In the previous article, we discussed the basic types and characteristics of mortgages. The table below shows some of the more specialized types of mortgages, as well as government programs and tax credits, available to you as a northern Michigan buyer, as well as eligibility requirements and pros and cons of each. Knowing your options is key; you may discover that one of these types of loans meets your needs much better than a typical fixed rate or adjustable rate mortgage.
Loan Name | Description | Pros | Cons |
Federal Housing Administration (FHA) Loans | The FHA approves certain lenders to issue FHA loans, which are insured by the FHA in order to protect the lender. FHA loans are popular for first-time buyers because they are easier to qualify for and require lower down payments than other types of loans. |
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United States Department of Agriculture (USDA) Loans | USDA loans, also called Rural Development (RD) loans, offer many financial benefits for those who qualify. Eligibility is limited to buyers who earn up to 115% of the county’s median income, and only for homes in certain areas as identified by the USDA. Many areas in Bellaire, Mancelona, and other parts of Antrim County qualify. To check income and area qualifications, click here. |
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Department of Veterans Affairs (VA) Loans | VA mortgages are available to any veterans of the United States armed services, as well as widows or widowers of veterans. VA loans are flexible and are increasing significantly in popularity. |
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Construction Loans | Construction loans are used to purchase homes that are newly-built or in the process of being built. Construction loans can either have two steps – a short-term loan during construction that rolls over into a mortgage once the home is occupied – or be a single loan from construction through occupancy. Construction loans are a small part of the mortgage market, but may be an attractive option for those looking to build. There’s no shortage of available land in northern Michigan! |
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Land Loans | Land loans, also called lot loans, are used to purchase land planned for residential use in the near future. |
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Michigan State Housing Development Authority (MSHDA) offers different programs to provide financial assistance to qualified homebuyers. Be sure to ask your local lenders if you qualify for these programs.
MSHDA Down Payment Assistance
The MSDHA offers down payment assistance, in the form of an additional loan of up to $7,500, on qualifying FHA and RD loans. This program is available to help both first-time and repeat homebuyers in targeted areas of Michigan, including all of Antrim County. This additional loan is treated as a second mortgage, but charges no interest and has no monthly payments. Repayment is due at sale or transfer of the property, or when the first mortgage is refinanced or paid in full.
MSHDA Mortgage Certificate Credit
In some cases, homebuyers may qualify for a tax credit, called the MSDHA Mortgage Certificate Credit, equal to 20% of their annual mortgage interest. Antrim County is one of the eligible areas for this program.
If you are interested in learning more about these types of mortgages and which may be best for you, contact your local bank or mortgage lender.
If you are interested in hiring a professional realtor who can guide you through this process, Donna Gundle-Krieg loves working with people and would be happy to provide you with more information. She has many exciting listings available in great Antrim County locations, which you can view here. You can contact her at (231) 350-8507 or dokrieg@gmail.com to learn more.