HOME FINANCING · MI

Home Financing in Washtenaw County, Michigan: A Plain-Language Guide for Solo Contractors and Small Investors

Buying or investing in a home in Washtenaw County, Michigan means you have real local options — from community credit unions and CDFIs to ITIN-friendly lenders who understand non-traditional income. This guide walks you through what home financing is, who qualifies in this region, what documents you'll likely need, and which local organizations can help. We also highlight Michigan-specific rules and common traps to avoid so you can make a confident, informed decision.

§ 01 — What it is

What Is Home Financing?

Home financing is a loan — usually called a mortgage — that lets you buy a home without paying the full purchase price upfront. You borrow money from a lender, buy the home, and repay the loan over time (typically 15 or 30 years) with interest. The home itself serves as collateral, which means the lender can reclaim it if payments stop. For solo contractors, self-employed individuals, and small real-estate investors, home financing can look a little different than it does for salaried employees. Your income may vary month to month, you may use ITIN (Individual Taxpayer Identification Number) instead of a Social Security Number, or you may own multiple properties. None of these things automatically disqualify you — but they do mean you'll want to work with lenders who understand your situation. Common loan types include: - **Conventional loans** — standard loans not backed by the government, usually requiring good credit and a 3–20% down payment. - **FHA loans** — backed by the Federal Housing Administration, often used by first-time buyers with lower credit scores or smaller down payments. - **USDA loans** — available for rural areas; parts of Washtenaw County may qualify. - **VA loans** — for eligible veterans and active-duty military. - **ITIN loans** — private or community-bank products for borrowers without a Social Security Number. - **Investment property loans** — for buyers purchasing rental or fix-and-flip properties rather than a primary residence.

§ 02 — Who qualifies

Who Qualifies in Washtenaw County?

Washtenaw County's economy is shaped by the University of Michigan, a strong healthcare sector, and a growing number of small businesses and tradespeople. This means lenders here are generally experienced with non-traditional income profiles — including gig workers, freelancers, subcontractors, and independent landlords. **You may qualify if you:** - Have been self-employed or contracting for at least two years (most lenders will average your last two years of net income from tax returns). - Have a credit score of 580 or above for FHA loans, or 620+ for most conventional loans — though some local CDFIs work with lower scores. - Have a debt-to-income (DTI) ratio under 43–50%, meaning your monthly debts (including the new mortgage) don't eat up more than about half your gross income. - Use an ITIN rather than an SSN — several local lenders offer ITIN mortgage products. - Are buying an investment property — local credit unions and community banks sometimes offer portfolio loans that stay in-house and have more flexible underwriting. **Income documentation for contractors:** Most lenders want two years of tax returns (Schedule C for sole proprietors), recent bank statements, and possibly profit-and-loss statements prepared by a CPA. If your reported income is low because of business deductions, talk to a local CDFI or community lender before applying — they may have products suited to bank-statement underwriting. Ann Arbor's median home price has climbed significantly in recent years, but Ypsilanti, Saline, and other parts of the county still offer more affordable entry points for first-time buyers and investors.

§ 03 — What you need

Documents You Will Typically Need

Getting your paperwork together before you apply saves time and reduces stress. Here is a general checklist — your specific lender may ask for more or less: **Identity & Tax Status** - Government-issued photo ID (driver's license, passport, or consular ID) - Social Security Number or ITIN - If applicable: ITIN letter from the IRS or your most recent ITIN-issued tax return **Income & Employment** - Last two years of federal tax returns (personal and business, if separate) - Schedule C, Schedule E, or Schedule K-1 depending on your business structure - Last two to three months of bank statements (all accounts) - Profit-and-loss statement, preferably signed by a CPA - If you have rental income: current lease agreements and two years of Schedule E **Assets** - Bank and investment account statements (last 60–90 days) - Documentation of down payment source (gift letters if funds are from family) **Property** - Purchase agreement (once you have one) - Property address for appraisal and title search **Credit** - The lender will pull your credit report — you don't need to bring it, but reviewing it beforehand at AnnualCreditReport.com is a good idea **Tip:** If you are an ITIN borrower, ask specifically which of these documents the lender will accept as equivalents. Some lenders, especially CDFIs, are practiced at working with ITIN documentation packages.

