Balloon mortgage risks: what to know before you sign

Written by Samantha SheltonNMLS 1647301Updated October 2026

The main risk of a balloon mortgage is easy to state: the remaining balance comes due on the date in your note, whether or not the sale or refinance you planned has happened yet. The Consumer Financial Protection Bureau warns that a borrower unable to make the balloon payment could lose the home, and that a refinance may not be available if the property’s value falls or the borrower’s finances decline. This guide sets out, calmly, what to know before you sign.

The structure does have real benefits for the right plan: a lower payment during the term, a loan matched to a short holding period and a bridge to a sale or a refinance. The mechanics of the payment are explained in our guide to balloon payments. Other loan structures are mapped in our Loan Types & Programs guide.

Key takeaways:

• The date does not move: The balloon is due on the date in the note. An extension is a contract term you need in writing, and in Michigan a promise by a bank, credit union or licensed mortgage company to extend a loan cannot be enforced unless it is written and signed, under MCL 566.132(2).
• Most of the loan is still owed at the end: Five years of payments on a 30-year schedule retire about 6% of the loan, so on a loan that starts at 80% of the price, a 10% fall in the home’s value pushes the loan-to-value ratio above 80% by the due date.
• Protection depends on who lends: Qualified Mortgage limits, the high-cost loan ban and the Loan Estimate apply to consumer credit from a creditor. Business-purpose loans fall outside Regulation Z, and a private seller who finances five or fewer homes a year is generally not a creditor under it.

What is the core risk of a balloon mortgage?

Timing. A balloon loan is designed to be paid off by an event, usually a sale or a refinance, and that event has to happen by a fixed date. If it does not, the balance is still due. The balloon payment itself is a known number, printed on the Loan Estimate before you sign; the risk is the gap between that fixed date and the things that must go right to meet it.

Three things have to line up on that date, and you control only part of each:

• You qualify again: A refinance is a new loan. Under 12 CFR 1026.43(c)(1), the new lender must make its own good-faith determination that you can repay, using your credit, income and debts as they stand then.
• The home supports the loan: A refinance is sized against the appraised value on the day you apply, and a sale has to clear the balance plus selling costs.
• A lender wants the loan: Rates, guidelines and a lender’s appetite can change over the term.

The CFPB’s guide to the Loan Estimate describes a balloon payment as a feature that “is risky” and suggests asking the lender about other options when a loan includes one.

What can change between signing and the balloon date?

Five things, and none of them is fixed when you sign.

Interest rates

According to Freddie Mac’s Primary Mortgage Market Survey weekly history, the average 30-year fixed rate was 3.09% in the week of October 21, 2021 and 7.32% in the week of October 22, 2026, so a five-year balloon signed in the first week came due in the second. Since the start of 2021, the same survey reported a low of 2.65% on January 7, 2021 and a high of 7.79% on October 26, 2023. These are national averages, not the rate on any loan. Our guides to how the Federal Reserve affects mortgage rates and refinancing in a rising-rate environment cover what drives those moves.

Credit

The refinance lender pulls your credit again. A late payment, a new account or a collection during the term can change the programs and pricing open to you, even if the balloon loan itself was always paid on time. Our guides to credit and qualifying and how credit affects a mortgage explain what lenders look at.

Income or job

The new lender considers and verifies income and debts under 12 CFR 1026.43(c)(2) through (c)(4). A job change, a reduction in hours or a move to self-employment between signing and the due date changes what you can document. Our guides to the debt-to-income ratio and refinancing eligibility show how a lender measures it.

The home’s value and the appraisal

Michigan has seen a full cycle of this. In the Federal Housing Finance Agency’s purchase-only house price index by state, Michigan’s seasonally adjusted index peaked at 199.88 in the third quarter of 2005 and fell to 136.38 by the second quarter of 2011, about 32% lower. The index stood at 195.24 in the second quarter of 2006, so a five-year balloon written then would have met an appraisal near the 2011 level, about 30% lower. A statewide index is not a forecast for any one house; your appraisal sets the number, as our guide to the home appraisal process explains.

