No place like homeownership: New programs aid first-generation homebuyers

It’s no secret that affordable housing and low-interest mortgage loans are hard to find in today’s market. As the housing crisis grows, Michigan communities are grappling with finding the resources needed to make homeownership attainable for all.

In February, community foundations, local organizations, and civic leaders convened at an East Michigan Council of Governments (EMCOG) housing summit to tackle these challenges head-on in the Great Lakes Bay Region.

During the summit, participants discussed a range of strategies to alleviate housing insecurity, including new state-level initiatives – the Michigan First-Generation Down Payment Assistance program and a Statewide Housing Plan.

MSHDA First-Generation DPA

The Michigan First-Generation Down Payment Assistance program is a limited-time pilot initiative aimed at helping first-generation homebuyers purchase their first home. Funded by an $8 million allocation from the State of Michigan, it provides up to $25,000 to cover down payments, closing costs, and prepaid escrow expenses.

The program is available statewide and expected to help more than 320 families across Michigan. By lowering the upfront costs of buying a home, the program seeks to make homeownership more accessible and set families on the path toward long-term financial stability.

“We’re very excited this program was able to be launched,” says Veronica Depotty, a Housing Education Specialist with MSHDA.

“This is a program focused on first-generation homebuyers. Specifically, those who don’t have homeownership in their immediate family, have aged out of foster care, or have been emancipated.”

Eligible buyers must purchase a home intended to be their primary residence and have not owned property in the last three years. Additionally, the borrower’s parents or legal guardians must not currently own a home and should not have owned one in the past three years. Individuals who have aged out of foster care or have been legally emancipated may also be eligible.

Other requirements include:

• Buyers must complete in-person homebuyer education with a HUD-certified counselor.
• Buyers must provide a minimum of 1% cash investment.
• Household income must fall within MSHDA’s household income limits.
• The home’s purchase price must not exceed $224,500.
• Buyers must combine the First-Generation DPA with a home loan (conventional, FHA, or USDA).
• The program cannot be combined with MSHDA’s MI10K DPA loan.
• Satisfy all other MSHDA program requirements.

Interested applicants are urged to begin the process as soon as possible by contacting a participating lender or visiting MSHDA’s website for more information.

The First-Generation program also requires applicants to complete in-person home buyer education with a HUD-certified counselor. Depotty clarified that both virtual and in-person classes are available and highlighted the importance of education.

Because applicants have never owned a home and do not have a biological or adoptive parent with homeownership experience, an in-depth and personalized session with a HUD-certified housing counselor will help explain the responsibilities of owning a home.

Jonathan Jarret from The State Bank also spoke about educating homebuyers.

“It’s one thing for us to close and get you the keys to the house,” he says. “I want to make sure you have the capacity and competency to understand what it’s going to take to keep that house.”

Michigan's Statewide Housing Plan

In June 2022, Michigan launched its first-ever Statewide Housing Plan. This initiative tackles the state's affordable housing crisis with eight key priorities and 37 objectives, calling on MSHDA and various stakeholders to take action.

Fifteen Regional Housing Partnerships were also formed to aid in the execution of the plan and to create action plans tailored to each region. EMCOG acts as the principal agency for Region G which encompasses Bay, Midland, Isabella, Arenac, Clare, Gladwin, Gratiot, and Saginaw counties.

To view a detailed plan of our area, visit the EMCOG website.