Preparing to buy a house

Today’s housing market is in recovery, but many Michigan first-time buyers are still struggling.

People standing in front of a house that has a for sale sign, receiving the keys from the realtor.

Owning a home plays a critical role in communities across America, according to the U. S. Department of Housing and Urban Development (HUD). The success of several government programs has helped the housing market recover from the 2008 economic recession. However, many Michigan first time buyers and homeowners are still struggling. Let’s take a closer look at what is happening with home purchasing.

First-time homebuyers are facing tighter lending standards. Those with limited money for down payments and less-than-pristine credit histories are finding it difficult to qualify for a mortgage. The Michigan State Housing Development Authority offers programs to address these issues. MI First Home strives to assist first time homebuyers and some repeat homebuyers with down payment assistance. MI Home Loan Flex is designed for new or repeat homebuyers to purchase a home with a Conventional, FHA, RD or VA mortgage while foregoing some of the more restrictive aspects of the MI First Home program; down payment assistance is also available for those who qualify. 

Michigan State University Extension offers education on the process of purchasing a home, either through an online or group class. Topics include shopping for a home, applying for a loan, the closing, and keeping the home. Group classes can be found in the Events channel on MI Money Health. The 4 to 6-hour online class can be done at your convenience. A certificate of completion is provided for each education option. Some lenders, including MSHDA, are now requiring a qualified home buyer education course be taken before closing.

On the bright side, lenders have slightly loosened mortgage standards and many young adults are getting tired of living with roommates or their parents. Lenders are looking for more business, as the refinance surge during the past several years has already reached most current homeowners.

The nation’s most affordable homes sought by first-time home buyers are also the most likely to be underwater in some major urban areas, according to a recent report by Zillow. This means some homeowners with a mortgage are unable to sell their homes for enough profit to afford down payments on new ones and comfortably pay selling expenses.  Overall, negative equity has been steadily declining since 2012.

Foreclosure numbers have declined and are at lower levels compared to 2005. Unemployment rates have also gone down in recent years, according to the Bureau of Labor Statistics, which makes homeownership attainable and mortgage payments more sustainable

Michigan State University Extension offers education on the process of purchasing a home, either through an online or group class. Topics include, shopping for a home, applying for a loan, and the closing among other topics. The 6-8 hour online class can be done at your convenience and a certificate of completion is provided for both classes. Some lenders are now requiring a qualified home buyer education course be taken before closing.

Questions? Contact your local MSU Extension office to speak with a housing counselor. In other areas, find a housing counselor.

This article was published by Michigan State University Extension. For more information, visit http://www.msue.msu.edu. To have a digest of information delivered straight to your email inbox, visit http://www.msue.msu.edu/newsletters. To contact an expert in your area, visit http://expert.msue.msu.edu, or call 888-MSUE4MI (888-678-3464).


Michigan State University Michigan State University Close Menu button Menu and Search button Open Close