§ 04 — Where to start in Washtenaw County

Local Lenders, CDFIs, and Organizations That Serve Washtenaw County

These are organizations with a documented presence in Washtenaw County or the broader Southeast Michigan region. Origen Capital is a directory — we are not a lender and do not receive fees from these organizations. Always compare options before committing. **Community CDFIs & Nonprofit Lenders** - **Michigan Saves** — a nonprofit green bank that can finance energy-efficiency improvements alongside a home purchase or refinance. Useful for investors doing renovations. (michigansaves.org) - **Invest Detroit** — a Detroit-based CDFI that funds small real-estate investors and developers in Southeast Michigan, including Washtenaw County. Strong track record with non-traditional borrowers. (investdetroit.com) - **Community Development Association of Michigan (CDAM)** — connects borrowers to CDFI resources and homebuyer programs across the state. **Local Credit Unions** - **University of Michigan Credit Union (UMCU)** — based in Ann Arbor, open to the broader community in many cases. Offers mortgage products, first-time homebuyer programs, and competitive rates. (umcu.org) - **CASE Credit Union** — serves Washtenaw County and surrounding areas; offers home loans including products for members with varied employment. (casecu.org) - **Michigan First Credit Union** — Southeast Michigan footprint, offers FHA and conventional mortgages with in-person support. **ITIN-Friendly Lenders** - **Self-Help Federal Credit Union** — operates in Michigan and has experience with ITIN mortgage products for borrowers without SSNs. (self-helpfcu.org) - **Some community banks and mortgage brokers** in the Ann Arbor / Ypsilanti corridor offer in-house (portfolio) ITIN loans — ask specifically, because not all advertise this. **State & SBA Resources** - **Michigan State Housing Development Authority (MSHDA)** — administers the MI Home Loan program, which provides down-payment assistance of up to $10,000 for qualifying buyers in Michigan, including Washtenaw County. Income and purchase price limits apply. First-time buyers and veterans get priority. (michigan.gov/mshda) - **SBA Michigan District Office (Detroit)** — while not a home-loan office, the SBA can help solo contractors and small investors access SBA 504 loans for mixed-use or commercial-residential properties, and connect you with Small Business Development Centers (SBDCs) for financial coaching. (sba.gov/offices/district/mi/detroit) - **Ann Arbor SPARK** — a local economic development organization that connects small business owners to financial resources, sometimes including bridge financing and referrals to CDFI partners. **Homebuyer Education** - **Washtenaw County Office of Community & Economic Development** — administers local housing programs and can point you to HUD-approved housing counselors in the county. - **HUD-Approved Housing Counseling Agencies** — free or low-cost counseling is available; search at hud.gov/find-a-housing-counselor. Several serve Washtenaw County in English and Spanish.

§ 05 — What to avoid

Michigan-Specific Rules and Programs to Know

Michigan has its own laws and programs that affect home financing. Understanding these can save you money and protect your rights. **MI Home Loan & MI Home Loan Flex (MSHDA)** The Michigan State Housing Development Authority offers two main programs: - **MI Home Loan** — for first-time buyers or anyone who hasn't owned a home in the last three years. Paired with up to $10,000 in down-payment assistance (a second, low-interest loan). - **MI Home Loan Flex** — broader eligibility, available to repeat buyers, with the same down-payment assistance option. Both require working with an approved MSHDA lender and completing a homebuyer education course. **Michigan Principal Residence Exemption (PRE)** If you live in the home you buy, you qualify for the Principal Residence Exemption, which reduces your property tax bill by removing the 18-mill school operating tax from your assessment. This is automatic when you file the right form with your local assessor — but investors buying rental properties do not qualify. **Michigan Transfer Tax** When a property sells, Michigan charges a state transfer tax of $3.75 per $500 of sale price, plus a county transfer tax of $0.55 per $500. As a buyer, you typically don't pay this — it's usually the seller's responsibility — but it affects the seller's net proceeds and can influence negotiations. **Michigan Foreclosure Process** Michigan is a lien-theory state, which means the borrower holds the title while the lender holds a lien. Foreclosure can happen non-judicially (through advertisement) or judicially. The statutory redemption period — the time a borrower has to reclaim a foreclosed property — is typically six months, sometimes more for larger properties. As a buyer or investor, knowing this matters if you're purchasing distressed properties. **Property Tax "Uncapping" at Sale** Michigan caps annual property tax assessment increases at 5% or the rate of inflation (whichever is lower) for existing owners. But when a property is sold, the assessed value is "uncapped" and reset to 50% of current market value. This means your property tax bill after purchase may be significantly higher than what the previous owner paid. Budget for this carefully. **Homestead Property Tax Credit** Low-to-moderate income homeowners in Michigan may qualify for a Homestead Property Tax Credit on their state income tax return. This credit can partially offset property taxes paid during the year.

§ 06 — Ask a question

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