WHO CAN APPLY?

The Property Improvement Program offers low-interest home improvement loans to landlords who want to improve their investment properties.

The property must be located in Michigan.  The borrower must own or be in the process of purchasing the property and must be a natural person (limited liability company, corporation, partnership or similar entities are not allowed). The property cannot have over 11 units. There are no income limits for landlord borrowers, and you must have a credit score of 620. Higher loan amounts will require a higher credit score of 660.

Units up to 11 are eligible and the gross rent on each unit cannot exceed MSHDA's rental limit for their community for the life of the loan. See MSHDA Rental Limits for the current rent limits.

WHAT HOME IMPROVEMENTS ARE ELIGIBLE?

Eligible improvements must substantially protect or improve the basic livability or utility of the property. Eligible improvements include but are not limited to the following:

• Roof repair or replacement;
• Insulation, siding, window replacement, and other improvements that increase the energy efficiency of the property;
• Central air conditioning and furnace replacement;
• Kitchen and bathroom remodeling;
• Permanently installed carpeting (wall-to-wall) and built-in kitchen appliances (must be permanently affixed as an integral part of the kitchen, hard-wired or plumbed);
• Ramp installation;
• Attic and basement finishing;
• Upgrading electrical wiring;
• Building an addition;
• Walkway and driveway installation;
• Lead paint hazard remediation;
• Garage repair and construction (not to exceed 800 square feet in area). Carports are also allowed;
• Decks and gazebos that are NOT for hot tub use or around a swimming pool;
• Fences (chain link, brick, wood, iron);
• Fireplaces (indoor);
• Pole barns and utility buildings on a permanent masonry / concrete foundation;
• Fire suppression sprinkler system (indoor);
• Solar water heating systems;
• Solar room sunspace / solarium (permanently installed for use as a sun room, family room);
• Windmills for purposes of furnishing power to residential structures;

HOW MUCH CAN I BORROW?

• Single-family rental unit – up to $25,000 (total cumulative loan to value of home cannot exceed 105%)

• Multi-family rental units – up to $12,000 per unit. (total cumulative loan to value of home cannot exceed 105%);

• Multi-family rental units – maximum shall not exceed $25,000 per unit, and maximum outstanding per borrower shall not exceed $100,000 (total cumulative loan to value of home cannot exceed 100%), with minimum credit score of 660 required.

The interest rate is 8%. The annual percentage rate ( APR) will be higher depending upon the loan amount, origination fee, etc.

• Up to 20 years to repay the loan
• No annual fees
• No penalty for early payoff
• Underwriting/loan processing fee in the amount of $100 on loans below $7,500 and in the amount of $200 on loans above $7,500 is financed in the loan amount (not out of pocket)
• A 2% origination fee ($100 minimum) is financed in the loan amount (not out of pocket).
• All landlord loans are secured by a mortgage on the property.
• Title insurance is required and is an “out-of-pocket” expense.

I'M INTERESTED, NOW WHAT ?

You need to decide what improvements you want to make. Depending upon local building codes, you may be able to do some of the work yourself, financing only the cost of materials (you cannot get loan funds to pay your own labor). If a contractor is required or preferred, the individual must be state licensed.

Get estimates from several contractors. For guidance on your dealings with contractors, see Working with Contractors page.

Now you ready to talk to a MSHDA-approved Participating Lender or Community Agent about applying for a loan. Click Participating Lender or Community Agent and look for one that covers your county.

You can call them first to discuss your credit and income, and see if they think you are eligible before you fill out the paperwork. Or you can go ahead and fill out the paperwork first. Either way, at the time you formally apply you will need the following documents:

• PIP Loan Application (click on this to download a copy of the form).
• Contractor’s detailed estimate or detailed list of materials on supplier’s letterhead
• Income verification (most recent one month’s pay stubs, Social Security statement, etc.,)
• Copies of prior year’s tax returns (two years if self-employed, rental property, etc.)
• Proof that property taxes are paid to date (two years)
• Copy of homeowners hazard insurance policy showing limits of coverage.
• Proof of ownership (properly recorded deeds and land contracts tracing title to last recorded warranty deed).
• If more than one unit, proof of the number of units contained in the structure (photocopy of local property assessor’s card, rental license, etc.).