Step Forward Down Payment Assistance (DPA) is a federally-funded forgivable down payment assistance loan program offered in 61 eligible zip codes in 10 Michigan counties. The Step Forward Program has allocated $20 million to the Step Forward DPA program. Funds are limited and are available on a first-come, first-served basis. The amount of the assistance is $15,000 and can only be used in conjunction with a MSHDA MI Home Loan.
This loan program will assist in neighborhood stabilization and promote homeownership in areas of the state that still reflect high rates of delinquencies and foreclosures, negative equity, bank-owned properties (REOs) and short sales.
The Step Forward DPA can be used toward the down payment, closing costs, and prepaids/escrows on the purchase of a single-family principal residence. The balance of the $15,000 (if applicable) must be used to reduce the MSHDA MI Home Loan first mortgage principal balance.
Funds Available: $20 million
Available Areas: 61 eligible zip codes
Program Launch Date: Lenders may make new reservations beginning on or after October 8th, 2018.
First Mortgage: Must be a MSHDA MI Home Loan FHA, VA, RD Guaranteed or conventional loan. MSHDA MI Home Loan guidelines apply. Borrowers must use a MSHDA approved lender: MSHDA Experienced Lender List More details: www.MichDownPayment.com and Lender Online (password required)
Second Mortgage: Step Forward DPA, full $15,000 disbursement (MSHDA MI Home Loan Single Family DPA guidelines apply)
Terms: 0% interest rate, no monthly payments, five-year term, forgiven 20% per year. The lien is discharged after the 5th year if the purchasers still own and occupy the property as their primary residence.
Down Payment Assistance: $15,000 second mortgage is applied toward down payment, closing costs, prepaids/escrows and principal reduction of the MSHDA MI Home Loan first mortgage.
Asset Limit: $10,000 in liquid cash assets (retirement accounts do not count toward asset limit)
Income: MSHDA MI Home Loan income limits apply and are based on total household income. Income limits vary by county and the number of members in the household, with limits set between $67,300-$130,340. More details: www.MichDownPayment.com and Lender Online (password required)
Purchase Price: $224,500, consistent with MSHDA MI Home Loan statewide purchase price limit
Credit Score: 640 minimum credit score; 660 minimum credit score on manufactured homes
Requirement: Borrowers who have received a mortgage loan from any other Step Forward Michigan programs are not eligible for this program.
Additional Documentation: Dodd Frank Certification must be signed by each borrower stating that they have not been convicted within the last 10 years of a mortgage or real estate related felony, larceny, theft, fraud, forgery, money laundering or tax evasion.
NEXT STEP: CONTACT A MSHDA EXPERIENCED LENDER TO SEE IF YOU QUALIFY.