State housing exec focuses on rst-time buyers, rejuvenating neighborhoods

The Michigan State Housing Development Authority is on the front lines of the state’s e orts to add more housing supply, from urban centers like Detroit and Grand Rapids to rural parts of the Upper Peninsula and in the far southwest corner of the state. Increasing homeownership is a key part of those e orts, said Mary Townley, who as director of homeownership heads up MSHDA’s e orts around helping buy homes. The program works with banks and other mortgage lenders and o ers down payment assistance on homes priced up to $224,500.

BY | NICK MANES

 How have MSHDA’s homeownership programs fared during this real estate cycle, starting with the COVID-19 pandemic in the spring of 2020?

When COVID hit back in 2020, the immediate e ects of it were everybody was at a halt for a good three to six months. Realtors couldn’t show homes, lenders were all working from home and couldn’t meet with clients. So it was just kind of a, “Let’s put a pause on things and gure out what everybody can do going forward.”

So after that pause, interest rates were at an all-time low, Realtors started doing virtual showings of properties (and) eligible homeowners were still working with the banks, and everybody started to take the turn. When interest rates started to rise, MSHDA had an advantage because we fund with bonds.

 What does that mean?

So our interest rates are not necessarily tied to the same component like a bank o ering a mortgage product. So our bond rates are typically lower. And MSHDA continued on with growth over the last couple of years. Within the last, probably six months, we’ve had record volume of transactions that we’ve worked with and purchased from our banking partners, or our lending partners.

So we do feel that we still have signi cant skin in the game for new purchasers, and we’re continuing to o er our product line to lenders across the state so that they can support the rst-time homebuyer all the way to the jumbo (loan) homebuyer. And the jumbo, of course, is that really high end.

 Given the price limit you mentioned of $224,500, how is that a ecting MSHDA’s programs during a period of rising prices the last few years?

So we did see a rise in that middle range (where) home values went up signi cantly. The low-to-moderate side did go up, but maybe not as much as the

Rumblings

mid-range.

We have a new fairly new down payment assistance program. Our typical standard DPA is $7,500, but we began o ering a higher DPA in certain ZIP codes across the state ... and that new DPA is $10,000.

 What does that mean?

So a (would-be) homeowner can again use that for closing costs, prepaids and down payment. So that helps o set a little bit of the rise in the sales price. If you look at low-to-moderate income households versus what rents are going for, we believe that most individuals that have a very stable job and the willingness to be a homeowner can purchase and have the same house payment as rent, or if not even lower. So, you know, everybody says (home) “values are too high, my payment’s too high.” But they really need to go to a lender and check that out and see if what they’re looking for falls below a rent payment.

 How would you say MSHDA’s homeownership programs are holding up in this current market where prices remain even as demand is somewhat muted?

We have a sales sta that are on the road ve days a week and they go out and meet with lenders and Realtors and promote the program and participate in community events. And we’ve gotten very positive feedback from our lenders. Basically saying, “We promote your program, we get rst-time homebuyers in.” And because of that, they’ve referred us to other individuals that were in their circle of friends to do this same kind of thing. So I think that we have a major piece in this a ordable housing realm in the state of Michigan. We’re just going to continue to do it and do more marketing to our partners and also the general public.

 Given the current market, as well as a large-scale push by the private and public sector to bring more housing to the market, how do you see MSHDA’s homeownership programs being a part of that?

So years ago, we provided the funds for certain cities across the state to address blighted properties. So a lot of those that were severely abused and no longer livable, we provided funds for those to be demolished. There was a another group of houses that were not blighted, but they also weren’t attracting new homebuyers for that home or even that community. So we are partnering with communities that have available funding to rehab those homes, and then we come in and work with that community, that city, and o er a MSHDA program to a potential buyer. So we’re focusing heavily on communities that are trying to rejuvenate neighborhoods ... get them back up and running to attract young families. And I think that is one of our key programs that we’re going to be focusing on in the next probably 12-24 months. We have a housing stock, it may not be in the best shape in some areas, but we do have a sound housing stock that we can build o of.

 Given all of this, what would you say is most keeping you up at night these days?

You know, we need to do a really good job at listening to our partners. What works with our program and what doesn’t work with our program? And then work at meaningful change so that we can put more individuals in homeownership. I’m always looking for e ciency, streamlining processes, what makes sense for that rst-time homebuyer?