Low-Interest Mortgages from Michigan Program in Detroit, 7 Other Cities
A Michigan government-backed program is offering low-interest mortgages in Detroit and 7 other cities across Michigan in an effort to boost lagging home sales.
"Prospective homeowners in Detroit, Pontiac, Flint and five other Michigan cities can get middle-class mortgages with low 3.1% interest rates and miniscule down payments under a new $30-million state initiative aimed at simulating housing markets in still-depressed areas.
Although the lending initiative is part of the Michigan State Housing Development Authority’s existing MI First Home program, it is being extended to individuals or families in those cities who are not necessarily making their first purchase of a house or condo.
As well, the program’s standard interest rates for 30-year, fixed-rate mortgages (4.1% or 4.7%) have been lowered to sweeten the incentive for this new group of borrowers to get into a home.
[']While many communities have seen dramatic improvements in their real estate markets, this should provide a welcome incentive and help boost sales in areas of the state that need it the most,['] Gov. Rick Snyder said in a released statement.
To be eligible, borrowers generally must have a credit score of at least 640. Their income cannot exceed $77,520 for an individual or couple, or $90,440 for a family of three or more. And the home’s sale price shouldn’t exceed $224,500.
The program’s mortgages are normally Federal Housing Administration-type loans and call for a 3.5% down payment. However, there is down payment assistance available of up to $7,500. Those who sign up for this assistance will pay a slightly higher 3.6% rate on their 30-year, fixed-rate mortgage.
Funding for the loans — $30 million — comes from the housing development authority’s previous sale of mortgage revenue bonds. There is enough money for about 300 loans, which are offered on a first-come, first served basis by applying through a loan officer in the authority’s network. The list of experienced loan officers is posted online.
The authority plans to buy and hold each mortgage loan. Carol Brito, a program and business develpment manager with the authority, said they don’t anticipate any undue risk from extending such generous lending terms.
[']We like to believe that many of these people are good risks for us as a long-standing mortgage holder,['] she said."