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| Landlords |
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WHO |
| The Property Improvement Program (PIP) - Landlord loan is intended for landlords who want to improve their investment properties within the state of Michigan. |
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WHAT |
| With a low interest rate PIP loan, you can decide what kind of repairs are necessary to maintain or improve your home! Depending on local building codes, you may be able to do some of the work yourself, financing only the cost of materials, but not the cost of your own labor. If a contractor is required or preferred, the individual or company must be state licensed. Almost any type of permanent general improvement can be made. For example: |
- Install insulation
- Install ramps, handicap accessible bathrooms, lifts, etc.
- Replace the heating system (including wood burning)
- Add new siding
- Paint (including removing lead based paint)
- Replace the roof
- Install new windows
- Remodel the kitchen or bathroom
- Upgrade electrical wiring
- Finish an attic or basement
- Even add new rooms and a garage
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HOW |
Decide what improvements you want to make and get estimates. Go to a participating bank, savings and loan association, or community housing office and ask for a MSHDA Property Improvement Program loan application.
You may qualify for a home improvement (non-owner occupied) loan if: |
- You own or are buying a 1- to 24-unit property (no corporate ownership, "DBA" partnerships, trusts, etc.)
- You are a reasonable credit risk, demonstrate an ability to repay the loan and meet MSHDA's underwriting criteria and
- Improvements are permanent and will protect or improve basic livability or energy efficiency of the unit(s)
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Contact a Participating Lender or Community Agent for an application.
Depending upon your financial ability and the amount borrowed, you may take up to 20 years to repay the loan (30 years if the loan exceeds $60,000). Lack of equity (the value of the property beyond the amount owed) is generally not a factor.
A 2% origination fee ($100 minimum) is financed in the loan amount (not out-of-pocket).Maximum Loan Amounts* Per Property are: |
One Unit |
$25,000 |
Two Units |
$50,000 |
Three Units |
$75,000 |
Four - 24 Units |
$100,000 |
| *must include origination fee |
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The bank, savings and loan association, credit union and/or community agent where you apply for the loan will decide if you meet the guidelines for a MSHDA PIP Loan.
There are no upper income limits for borrowers, but the gross rent on each unit, including the average for heat, water, and electricity, cannot exceed MSHDA's rental limits for the community during the first year of the loan term.
MSHDA Rental Limit's for 2008
All loans, regardless of the loan amount, are secured by a mortgage on the property.
Title insurance is required and is an "out-of- pocket" expense.
The interest rate is a fixed 8 percent. The annual percentage rate (APR) will be higher depending upon loan amount, origination fee, etc.
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PRELIMINARY DOCUMENTATION NEEDED
TO APPLY: |
- Completed MSHDA Credit Application (obtain from lender or community agent).
- If more than one unit, proof of the number of units contained in the structure (photocopy of local property assessor's card, rental license, etc.).
- Current paycheck stubs for the most recent four weeks.
- Previous federal and state income tax returns including W-2 forms and all schedules (generally one year for owner occupied and two years for non-owner occupied).
- Photocopy of hazard (homeowners) insurance policy page showing limits of coverage.
- Written estimates from state licensed contractor(s) or written estimates from supplier(s) on their letterhead.
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