State officials on Tuesday announced a new assistance program for first-time home buyers in Michigan.
The Rate Relief Mortgage program, offered through the Michigan State Housing Development Authority (MSHDA), will provide first-time buyers loans at one percent below the market rate. Currently, that would make the interest rate on a 30-year mortgage though a MSHDA-approved lender 5.375%.
In announcing the program, Amy Hovey, MSHDA CEO & Executive Director, called the new mortgage offering a big deal.
“This will save over $100 a month for the average homebuyer purchasing through this program. This will allow more Michigan families to enter into home ownership in a time that the state we’re in is the most difficult to do so," she said.
The Rate Relief program is open to first-time homebuyers with a qualifying income at or below 80-percent of the Area Median Income and a credit score of at least 640. The purchaser must get the loan through a MSHDA-approved lender.
“Home ownership provides a stable housing cost for our families in a time where rental rates are increasing up to 25% a year in some parts of our state,” she said.
“We know that stable housing provides for stable families, stable communities, allows families to prosper in their education, in their health, in their social structure. We know it increases the tax base in our neighborhoods. It provides for stable employment opportunities for families.”
Hovey says the program is being funded through a partnership with the Federal Home Loan Bank of Indianapolis, which is purchasing a $50 million bond issued by MSHDA.
She said she expects the funding to go quickly, and within six months to “be long gone."