Mi 10k Dpa Loan Requirements

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Buying a home can be a major challenge, especially for first-time homebuyers who don't have much savings for a down payment. That's why it's great news that the Michigan State Housing Development Authority (MSHDA) has just announced a new program that provides up to $10,000 in down payment assistance. This program, called MI 10K DPA, aims to help more Michiganders achieve the dream of homeownership and build stronger communities.

What is MI 10K DPA?

MI 10K DPA is a forgivable loan program that offers up to $10,000 in down payment assistance to eligible homebuyers in Michigan. A forgivable loan means that you don't have to pay back the loan unless you sell, refinance, or transfer your home within five years after closing. If you meet the program requirements and keep your home as your primary residence for at least five years, the loan will be fully forgiven.

Who is eligible for MI 10K DPA?

To qualify for MI 10K DPA, you must meet the following criteria:

You must be a first-time homebuyer, defined as someone who has not owned a home in the past three years, or a veteran or active-duty military personnel.
You must have a credit score of at least 640 and a debt-to-income ratio of 45% or less.
You must purchase a single-family home, condominium, or townhome in Michigan that is your primary residence.
Your household income cannot exceed the program limits, which vary by county and household size. For example, in Wayne County, the limit for a household of one is $60,800, while the limit for a household of four is $86,850.
You must complete a homebuyer education course from an approved provider, which covers topics such as budgeting, credit, mortgages, and home maintenance.

How does MI 10K DPA work?

Here's an example of how MI 10K DPA can help you buy a $150,000 home with a 3% down payment:

You contribute $4,500 as your down payment (3% of $150,000).
MSHDA provides $10,000 as your down payment assistance, which is a 0% interest, forgivable loan.
You obtain a mortgage from an approved lender for the remaining $135,500, at a fixed interest rate of 3.5%.
You pay a monthly mortgage payment of about $610, which includes the principal, interest, taxes, and insurance.
You live in the home as your primary residence for at least five years, making timely payments on your mortgage and property taxes.
The $10,000 loan is forgiven and removed from your mortgage balance after five years, reducing your monthly payment by about $56.

What are the benefits of MI 10K DPA?

MI 10K DPA can provide several advantages for qualified homebuyers, including:

A lower upfront cost to buy a home, which can help you preserve your savings, reduce your debt, and improve your cash flow.
A lower monthly payment, which can make your housing more affordable and stable, especially if you have other debts or expenses.
A higher buying power, which can increase your options and chances in a competitive housing market.
A greater sense of security and pride, knowing that you have a place to call your own, build equity, and create memories.

How can I apply for MI 10K DPA?

If you're interested in MI 10K DPA, you can contact an approved lender or housing counselor in your area, who can help you determine your eligibility, guide you through the application process, and provide you with more information about homeownership and financing. Some lenders may also offer other programs or incentives that can complement MI 10K DPA, such as closing cost assistance, tax credits, or flexible underwriting.

Conclusion

MI 10K DPA is a valuable resource for Michigan residents who want to buy their first home but face financial barriers. By offering up to $10,000 in down payment assistance as a forgivable loan, the program can help more people access affordable and sustainable housing, boost local economies, and realize their dreams. If you're considering buying a home in Michigan, don't miss this opportunity to see if MI 10K DPA can help you get there.

Image source: Stockton Mortgage

Image source: MSHDA

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