First-time homebuyers in Michigan have a new tool to help realize the dream of homeownership!
Michiganders can now save for the first purchase of a home through a new dedicated savings vehicle! The Michigan First-Time Homebuyer Savings Account (“FHSA”) Program allows account holders to deduct most, if not all, of their contributions to a FHSA from their state income tax and enjoy tax-free gains on their savings.
The opportunity is open to any Michigan resident who has not individually or jointly owned or purchased a single-family residence in the past 3-years.
FHSAs can be opened for yourself, or parents, grandparents, and guardians can designate the account for a qualified beneficiary, like a child or grandchild, to take advantage of in the future!
Account holders can deduct FHSA contributions from their Michigan Income Tax for as long as 20 years. Annual contribution thresholds are up to $5,000 for a single tax return and $10,000 for a joint filing. After the $50,000 maximum account balance is reached, interest can continue to grow tax-free.
Eligible homebuying costs that FHSA funds can cover include the down payment and allowable closing costs shown on a settlement statement or an executed sales agreement for the purchase of a new home in Michigan.
Your new account can be started today at your neighborhood bank or credit union, or even through a financial advisor.