The Ann Arbor First-Time Home Buyer Guide
Michigan-specific answers on property taxes, down payment help, and closing costs. A practical guide for first-time buyers in Ann Arbor and surrounding areas.
National advice only tells part of the story.
Buying your first home in Michigan brings questions that a general checklist may miss. Property-tax uncapping can change your monthly budget after a sale, while down-payment assistance may change the cash you need up front. Here is a clearer place to start.
What you'll learn
Property-tax uncapping
Why the seller's current bill may not reflect what you pay after buying the home.
Down-payment assistance
Questions to ask a participating lender about Michigan programs.
Your closing roadmap
A practical path from pre-approval to the paperwork after closing.
Budget for the tax bill after the sale.
A property's tax bill is based on taxable value multiplied by the local millage rate. Under Proposal A, taxable value can generally rise only by the lesser of 5% or inflation each year. When a home sells, the cap is lifted and the taxable value resets based on the home's SEV in the year after the sale.
The previous owner's lower tax bill does not simply transfer to the buyer. Plan for the post-purchase tax estimate when building your budget.
What a $400,000 purchase might look like
Approximate SEV / new taxable value: about $200,000
Illustrative millage: 40 mills (0.040)
Estimated annual tax: about $8,000
about $667 per month
Millage rates vary by address. Confirm the local tax estimate before making decisions.
Two things to do after closing
1. File the Property Transfer Affidavit
Submit Form L-4260 to the local assessor within 45 days of the transfer.
2. Apply for your Principal Residence Exemption
If this is your primary residence, ask about Form 2368 and the current filing deadline.
Confirm current filing rules with your local assessor.
Explore Michigan down-payment assistance.
Ask a participating lender about MSHDA MI Home Loan and MI $10K DPA. Programs can help with down payment and closing costs, subject to current eligibility rules.
The assistance is typically a 0% second mortgage with no monthly payment, repaid when the home is sold, refinanced, or paid off.
Requirements can include income limits, credit requirements, purchase-price limits, a minimum contribution, homebuyer education, and liquid-asset limits. Ann Arbor homes can run above MSHDA price limits, so ask early whether the homes you are considering qualify.
Also ask about MI Home Loan Flex, Mortgage Credit Certificates, and local, bank, or employer programs. Program rules, limits, and deadlines change, so confirm current terms.
Your first-time buyer roadmap
Budget for more than the down payment.
- Closing costs, typically around 2–5% of the purchase price
- Earnest money deposit
- Inspection and appraisal fees
- Prepaid taxes, insurance, and escrow reserves
- Moving costs and immediate repairs
Michigan transfer taxes are customarily paid by the seller, but who pays what is negotiable and should be stated in the contract.
Questions to ask
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Ready to talk through your options?
Lana helps first-time buyers in Ann Arbor and the surrounding area understand their real budget and find the right home.
734-433-8502 · lana.smith@kw.com