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HB 5032

AN ACT RELATING TO ALCOHOLIC BEVERAGES -- RETAIL LICENSES

2025 Regular Session Introduced by Alex Finkelman

MSHDA loan caps revert to a market-based limit of 90% of local average area purchase price and increase extra financing for disability improvements from 3,500 to 10,000.

06/13/2025 Signed by Governor
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Bill Summary · HB 5032

Summary — HB 5032 (Public Act 193 of 2024)

Status: Enacted (PA 193 of 2024). Approved by Governor Jan 16, 2025; filed with Secretary of State Jan 16, 2025. Effective date: April 2, 2025. (Amends Mich. Comp. Laws §125.1444)

Purpose / Intent

Amend the State Housing Development Authority Act to modernize MSHDA’s (Michigan State Housing Development Authority) homeownership loan price limits so they track local market averages and to increase the cap on additional financing for unanticipated costs related to disability accommodations. The change is intended to allow MSHDA to serve more buyers in higher-cost areas and to finance larger, necessary accessibility improvements.

Key provisions

  • Replaces fixed dollar sales-price/appraised-value caps for MSHDA loans on 1–4 unit residential properties with a market-based limit:
    • Instead of fixed amounts ($224,500 for 1–2 units; $261,625 for 3-unit; $299,000 for 4-unit — former law), the purchase price or appraised value (for refinancing) may not exceed 90% of the "average area purchase price" applicable to the housing unit.
    • “Average area purchase price” must be determined in accordance with section 143(e) of the Internal Revenue Code (the average purchase price of single‑family residences in the relevant statistical area based on the most recent 12‑month period for which sufficient data exist at the time of loan commitment or purchase).
  • Increases the cap on allowable increases to the purchase-price limit to cover unexpected cost increases during construction or for improvements to adapt property for use by disabled individuals from $3,500 → $10,000.
  • Leaves other MSHDA lending program requirements intact.

Who is affected

  • Michigan State Housing Development Authority (MSHDA): implements new pricing methodology and can underwrite larger loans in higher‑cost areas.
  • Prospective homebuyers using MSHDA programs (including first‑time/homebuyers and purchasers of 1–4 unit properties): may qualify for larger loans in higher‑priced markets.
  • Individuals needing disability accommodations: greater ability to finance adaptation costs up to $10,000.
  • Mortgage lenders and participating developers: potential changes in program eligibility and loan sizes.
  • No direct impact on Michigan General Fund; MSHDA is funded by its restricted revenue sources.

Fiscal and operational impacts

  • Fiscal impact: indeterminate but likely positive for MSHDA (could increase number/size of loans and MSHDA revenue). No fiscal impact on state General Fund or local governments.
  • Operational: requires MSHDA to adopt procedures to calculate/apply the IRC 143(e) average area purchase price data.

Timeline / legislative actions (selected)

  • Introduced: Sept 20, 2023.
  • Passed House: June 12, 2024.
  • Passed Senate: Dec 19, 2024.
  • Enrolled/Presented to Governor: Dec 23, 2024 / Jan 8, 2025.
  • Approved by Governor / Filed: Jan 16, 2025.
  • Effective: April 2, 2025.

Practical effect

Shifts MSHDA from stale, statewide fixed dollar caps to a market‑responsive cap tied to local average purchase prices (90% of the average), and substantially raises the maximum extra financing available for disability‑related construction or improvements. The change is designed to make MSHDA homeownership programs more usable in higher‑cost areas and to better support accessibility upgrades.

Compiled from official sources — confirm details with the bill’s official record.

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