Lansing, MI — The Michigan Senate has passed a significant piece of legislation aimed at expanding homeownership opportunities across the state. House Bill 5032, which was approved recently, will update the legislative cap on Michigan State Housing Development Authority (MSHDA)-backed single-family mortgages, linking it to an index tied to 90% of the IRS maximum sales price. This new approach replaces the previous flat cap of $224,500, which has been in place since 2009.
The change comes as Michigan’s housing market has undergone a dramatic shift over the past decade. According to the Michigan Realtors Association, the average price of a home in Michigan was approximately $100,000 when the cap was first set. However, by July 2024, that figure had more than tripled to an average of $301,000.
The new bill will allow for annual adjustments to the cap, ensuring that it keeps pace with changes in the housing market. The Michigan State Housing Development Authority (MSHDA) believes this reform will better reflect current home prices, making it easier for residents to access affordable home financing.
“The adjustment will allow for annual updates that keep pace with housing market changes and bring Michigan in line with other Midwest states,” said the MSHDA in a statement.
Amy Hovey, MSHDA’s Chief Executive Officer and Executive Director, emphasized that the reform is a crucial step toward ensuring more Michigan residents have access to homeownership. “By making this needed reform, we’re ensuring more residents have access to the financing they need to secure an affordable home,” she said in a news release.
The change is expected to address growing concerns about home affordability in Michigan, as rising property values have made it increasingly difficult for first-time buyers and lower-income families to purchase homes.
This bill brings Michigan’s housing policies more in line with neighboring states that have made similar adjustments to mortgage caps in response to rising home prices. Proponents argue that the new legislation will offer a much-needed boost to the state’s housing market and make homeownership more attainable for many Michiganders.
With the bill now passed by the Senate, it will move on to the Michigan House of Representatives for further consideration. If approved, the new policy could have a significant impact on the state’s housing landscape, improving opportunities for homebuyers across Michigan.
