Here’s what you need to know about Michigan’s new home-buying program.

In February 2022, Michigan Governor Gretchen Whitmer signed into law Public Acts 5 and 6, creating the Michigan first-time homebuyers savings program. Are you wondering what that is? I’m here to help.

First, what is a Michigan first-time homebuyer’s savings account? This program was created to assist first-time homebuyers in the purchase of their new single-family residences here in the state of Michigan.

Accounts created in connection with the program may be used for payment in the purchase of a single-family home in the state of Michigan by a first-time homebuyer. Those payments can be used for things like your down payment or eligible closing costs that have been designated on the settlement statement.

“That tax deduction can be up to $5,000 if you're filing a single return and $10,000 if you're filing a joint return.”

What are the benefits of this? The largest benefit is that contributions made to one of these accounts are actually tax deductible as Michigan income. That tax deduction can be up to $5,000 if you're filing a single return and $10,000 if you're filing a joint return.

How do you go about opening one of these accounts? The really neat thing about this program is that to open an account, all you have to do is go to a financial institution that is licensed to do business here in the state of Michigan and open either a savings, checking, or money-market account. There is nothing that needs to be done at the financial institution to designate that the account is for a first-time homebuyer. Instead, the designation comes when you file your taxes at the end of the year.

Finally, is there a maximum balance that a first-time homebuyer savings account may have? Yes; the maximum balance is $50,000. Once an account has hit $50,000, you can make no additional contributions to that account. However, any interest can continue to accrue above that $50,000 as long as no additional contributions have been made.

This was a lot of information, but I only scratched the surface of everything available with this program. If you would like more information, please feel free to give me a call at (269) 350-5514 or email me at sold@veenstrateam.com. I look forward to speaking with you soon.