A lender’s appetite for the loan

The lenders who make balloon loans can change too. A small creditor’s eligibility to make a balloon-payment Qualified Mortgage is tested on the prior year’s lending and assets, under 12 CFR 1026.35(b)(2)(iii), so a lender can qualify one year and not the next. Portfolio lenders set their own guidelines and can change or stop a product. And Fannie Mae will not buy a short note at all: its Selling Guide B2-1.5-02 sets a minimum original term of 85 months, one month longer than a seven-year note.

A stress test: what if the value drops 10%?

Hypothetical example, not an offer. Take a $250,000 loan at an illustrative 7% on a 30-year schedule, with a five-year balloon, on a home bought for $312,500, an 80% loan-to-value ratio at the start. After 60 payments, about $235,300 is still owed.¹ The table shows what the refinance needs at four possible values on the due date.

Source: Align Lending’s arithmetic on the hypothetical loan above, rounded to the nearest $100; loan-to-value is the year-5 balance divided by the value.

Why 80% matters: under Fannie Mae’s Selling Guide B7-1-01, a conventional first mortgage with a loan-to-value ratio above 80% needs primary mortgage insurance or another approved credit enhancement. So a 10% drop leaves three routes: bring about $10,300, accept mortgage insurance, or use a program that allows a higher loan-to-value ratio. At a 30% drop the balance is above the value, which takes cash, a lender willing to refinance with negative equity, or a sale that covers the shortfall. If an appraisal comes in short, see refinancing with a low appraisal.

How do payment shock and slow equity show up on a balloon loan?

In two ways: equity builds slowly during the term, and the payment can rise when the balloon is replaced.

Slow equity. On a payment set over 30 years, early payments are mostly interest. On the $250,000 example, the first 60 payments retire about $14,700 of principal, about 5.9% of the loan, and an interest-only balloon retires none. The Loan Estimate shows this before you sign: its Comparisons table lists the “Principal you will have paid off” in 5 years, under 12 CFR 1026.37(l)(1)(ii). Compare that figure with the balloon amount on page 1. Our guide to mortgage amortization explains why the split moves slowly.

Payment shock at the refinance. Hypothetical example, not an offer. The table shows the new monthly principal and interest when the five-year balloon above is replaced, at three illustrative rates.

Source: Align Lending’s arithmetic, standard monthly amortization, principal and interest only, rounded to the nearest dollar.

Replacement loans pay themselves off: FHA requires complete amortization under 24 CFR 203.17(c)(2), and Fannie Mae requires a fully amortizing loan under B2-1.5-02. So if the balloon was interest-only, or if the new loan’s term is shorter than the time left on the balloon’s amortization schedule, the new payment will be higher at the same rate. Our guides to interest-only mortgage risks and refinancing to a shorter term cover both cases.

Which prepayment and extension terms should you read before signing?

Two parts of the note decide how much room you have: whether you can pay early without a charge, and whether you have any written right to more time.

Prepayment penalties. Federal rules limit them on most consumer home loans. Under 12 CFR 1026.43(g), a covered loan may include a prepayment penalty only if its annual percentage rate cannot increase after closing, it is a Qualified Mortgage (the small-creditor balloon QM counts) and it is not a higher-priced mortgage loan. Even then, the penalty ends after three years and is capped at 2% of the amount prepaid in the first two years and 1% in the third, and the lender must also offer you a comparable loan without one. A balloon loan that is not a Qualified Mortgage cannot carry a penalty under that rule, and a high-cost mortgage cannot carry one at all, under 12 CFR 1026.32(d)(6). A business-purpose loan, or a land contract from a seller who is not a creditor, sits outside these limits, so the contract itself is the only rulebook.

