For buyers
The Michigan details behind the monthly payment.
Buying your first home is more than finding a place you love. It is knowing which numbers can move, which programs may help, and what to ask before you sign.
01 / The tax reset
Why the seller’s tax bill is not your number.
Michigan’s Proposal A generally limits how quickly a property’s taxable value can rise while the same owner holds it — usually to the lesser of 5% or inflation. That is the “cap” people mean when they talk about property-tax protection.
The State Equalized Value (SEV) is different. It is an assessed measure of market value used in the tax system. When a home sells, the taxable value uncapping can reset in the year after the transfer, often moving closer to the SEV. The result: a seller who has owned a home for years may have a much lower taxable value than a new buyer will.
A simple illustration
On a $400,000 purchase, an illustrative $200,000 SEV and 40 mills could mean about $8,000 a year in taxes — around $667 a month. A $4,000 seller tax bill does not make the same $4,000 bill your baseline. The actual result depends on the address, millage, exemptions, and assessor.
Before you make an offer, ask the lender to model the payment with a reasonable post-closing tax estimate. After closing, file the Property Transfer Affidavit (Form L-4260) with the local assessor within 45 days, and ask about the Principal Residence Exemption (PRE) and Form 2368 if the home will be your primary residence.
MI Home Loan + MI $10K DPA
MSHDA programs can pair an eligible first mortgage with down payment assistance that is often structured as a 0% second mortgage with no monthly payment, repaid when the home is sold, refinanced, or paid off. A participating lender must confirm current terms.
MI Home Loan Flex
A flexible MSHDA option may help buyers who do not fit every traditional first-time-buyer path. Income, credit, purchase-price, and property requirements still matter — especially in a higher-cost market like Ann Arbor.
Mortgage Credit Certificates
Ask a lender whether an MCC could provide a federal tax credit based on mortgage interest. It is a separate eligibility question, and rules, limits, and availability can change.
02 / Help with the upfront cash
Make the lender conversation specific.
MSHDA is a starting point, not an automatic approval. Eligibility may include income limits, credit requirements, purchase-price limits, minimum buyer contribution, homebuyer education, and liquid-asset rules. Ask early — and ask for the total cash-to-close, not just a down-payment percentage.
03 / The rest of the budget
The down payment is only one line.
Plan for a complete cash picture. Exact amounts depend on the contract, lender, property, and timing.
2–3%
A planning range for buyer closing costs. Ask for a lender’s Loan Estimate.
Earnest money
A deposit that shows good faith and is credited according to the contract at closing.
Inspection + appraisal
Separate costs that help you understand condition and support the lender’s valuation.
Prepaids + reserves
Taxes, insurance, escrow reserves, moving costs, and the first repairs after move-in.
- What will the monthly payment be after property taxes are uncapped?
- Do I qualify for MSHDA programs, and does this purchase price fit the limits?
- What are my total cash requirements at closing, including reserves and prepaid items?
- Can the seller contribute to closing costs, and how would that affect my offer?
- What happens if the appraisal comes in below the purchase price?
Start with the real numbers