Affordability Gap Assistance Program (AGAP) Professional Training & Resource Center

AGAP is a companion mortgage that pairs with traditional lending. AGAP fills the “affordability gap” between what a household can reasonably borrow and the actual purchase price of a quality home. AGAP is a second mortgage that expands buying power up to 25% for middle-income families who would otherwise be priced out of buying a quality home due to rising values.

It is important to know that AGAP is not a grant. AGAP is a loan that must be repaid over time.

Middle income households with income at 80%-12% AMI (per MSHDA income tables), a minimum 620 credit score, able to contribute a minimum of 1%, who do not currently own a home and are searching in Oakland or Wayne County areas including low to moderate census tracts and/or majority diverse census tracts.

Both new construction homes or renovated homes are allowed. They can be single family homes or condominiums (either detached or attached). “Renovated” is defined as having improved a necessary asset in the home and having a home inspection report deemed acceptable by Oakland Housing.

Up to $80,000 per family with a maximum of 25% of the purchase price. The first round of AGAP funding is just over $1 million and should serve about 14 families.

AGAP works by offering a 30-year second mortgage with flexible interest rates and repayment terms up to $80,000, limited by 25% of the total purchase price. For the first five years, AGAP requires zero payments at a 0% interest rate. Then for the next five years interest only payments at 2% below the first mortgage interest rate. Finally, the remaining 20 years with fully amortized payments at an interest rate matching the first mortgage.

The lender originates and underwrites both the 1^st and AGAP 2^nd mortgage.

The borrower is responsible for sending any out-of-pocket funds (if applicable), typically via wire or cashier’s check.

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