property. Sure, there are similarities, but what want-to-be home owners care about is different than what an investor cares about. Frankly, for an investor, it’s all about the money and it should be. When someone purchases a rental property they are essentially running a business. If we can help them run a successful business and turn a profit they will likely come back and buy more properties.
There are lots of want-to-be investors out there and the hardest part is getting started. We are going to help unravel the maze. We will also look at long term planning. Often just knowing what needs to happen to acquire the next property and the next one after that is one of the keys to success. Owning rental property can be a great way to build wealth and we are here to help.Visit Jeremy's Blog