The Loan Estimate answers the question in its Loan Terms table: the Prepayment Penalty row must say yes or no and, if yes, give the maximum penalty and when the penalty period ends, under 12 CFR 1026.37(b)(4) and (b)(7)(i). If a prepayment penalty is added after you receive the Closing Disclosure, the lender must give you a corrected one and a new three-business-day wait, under 12 CFR 1026.19(f)(2)(ii)(C).

Extension and reset terms. Some notes include a written option to extend or reset at maturity if stated conditions are met, such as an on-time payment history. If yours has none, any extension is the lender’s decision on the day you ask. Michigan law adds a reason to get it on paper: under MCL 566.132(2), you cannot sue a financial institution to enforce a promise to lend, or to renew, extend or modify a loan, unless the promise is in writing and signed by the institution. The statute’s definition covers banks, savings banks, credit unions and companies licensed under Michigan’s mortgage brokers, lenders and servicers licensing act. A verbal “we always roll these over” is not an extension.

What happens in Michigan if a balloon goes unpaid?

It depends on whether the balloon sits on a mortgage or a land contract, and the two processes work differently.²

On a mortgage. A balloon not paid on its due date is a default under the loan’s terms. Under MCL 600.3201, a Michigan mortgage that contains a power of sale may be foreclosed by advertisement after a default, without a court case. MCL 600.3208 requires the sale notice to run in a county newspaper for 4 successive weeks, at least once each week, and a copy to be posted on the property within 15 days of the first publication. A redemption period follows the sheriff’s sale, covered in the FAQ below, and our guide to the foreclosure process walks through the steps.

On a land contract. Forfeiture is a separate process with its own clock:

• The contract must allow it: A seller may recover possession after forfeiture only if the contract expressly provides for forfeiture or gives the seller the right to declare one, under MCL 600.5726.
• A written notice comes first: The buyer must be served a notice of forfeiture and then has 15 days, or a longer period if the parties agreed to one in writing, to pay what is owed and cure other material breaches, under MCL 600.5728.
• The balloon counts in full: MCL 600.5726 keeps debt accelerated because of a breach out of the money a buyer must pay in a forfeiture case. A balloon that falls due on the contract’s own maturity date is a payment the contract requires, not debt accelerated by a breach.
• Redemption after judgment: After a judgment for possession, the court may not issue the order to remove the buyer for 90 days if less than 50% of the purchase price has been paid, or for 6 months if 50% or more has been paid, under MCL 600.5744(4).
• Foreclosure is the other route: According to Michigan Legal Help, forfeiture in district court is the more common remedy, while a seller who forecloses must go through circuit court, with a six-month redemption period after the sheriff’s sale.

The checklist of what a land contract buyer should confirm before the balloon date lives in our explainer on balloon payments, and the pros and cons of seller financing covers the structure. If a balloon date is close and the money is not lined up, a HUD-approved housing counseling agency (800-569-4287) can review the options with you before a payment is missed.

Which federal rules limit balloon mortgages?

Several, and knowing which one applies to your loan tells you what protection you have.

