MSHDA Explained

By James Lutz, Mortgage Loan Officer

Michigan State Housing Development Authority, better known by its acronym MSHDA, was established in 1966 to help give lower income families a better opportunity to become homeowners. They are most commonly known for their down payment assistance programs offered to first time home buyers, but they also provide technical assistance and homeownership classes to educate our communities in regards to budgeting and preparing to become a long term homeowner.

The down payment grant they offer is good for up to $7,500 paid at closing. This grant can be used to cover the down payment itself, as well as closing costs, property taxes and home owners insurance which is due at the closing of your home purchase.

This grant has some fantastic benefits. But, it also comes with its own set of guidelines and rules that the state created to make sure the right people are getting the help they need. Below are some of the most important features and guidelines that you should be aware of.

In order to qualify for their grant you must meet the following criteria:

  • Credit scores – Most of their programs will require a 640-660 credit score, and depending on exactly which program, or grant, you are applying for, you and any adult over the age of 18 living in the home may need to have the same credit scores as well. Unless they are a full time student with transcripts to prove it.
  •  Home sale price limits & household income limits – Each county in Michigan has a set limit for the maximum sales price you can purchase, as well as household income limits. Each county also has “targeted areas” which may allow for a higher limit. Click here for county limits.
  • Must be a first time buyer, or not have owned a home within the last three years.

The last thing to remember about this program is that it is a recoverable grant. You will have a lien, or silent second mortgage on your home for whatever amount MSHDA gives you. If you were to refinance or sell your home, the state could force you to pay back some, or all of the grant to do so.

This program has made a huge impact in and around our communities in a great way. First time buyers have enough to worry about once they do own the home, so being able to save $7,500 can be the perfect helping hand for those in need. For questions, contact one of our Mortgage Loan Officers at 877.312.9033.