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Down Payment Assistance
The City of Lansing can help you purchase a home through its Down Payment Assistance Program (DPA).
The DPA Program (hereafter "Program") was authorized by the City of Lansing Development Office in 2004 to replace our existing down payment assistance program for assisting low and moderate income persons in purchasing their first home. The City of Lansing Development Office has elected to allocate a portion of its federal Department of Housing and Urban Development's (HUD) HOME Investment Partnerships Program (HOME) funding for home ownership assistance. This program is being made available through the city's Development Office. Funds are reserved on a first-come, first-served basis.
The goal of the Program is to expand home ownership opportunities for income-eligible households and to increase homeownership within the city of Lansing. Assistance is based on need, not to exceed 6% of the acquisition cost. It is available to each eligible household for down payment and reasonable closing costs incurred in the purchase of property located within the Lansing city limits. Homes purchased with Purchase funds cannot be located in the 100-year flood plain (verified by the City of Lansing Zoning Office 483-4066, Monday - Friday, 8:00 AM - 5:00 PM).
Program assistance is provided as a zero-interest loan subordinate to the buyer's first mortgage. Half of the loan amount is forgiven after five-years. The other half becomes due and payable in full when the house ceases to be the loan recipient's principal place of residence. However, if the loan recipient purchases another home within the Lansing city limits to be occupied as their principal place of residence, the loan will be completely forgiven at that time. The city's loan is secured by a promissory note and mortgage subordinate to those of the primary lenders. First mortgages must have a fixed-rate and include escrow for taxes and insurance.
A purchaser of an eligible new or existing single-family residence may apply for Program funds after they have attended homeownership counseling, been pre-qualified by a first-mortgage lender and put in an offer on a home. A home owner cannot apply for Program funds after the mortgage loan has been closed. Program funds cannot be provided to a homebuyer who is refinancing an existing mortgage or land contract, or purchasing a home on a land contract.
Funding is limited to households that purchase a home for their own occupancy. This program does not allow non-occupying co-signers, except on a case-by-case basis to achieve program goals. For example, co-signers may be permitted to reach under-served target populations such as extremely low income people with disabilities.
Property being purchased must be currently offered for sale by the owner-occupant or vacant. Funding may also be available to a current tenant who wishes to purchase the single-family home in which they currently reside. Purchasers may not displace a tenant.
The applicant's household income must not exceed the maximum income amounts for the applicable household size.
Gross annual income includes income from all household members over the age of 18, regardless of relationship. Income received for the support of minor children, such as social security, child support, etc., must also be included. Adults claiming full-time student status need to submit a copy of their financial aid or scholarship information
Funds may be used for down payment, closing costs, and pre-paid items. Funds can be used to reduce principle and adjust ratios.
Funds may not be used to pay off any existing debts.
Purchasers cannot have more than $7,500.00 in liquid assets.
Purchasers must contribute a minimum of $500.00 toward the home purchase.
Funds may only be used to obtain a fixed-rate first mortgage through a licensed lender. No ARMS, no balloons, or land contracts allowed.
All mortgages must demonstrate that property taxes, and homeowner's insurance will be escrowed as part of the first mortgage.
Funds can be used in combination with employer assisted down payment incentives, as well as Individual Development Accounts (IDAs). Funds cannot be used in combination with Michigan State Housing Development Authority (MSHDA) down payment assistance, but can but used with a MSHDA mortgage.
Borrowers cannot receive cash back at closing.
Only single-family homes will be considered. No multiple-unit dwellings. Condominiums and modular units are eligible. Homes must be permanently affixed to a slab, crawl space, or basement.
The city of Lansing Development Office administers the DPA program. This program requires lenders to submit all required program documentation directly to the Development Office for approval. Purchase price of a single-family, owner-occupied home may not exceed $117,000 for all existing homes and $195,000 for newly constructed homes.