• The general Qualified Mortgage excludes balloons: Its payments may not result in a balloon payment, under 12 CFR 1026.43(e)(2)(i)(C), with one exception in paragraph (f).
• The exception is narrow: A balloon-payment Qualified Mortgage under 12 CFR 1026.43(f) must have substantially equal payments on an amortization period of no more than 30 years, a rate that does not increase and a term of five years or longer. The lender must find that you can make every scheduled payment except the balloon from income or assets other than the home, and it must be a small creditor: in the prior year it made at least one first-lien loan on property in a rural or underserved area, it and its affiliates sold no more than 2,000 first-lien loans, and its assets were under a threshold the CFPB set at $2.785 billion for 2026, according to its January 7, 2026 adjustment. The loan loses that status if sold within three years, with limited exceptions, under 12 CFR 1026.43(f)(2).
• The temporary version has ended: A wider balloon QM for small creditors outside rural areas, in 12 CFR 1026.43(e)(6), applied only to applications received before April 1, 2016.
• High-cost loans generally cannot have one: Under 12 CFR 1026.32(d)(1), a high-cost mortgage may not schedule a payment more than two times a regular periodic payment, except for a schedule adjusted to seasonal or irregular income, a bridge loan of 12 months or less tied to buying or building a principal dwelling, or a loan that meets the balloon QM conditions.
• Non-QM balloons are still underwritten: Every covered loan needs the lender’s good-faith ability-to-repay determination under 12 CFR 1026.43(c)(1). For a balloon loan, the lender tests the largest payment scheduled in the first five years, or the largest payment including the balloon if the loan is higher-priced, under 12 CFR 1026.43(c)(5)(ii)(A).
• Agency and government loans require full amortization: The Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to stop buying, from January 10, 2014, loans subject to the ability-to-repay rule that are not fully amortizing, per its May 6, 2013 announcement. FHA requires complete amortization over a term of no more than 30 years under 24 CFR 203.17(c)(2) and (d), and VA caps a final installment at two times the average of the preceding ones under 38 CFR 36.4310(a), with exceptions such as construction loans. Our guides to conventional, FHA and VA loans cover those programs.
• Some balloons sit outside Regulation Z: Credit extended primarily for a business, commercial or agricultural purpose is exempt under 12 CFR 1026.3(a), and a person generally counts as a creditor for home-secured loans only after extending that credit more than 5 times in the preceding calendar year, under 12 CFR 1026.2(a)(17)(v). On those loans, the ability-to-repay rule, the Qualified Mortgage limits and the Loan Estimate may not apply.

The statute behind all of this, the Truth in Lending Act at 15 U.S.C. 1639c(b)(2)(A)(ii), defines a balloon payment for Qualified Mortgage purposes as a scheduled payment more than twice as large as the average of earlier scheduled payments. Our overview of non-conforming loans and our guide to jumbo and non-QM lending show where loans outside these programs sit.

Where the small-creditor exception reaches in Michigan

The CFPB publishes the rural or underserved county list each year. Its list for use in 2026 names 1,617 counties and county equivalents, 42 of them in Michigan, among them Marquette, Houghton and Chippewa in the Upper Peninsula, Huron, Sanilac and Tuscola in the Thumb, and Van Buren in the southwest. Oakland, Wayne, Macomb and Livingston counties are not on it.

Under 12 CFR 1026.35(b)(2)(iv), an area is rural if it is a county outside metropolitan areas and outside micropolitan areas next to one, judged by the USDA Economic Research Service’s Urban Influence Codes, or a census block outside an urban area as the Census Bureau defines it. Per the Census Bureau’s 2020 criteria, an urban area must encompass at least 2,000 housing units or have a population of at least 5,000. An area is underserved if, according to the prior year’s HMDA data, no more than two creditors made five or more first-lien covered loans in the county. Because the census-block test reaches inside metro counties, the CFPB’s list page says its Rural or Underserved Areas Tool is more comprehensive than the lists, so a property outside the 42 counties can still qualify. The exception also moves one pricing line: under 12 CFR 1026.43(b)(4), a first-lien loan is higher-priced at 1.5 or more percentage points over the average prime offer rate, but a balloon QM under paragraph (f) reaches that label only at 3.5 or more points.

What are the red flags in a balloon mortgage offer?

None of these proves an offer is bad, but each one is a reason to slow down and ask more questions.

