Rep. Farrington bill offers mortgage refinance option for low-income families

Program could help homeowners avoid foreclosure

State Rep. Diana Farrington’s legislation allowing the Michigan State Housing Development Authority to create a mortgage refinance program was approved today by the House Financial Services Committee.

Farrington, of Utica, said the Legislature temporarily authorized MSHDA to offer mortgage refinancing in 2008, but that authority ended in 2011. MSHDA now wants to develop a new refinancing program using private funding sources to help low- and moderate-income families.

“Programs like this are important in keeping families in stable, affordable housing, and if MSHDA can offer refinancing without using public tax dollars I don’t see why we should stand in the way,” Farrington said. “Refinancing often gives homeowners a lower interest rate, saving them money. For low-income families this savings might be the difference that prevents foreclosure or keeps them from falling into a need for state-funded assistance.”

Farrington noted that MSHDA does not use state tax dollars to finance loans or operating expenses, and the state is not obligated to pay for any shortfalls in MSHDA debt.

House Bill 4580 now moves to the full House for consideration.