About the Loans

CDBG-ONLY Loans: These loans are financed only using CDBG dollars and require monthly installment payments. The interest rate is between 0% and 3% and is determined by the Housing Programs Advisory Council. There are no application or closing fees. If the loan is over $2,500, a mortgage is placed on the property.

CDBG Deferred Loans: These loans are in conjunction with another source of funding which requires monthly installment payments. The interest rate may be between 0% and 3% and is determined by the Housing Programs Advisory Council. There are no application or closing fees. If the loan is over $2,500, a mortgage is placed on the property. This loan is repaid when the homeowner no longer lives in the home.

RAP II Loans: These loans are used for significant rehabilitation projects exceeding $25,000. Up to $25,000 from a CDBG Deferred Loan is used to match the RAP II funding. The interest rate is 1% and the term of the loan is up to 30 years. There is a $25 application fee. A mortgage is placed on the property and the homeowner makes monthly payments to MSHDA.

PIP Loans: These loans can be used either along with CDBG loan dollars or can be applied for alone. An origination fee equal to 4% of the loan amount will be included in the loan amount. The interest rate charged is determined by the household income. Rates vary from 1% to 8%. There is a $50 inspection fee that can be paid directly by the homeowner or financed into the loan amount. If the loan is over $7,499, a mortgage is placed on the property.

Rental Properties: The Property Improvement Program (PIP) is also available to landlords for improvements to rental properties with one to four units. Loans up to $25,000 for a one unit property or an average of $12,000 per unit for a two to four unit property. The loan cannot exceed $48,000. The interest rate is set at 8% and the landlord is not required to meet any income requirements. An origination fee equal to 4% of the loan amount will be included in the loan amount. There is a $50 inspection fee that can be paid directly by the borrower or financed into the loan amount. If the loan is over $7,499, a mortgage is placed on the property. Commercially prepared title insurance is a requirement for this loan.

The landlord is required to meet rental limits (including average for heat, water and electricity) for a one-year period.

Shiawassee County Rental Limits

(Incl. average of heat, water and electricity)

Rent Limit

Number of Bedrooms

0

1

2

3

4

$361

$452

$545

$758

$812

*Based on 10/1/98 Fair Market Rate; Subject to change by MSHDA.

 

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