WHO CAN APPLY?

The Property Improvement Program offers low-interest home improvement loans to landlords who want to improve their investment properties.

The property must be located in Michigan.  The borrower must own or be in the process of purchasing the property and must be a natural person (limited liability company, corporation, partnership or similar entities are not allowed). The property cannot have over 11 units. There are no income limits for landlord borrowers, and you must have a credit score of 620. Higher loan amounts will require a higher credit score of 660.

Units up to 11 are eligible and the gross rent on the PIP unit cannot exceed MSHDA Rental limits for one year.

WHAT HOME IMPROVEMENTS ARE ELIGIBLE?

Eligible improvements must substantially protect or improve the basic livability or utility of the property. Eligible improvements include but are not limited to the following:

• Roof repair or replacement;
• Insulation, siding, window replacement, and other improvements that increase the energy efficiency of the property;
• Central air conditioning and furnace replacement;
• Kitchen and bathroom remodeling;
• Permanently installed carpeting (wall-to-wall) and built-in kitchen appliances (must be permanently affixed as an integral part of the kitchen, hard-wired or plumbed);
• Ramp installation;
• Attic and basement finishing;
• Upgrading electrical wiring;
• Building an addition;
• Walkway and driveway installation;
• Lead paint hazard remediation;
• Garage repair and construction (not to exceed 800 square feet in area). Carports are also allowed;
• Decks and gazebos that are NOT for hot tub use or around a swimming pool;
• Fences (chain link, brick, wood, iron);
• Fireplaces (indoor);
• Pole barns and utility buildings on a permanent masonry / concrete foundation;
• Fire suppression sprinkler system (indoor);
• Solar water heating systems;
• Solar room sunspace / solarium (permanently installed for use as a sun room, family room);
• Windmills for purposes of furnishing power to residential structures;
• Multi-family improvements must be on the structure only, no site improvements allowed

HOW MUCH CAN I BORROW?

• Single-family rental unit - up to $25,000 (total cumulative loan to value of home cannot exceed 105%)

• Multi-family rental units - up to $12,000 per unit. (total cumulative loan to value of home cannot exceed 105%);

• Multi-family rental units - maximum shall not exceed $25,000 per unit, and maximum outstanding per borrower shall not exceed $100,000 (total cumulative loan to value of home cannot exceed 100%), with minimum credit score of 660 required.  

The interest rate is 8%. The annual percentage rate ( APR) will be higher depending upon the loan amount, origination fee, etc.

• Up to 20 years to repay the loan
• No annual fees
• No penalty for early payoff
• Underwriting/loan processing fee in the amount of $100 on loans below $7,500 and in the amount of $200 on loans above $7,500 is financed in the loan amount (not out of pocket)
• A 2% origination fee ($100 minimum) is financed in the loan amount (not out of pocket).

I'M INTERESTED, NOW WHAT ?

Decide what improvements you want to make. A contractor must be state licensed.

Get estimates from several contractors. For guidance on your dealings with contractors, see Working with Contractors page.

Now you're ready to talk to a MSHDA-approved Participating Lender or Community Agent about applying for a loan. Click Participating Lender or Community Agent and look for one that covers your county.

You can call them first to discuss your credit and income, and see if they think you are eligible before you fill out the paperwork. At the time you formally apply you will need the following documents:

• Proof of identification
• Contractor's detailed estimate
• Income verification (VOE, most recent one month's pay stubs, Social Security statement, two years of W-2's, etc.)
• Copies of two year's prior tax returns for household members over 18 (unless full-time student) for all landlord loans
• Proof that property taxes are paid to date
• Copy of current homeowner hazard insurance policy showing limits of coverage
• Proof of ownership - properly recorded deeds tracing title to last recorded warranty deed, or title insurance policy
• 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.)
• Proof of SEV or appraisal
• Copy of mortgage statements and current leases on all other rental properties