• A very short term on a home you plan to live in: The balloon QM requires a term of five years or longer. A one-year or two-year balloon on a long-term home, with no bridge sale lined up, leaves little time for anything to go right.
• Interest-only payments plus a balloon: The balloon then equals the full amount borrowed. The general Qualified Mortgage does not allow payments that defer principal, under 12 CFR 1026.43(e)(2)(i)(B), and the Loan Estimate must show an “Interest Only” feature in the product line.
• A balloon on a high-cost loan: Federal rules generally ban it. If a loan is labeled high-cost and still carries a balloon, ask which exception the lender is relying on.
• No written extension or refinance terms: A promise to “work something out” at maturity is not a term of the loan, and Michigan’s statute of frauds requires a lender’s promise to extend to be written and signed.
• Pressure to sign quickly: You are entitled to receive the Closing Disclosure at least three business days before closing, and a change in the loan product restarts that wait under 12 CFR 1026.19(f)(2)(ii)(B). Take the time to have someone review the terms.
• An exit that rests on hope: A plan that depends on rates falling or values rising has no backup if neither happens.
• A prepayment penalty where the rules do not allow one: A non-QM covered loan or a higher-priced loan cannot carry one under 12 CFR 1026.43(g).
• A lender or originator you cannot verify: Mortgage companies and loan originators are listed on NMLS Consumer Access, and Michigan’s Department of Insurance and Financial Services, which regulates mortgage licensees among other financial companies, offers a license search.

What should you ask before signing a balloon note?

Ask these of the lender, or of the seller on a land contract, and get the answers in writing:

• What is the exact balloon amount and due date, and where do they appear on the Loan Estimate?
• Is the rate fixed until the due date? If not, when and how can it change?
• Is there a prepayment penalty? What is the maximum, and when does it end?
• Is there a written option to extend, reset or refinance at maturity, and what conditions must I meet?
• Will you keep this loan or sell it, and who will service it?
• Is this a Qualified Mortgage? If not, how did you determine that I can repay it?
• What happens if a payment is late, and what happens if the balloon is late?
• How much principal will I have paid off in 5 years, as shown in the Comparisons table on the Loan Estimate?
• Can I see a fully amortizing alternative on its own Loan Estimate?
• On a land contract: does the contract allow forfeiture, will it be recorded and does the seller have a mortgage on the property?

Our Loan Estimate check shows two offers side by side, and the CFPB’s guide to the Closing Disclosure lists each line to check before closing.

FAQ: Balloon mortgage risks

These short answers cover the questions borrowers ask about balloon risk.

What does a lender do if a balloon payment goes unpaid?

It treats the unpaid balloon as a default under the loan. On a Michigan mortgage with a power of sale, the lender may foreclose by advertisement under MCL 600.3201, without a court case. On a land contract, the seller usually starts forfeiture with a written notice under MCL 600.5728. Before the due date, the options are a refinance, a sale or a written extension, and a HUD-approved housing counselor can review them with you, often at little or no cost according to the CFPB.

Is a lender required to extend a balloon mortgage?

Only if your note or a written agreement gives you that right. Without one, an extension is the lender’s decision. In Michigan, MCL 566.132(2) bars a lawsuit to enforce a bank’s, credit union’s or licensed mortgage company’s promise to renew or extend a loan unless the promise is in writing and signed by the institution, so get any extension terms on paper before you rely on them.

Can a balloon mortgage carry a prepayment penalty?

Only in limited cases on a consumer home loan. Under 12 CFR 1026.43(g), a penalty is allowed only on a fixed-rate Qualified Mortgage that is not higher-priced, including the small-creditor balloon QM, and it must end after three years. A non-QM balloon loan cannot carry one. Business-purpose loans and some seller-financed contracts fall outside these limits.

Does a non-QM balloon loan mean the lender skipped underwriting?

No. Every consumer loan secured by a dwelling needs the lender’s good-faith determination that you can repay it, under 12 CFR 1026.43(c)(1). For a balloon loan, the lender tests the largest payment in the first five years, or the payment schedule including the balloon if the loan is higher-priced. Non-QM status mainly means the lender does not get the legal presumption of compliance that a Qualified Mortgage carries.

Do balloon loans on rental property get the same federal protections?

