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The First-time Home Buyers Savings Program provides tax incentives to help more people become homeowners.

Two bills recently signed into law are designed to put homeownership within reach for many folks, especially young people. This first-time home buyer program lowers costs by allowing tax-exempt contributions to first-time home buyer savings accounts.

How the new law benefits savers

The Michigan First-Time Home Buyer Savings Program allows future homebuyers to open savings accounts designated for the purchase of a single-family residence. The contributions they make, accrued interest and qualified withdrawals are all exempt from taxation. Single filers could claim up to $5,000 and joint filers could claim up to $10,000 on their taxes.

Limited-time program

Unless the state legislature amends or extends the law in the future, the First-Time Home Buyers Savings Program is only available for five years: tax years 2022 through 2026.

Only applies to Michigan taxes

The tax deduction provided by the new program only applies to state income tax. It does not affect savers’ federal taxes.

Accounts can be set up for beneficiaries

The accounts are not limited to home buyers. Relatives can help first-time home buyers by setting up a First-Time Home Buyer’s Savings account and designating the future home buyers as beneficiaries. The tax savings go to the account holder(s).

Program details still in development

While the new program was signed into law in February, the State legislature hasn’t provided direction on how the savings accounts will be administered. We’ll share updates when the details are available.

When you’re ready to buy a home

At Consumers, our mortgage loan officers are here to help whenever you buy a house—especially if you’re a first-time home buyer. Our team can answer all your questions about home mortgages, including how the process works and how much you should save for a down payment.

Consumers helps more than 2,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit; contact us online or call us at 800-991-2221.

Consumers home loans

We’d love to help you with a mortgage or home equity line of credit.

Learn more.