1) You need to find a home that you can afford, and you need to be a low - moderate income home buyer. this is good news though, because money of the homes that need some rehad work are very inexpensive and affordable. Also, the low - moderate income requirements are actually pretty high. Check our website for the chart.
2) After you find your home, Garfield Development will pay for up to $40,000 in major upgrades and lead abatement, all following energy star efficiency requirements. Also, Garfield hires the contractors to do this work, and manages the construction for you after closing, so you do not need to worry about that. but if you would like to be involved, and there are some extra funds, we will let you help us with choosing your colors, and some of your finishings!
3) After the renovation has been completed, you are only responsible to pay back a portion of the $40,000 that we give to you. We make the calculation with an appraisal. When you purchase the home, we have an appraiser tell us what the house is worth, and that is usually the sales price. We submit the plans for the rehab that will be done, and he tells us what he thinks the new value will be based on these upgrades. Once the project is complete, he comes out to re-inspect and certify the new value, and that is what we base the amount owed on. You are only responsible for the difference between the sales price, and the new appraised value. so, if you buy the home for $50,000, then garfield puts $40,000 of work into it but the home only appraises for $60,000 - you only owe $10,000 on the second mortgage and the additional $30,000 is forgiven!
4) The second mortgage is executed by the Michigan State Housing Development Authority (MSHDA), and it is a special program that the state has created to help stimulate homeownership for low - moderate income familys by providing safe affordable and sustainable housing. This is why they are giving away a protion of the money. The second mortgage for the difference between the sales price and the appraised value is a silent second mortgage note. The are no monthly payments on it, there is no interest charged, and it is deferrable for up to 50 years. That means that you don't pay it back until you sell your home, and by that time your home should be worth a lot more than you owe!
check out the website http://www.garfielddevelopment.org - you can download and application and email it to Kevin Perdue, our project co-ordinator email@example.com or you can call him at the office 616.241.2443 if you have any questions.
Also, please feel free to email me if you have any additional questions about this great program, or how to obtain mortgage financing and I would love to help you out!
Board Chair, Garfield Dev. Corp.
Mortgage Professional, Treadstone Mortgage