Often not. Credit extended primarily for a business or commercial purpose is exempt from Regulation Z under 12 CFR 1026.3(a), so the ability-to-repay rule, the Qualified Mortgage limits, the prepayment penalty limits and the Loan Estimate may not apply. The note and your own review are the main protection on those loans. Our guide to buying a home as an investment property covers how rental financing differs.

How long is the redemption period after a Michigan foreclosure sale?

For a mortgage on a home of up to 4 units signed on or after January 1, 1965, the redemption period after the sheriff’s sale is 6 months when the amount claimed due at the foreclosure notice is more than 66-2/3% of the original loan, under MCL 600.3240(8), and 1 month if the property is found abandoned under subsection (9). In this guide’s $250,000 example, about 94% of the original loan is still owed at year 5, well above that line.

Who can review a balloon note before I sign it?

According to the CFPB, a HUD-approved housing counseling agency can give independent advice on loan terms, often at little or no cost; call 800-569-4287 or use the CFPB’s housing counselor search. For a land contract or any legal question, a Michigan real estate attorney is the right reviewer, and the State Bar of Michigan’s Lawyer Referral Service takes requests at (800) 968-0738; per the State Bar, the caller pays a $25 fee for a consultation of up to 25 minutes.

Can a balloon mortgage be interest-only?

Yes, and that combination leaves the full amount borrowed due at the end, because no principal is paid during the term. The general Qualified Mortgage does not allow payments that defer principal, so an interest-only balloon is a non-QM loan, and the Loan Estimate must show both an “Interest Only” and a “Balloon Payment” feature. Our guide to interest-only mortgage risks covers the payment change when principal payments begin.

The bottom line on balloon mortgage risks

A balloon mortgage’s risk is concentrated in one date. The balance is due then whether or not the sale or refinance has happened, and a lot can change before it: rates moved from 3.09% to 7.32% in Freddie Mac’s survey over the five years to October 2026, and Michigan’s house price index fell about 30% over the five years to 2011. In the stress test, a 10% fall in value turned a 75.3% loan-to-value into 83.7% and called for about $10,300 to refinance at 80%. Federal rules keep balloons off most consumer loans, and Michigan law sets the steps for foreclosure, forfeiture and redemption, but business-purpose loans and some seller financing sit outside much of that protection.

None of this rules a balloon out. It means reading the note, getting extension terms in writing, stress-testing the exit and comparing the balloon with a loan that pays itself off. If you would like a second look at a balloon offer, talk with Samantha at Align Lending, an independent Michigan mortgage broker.³ Call 248-506-5727 or start online.

Footnotes:

1. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. The 7%, 8% and 9% rates are used solely to make the arithmetic concrete and are not market rates, offers or predictions. Balances, payments and loan-to-value ratios are Align Lending calculations on a $250,000 loan using standard monthly amortization, with no extra principal, and they leave out taxes, insurance, mortgage insurance and fees. Your figures depend on your loan and will be disclosed on your Loan Estimate and Closing Disclosure. Return to text.

2. This section describes Michigan statutes in general terms and is not legal advice. Foreclosure, forfeiture and redemption depend on the language of your mortgage or contract and on facts a court would weigh, and statutes and case law change. Consult a licensed Michigan real estate attorney about your situation. Return to text.

3. Align Lending is an independent mortgage broker and does not set loan program terms. Availability, pricing, qualifying guidelines and balloon terms are set by individual lenders and note holders, vary by lender and change without notice. Lenders in Align’s network may not offer every structure described here. Return to text.

Figures current as of October 2026; verify current rules and data with the linked source before relying on them.

