Sunday on the Homefront–WHEP Results

Well, I have some great news!

We went to WHEP today (Washtenaw Housing Education Program), which is a special home-buying course put on by the Michigan State University Extension Office for free. We attended the October session at the request of our real estate agent and I’m glad we did.

Many governmental companies come together along with MSU to help out home buyers. This is especially helpful since the market crash in 2007-2009. The state of Michigan also offers incentives for going through this class in the form of grants for home buyers. The MSHDA (Michigan State Housing Development Authority) offers a whopping $7500 to home buyers in Michigan for taking this course. They pay up to 2% of your down payment and then the rest is to cover closing costs. It is available to partner with any other loan, including FHA, USDA, and other governmental loans.

The USDA Department of Rural Development also offers a zero down payment, low interest loan with no PMI insurance required. This is a HUGE money saver. PMI (Protected Mortgage Insurance) is extremely expensive and currently does not EVER come off of FHA loans in the state of Michigan. Since the person borrowing the loan has an extremely low down payment required, the PMI insurance is there to protect the mortgage lender because the owner does not have a large invested interest into the home.

Because of PMI insurance and interest rates, a $100k home could easily cost $250k over the life of the loan.

Here’s the good news. Not only do we qualify for the down payment assistance of $7500 from MSHDA, but we also qualify for the USDA loan. Between the two we will have closing costs covered, low interest, no PMI insurance AND 2% of the principle paid off as soon as we move in. We will be setting ourselves up for an amazing future! Instead of saving $10k and spending it all in closing costs and down payment, we will only need to spend enough money to cover the inspections and our Earnest Money Deposit, which we get back at closing.

Within the next two weeks I will be contacting the USDA dept in Flint, MI and getting our loan application put together. There is a slight chance the USDA won’t approve us of course, but we have met all their external qualifications, so I’m keeping my fingers crossed. So far, it looks like the hardest part of this journey will be finding the right property for us!

We will take any prayers, luck or good wishes you will send us! Our homestead dreams have the possibility of coming true now!



8 Comments Add yours

  1. Sounds marvellous! Good luck from us.

    1. Thank you! It was more than we hoped for!

  2. It’s interesting reading about PMI; in the UK there is something similar called PPI (payment protection insurance) which the government decried was largely mis-sold (as many people are covered by their job contracts and other insurance over here). My husband had it on both his credit cards and mortgage and we recently claimed it back – it came to more than £12,000!! It’s been a godsend to us as it means we have been able to pay more off the mortgage and keep me home with our baby, but it’s incredible that we could have ‘lost’ so much in less than 15 years of paying it!
    So glad you are on your way – exciting times ahead!

    1. That’s a HUGE amount of money! Wow! Right now, since the market crashed a few years ago, almost everyone who doesn’t put 20-25% down on a house gets PMI. Because of that same market crash, no one has that kind of money, so those companies are making a killing off that insurance. Thankfully, we’ll be able to avoid it.

      1. I know, we were gobsmacked (is that a phrase you use in America?). New buyers also have to put down huge payments up front here too nowadays – it’s a big shock to buyers because 7 years ago the lenders were offering 110% mortgages with NO down payment – no wonder the markets crashed. Completely irresponsible.
        It’s why we have stuck to our little house. If we wanted anywhere with land we would have to fork out about 300k. That’s over 10 times our annual income now. Completely impossible – unless we win the lottery. Which we don’t do… So erm, impossible!

      2. I think I understand “gobsmacked” but no, we don’t use that phrase, lol.
        There were similar things happening here to crash the market. People were taking out huge ARM’s (Adjustable Rate Mortgages) and they would be fine for 5-10 years and then the interest rates spiked and almost doubled some people’s home payments. They couldn’t pay them and they went into foreclosure. A lot of people also borrowed about twice what they could afford, so any upward adjustment caused them to lose their homes.

  3. I’m glad to read about a future homebuyer researching and understanding different programs that make purchasing more affordable. Good luck to the both of you on your journey and thanks for sharing!

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