7 Steps to Get Ready for Your First Home in Livingston County

Buying your first home can feel like reading a map in a language you don't speak. Credit scores, pre-approvals, debt-to-income ratios. Where do you even begin?!

Here's some good news: it all comes down to seven steps, and you can start the first one today.

This checklist works for any first home in Livingston County. We've built it around what you'll need for Bethel Homes, Livingston County's first community land trust, where applications are open now. And if you read it and think, "I'm not there yet," keep going. Not yet is a plan, not a no.

Step 1: Check Your Income and Eligibility

Start by finding out whether you meet the basics. For the first four Bethel Homes on Burkhart Road in Howell Township, you need to:

• Be at least 18 and a first-time homeowner, meaning no ownership in a principal residence for the past 3 years (HUD exceptions apply).
• Live or work in Livingston County, or be starting a new job with an employer located here.
• Have a combined household income at or below 60% of Area Median Income (AMI). Income from all adults living in the home counts.

Larger households have higher limits, and you can see the full table on the Bethel Homes page. You only income-qualify once, at purchase.

Step 2: Look at Your Credit

Lenders review your credit history to decide whether you qualify for a loan and what interest rate you'll pay. So it pays to know what they will see.

• Get your free credit reports at annualcreditreport.com, the official source, and check them for mistakes.
• Pay every bill on time. Payment history carries a lot of weight.
• Pay down balances where you can, especially on credit cards.
• Ask your lender what they require. Minimum credit scores vary by lender and loan type. For example, Michigan's MI Home Loan program lists a minimum score of 640.

One more Bethel Homes requirement to know about: no adult in the household can have filed for bankruptcy in the last 2.5 years.

Step 3: Take Stock of Your Debt

Bethel Homes asks that your monthly debt payments stay at or below 10% of your gross monthly income. Here's how to check yours in three minutes:

1. List your monthly debt payments: car loans, student loans, and credit cards. Rent, utilities and cell phone bills do not count.
2. Add up the minimum payments.
3. Divide that total by your gross (before-tax) monthly income.

For example, a household earning $5,000 a month before taxes would want debt payments of $500 a month or less.

If you're over 10%, don't panic. Paying off one small loan or card can move the number faster than you'd think!

Step 4: Get Mortgage Pre-Approved

Pre-qualification gives you a rough sense of your budget. A pre-approval letter goes further, and Bethel Homes requires one as part of your application (or that you are working on getting one).

There are two things to know about financing a land trust home:

• You'll need a 30-year fixed-rate mortgage. Some loan programs cannot finance homes on leased land because of their underwriting rules.
• Lender experience matters. Because a community land trust home sits on land the trust owns and leases to you, your lender needs to understand ground leases. The Bethel Homes Homebuyer Guide lists mortgage partners who do, and we strongly encourage you to start there.

If you'd rather use a lender who isn't on the list, share the Homebuyer Guide with them as early as possible. They will also need to review the Ground Lease and Purchase Agreement, and that can take extra time.

Step 5: Build Your Down Payment Fund

Here's some encouraging news: Bethel Homes has no asset limit, so saving will never count against you. We encourage every applicant to put money aside.

A few things to plan for:

• Bethel Homes costs. There is a $35 screening fee and a $200 commitment fee. Down payment assistance will also be available to Bethel Homes buyers, which reduces the net price of the home.
• Your down payment and closing costs. Ask your lender how much you'll need for your loan.
• State help. Michigan's MI Home Loan can be paired with a MI 10K Down Payment Assistance loan of up to $10,000, and it requires a housing education class. Because land trust homes are financed a little differently, ask your lender whether a state program can be used with a Bethel Home.

Even small, steady deposits add up. Try setting up an automatic transfer on payday.

Step 6: Gather Your Paperwork

Bethel Homes reviews applicants first come, first served, so having your documents ready can make a real difference. Pull these together in one folder, paper or digital:

• Two months of recent bank statements
• Two months of income documentation (pay stubs, award letters, child support, Social Security, disability, unemployment, financial aid, or a gift letter)
• Your most recent tax return
• Your mortgage pre-approval letter

Do this now, not on application day.

Step 7: Complete Homebuyer Education

Bethel Homes buyers complete a HUD housing counseling session and provide a homebuyer education certificate. These typically happen after you submit your application, so you don't need to finish them first. But it's worth knowing they're coming, and they're a great chance to ask every question you've been holding onto.

If the Answer Is "Not Yet"

Maybe your credit needs a little more time, or your debt is a bit high, or you don't have your paperwork together. That's okay. If you don't meet every requirement right away, we'll tell you why, so you know exactly what to work on.

Here is how to get program-ready for the next Bethel Homes opportunity:

• Work on your credit health. Check your reports for errors, pay bills on time, and pay down debt.
• Get prequalified for a mortgage. Talk to a local lender or bank to understand your budget.
• Get organized early. Collect your income statements, tax forms and bank statements now.
• Stay connected. Sign up for updates to hear about new homes first, and watch our weekly Housing Mamas videos on Facebook and YouTube for quick, friendly tips on housing topics.

Be the Catalyst

Homeownership shouldn't be out of reach for the people who live and work in Livingston County. Here's how you can help:

• Ready to apply? Start on the Bethel Homes page.
• Know someone who might qualify? Share this checklist with them.
• Want to help more families get there? Donate or volunteer.