Sources: balloon payment described as a large, one-time payment at the end of the loan term, with the warnings that a borrower unable to make it could lose the home and that a refinance may not be possible if the property’s value falls or the borrower’s finances decline, Consumer Financial Protection Bureau, “What is a balloon payment? When is one allowed?” (last reviewed August 28, 2026); balloon payment and prepayment penalty described as risky features, CFPB Loan Estimate and Closing Disclosure explainers. Ability-to-repay determination, income and debt verification and the balloon payment test, 12 CFR 1026.43(c)(1), (c)(2), (c)(4) and (c)(5)(ii)(A). General qualified mortgage payments that may not defer principal or result in a balloon payment, 12 CFR 1026.43(e)(2)(i)(B) and (C). Balloon-payment qualified mortgage terms, repayment finding excluding the balloon, small-creditor conditions and loss of status on transfer within three years, 12 CFR 1026.43(f)(1) and (f)(2) and 12 CFR 1026.35(b)(2)(iii); temporary balloon-payment qualified mortgage limited to applications received before April 1, 2016, 12 CFR 1026.43(e)(6)(ii); asset threshold of $2.785 billion for 2026, CFPB, Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold, effective January 7, 2026. Higher-priced covered transaction thresholds of 1.5 and 3.5 percentage points, 12 CFR 1026.43(b)(4). High-cost mortgage balloon prohibition and its exceptions, 12 CFR 1026.32(d)(1); high-cost prepayment penalty ban, 12 CFR 1026.32(d)(6). Prepayment penalty conditions, limits and the alternative offer, 12 CFR 1026.43(g)(1) through (3). Loan Estimate Prepayment Penalty disclosure, 12 CFR 1026.37(b)(4) and (b)(7)(i); “Principal you will have paid off” in 5 years, 12 CFR 1026.37(l)(1)(ii); Closing Disclosure waiting period restarted by a product change or an added prepayment penalty, 12 CFR 1026.19(f)(2)(ii)(B) and (C). Business-purpose exemption, 12 CFR 1026.3(a); creditor defined by more than 5 dwelling-secured extensions in the preceding calendar year, 12 CFR 1026.2(a)(17)(v). Balloon payment defined as a scheduled payment more than twice the average of earlier scheduled payments, 15 U.S.C. 1639c(b)(2)(A)(ii). Rural and underserved definitions, 12 CFR 1026.35(b)(2)(iv); CFPB rural or underserved counties list for 2026; USDA Economic Research Service Urban Influence Codes; Census Bureau 2020 urban area criteria. Fannie Mae and Freddie Mac purchases limited to fully amortizing loans from January 10, 2014, Federal Housing Finance Agency, May 6, 2013. Fully amortizing requirement and 85-month minimum original term, Fannie Mae Selling Guide B2-1.5-02 (06/05/2024); mortgage insurance above 80% loan-to-value, Fannie Mae Selling Guide B7-1-01 (04/02/2025). FHA complete amortization and 30-year maximum term, 24 CFR 203.17(c)(2) and (d). VA final installment limit, 38 CFR 36.4310(a). Weekly 30-year fixed averages, Freddie Mac Primary Mortgage Market Survey. Michigan purchase-only house price index, seasonally adjusted, Federal Housing Finance Agency. Michigan foreclosure by advertisement, notice and redemption, MCL 600.3201, 600.3208 and 600.3240(8) and (9). Land contract forfeiture, notice and redemption, MCL 600.5726, 600.5728 and 600.5744(4); forfeiture and foreclosure remedies, Michigan Legal Help, “An Overview of Land Contracts.” Written promises by financial institutions, MCL 566.132(2) and (4). HUD housing counseling and the 800-569-4287 line, U.S. Department of Housing and Urban Development; counselors’ independent advice on loan terms, often at little or no cost, CFPB housing counselor search. Lawyer Referral Service fee and consultation length, State Bar of Michigan.

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Loan program rules, regulatory thresholds and Michigan statutory procedures change and vary by lender, loan purpose and property; confirm current figures with the cited source and your own loan documents, and consult a qualified professional about your situation. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is not affiliated with or endorsed by any government agency. Align Lending is an independent Michigan mortgage broker, NMLS #2041154.

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