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Michigan House approves higher minimum mortgage thresholds after floor debate
Summary
The Michigan House passed House Bill 5497, changing state minimum mortgage thresholds and adding an inflation-adjustment mechanism. Supporters said the measure modernizes an outdated rule; opponents warned it could shut out small-dollar borrowers. The bill passed 72–29 with one abstention.
The Michigan House on third reading approved House Bill 5497, a proposal to change the state's minimum mortgage thresholds and add an inflation-adjustment mechanism, passing the measure 72–29 with one member recorded as abstaining.
Representative Myers Phillips urged colleagues to oppose the bill, saying the change “will raise the minimum mortgage from 10,000 to 45,000” in practical effect and would “shut people out of one of the most important wealth‑creating tools ever invented, home ownership.” He argued the change would harm first‑time homebuyers, seniors and people on fixed incomes and warned the measure “codifies the notion that the free market bends towards the big and the powerful.”
Representative Schuette, sponsor of the bill, said the legislation removes a Michigan‑specific requirement and phases in higher minimums — raising the baseline to $15,000 and then increasing it further over the next two years — while providing a mechanism to adjust the threshold for inflation. “These minimums were established over 30 years ago,” Schuette said, adding the change brings Michigan in line with other states and reduces regulatory friction for mortgage originators.
Representative Stecklaw announced an abstention from the vote on the floor citing a potential conflict of interest.
After debate and adoption of a floor substitute, the clerk reported the final roll‑call tally as 72 ayes and 29 nays; the majority floor leader then moved for immediate effect and the House ordered immediate effect.
Details of the bill, as described on the floor, include a phased increase of the minimum mortgage amount and a provision allowing future adjustment tied to inflation. Supporters framed the policy as modernization and consumer protection through clearer market rules; opponents said it would raise barriers for small‑dollar borrowers. The House record shows the bill passed and will proceed under the next steps prescribed by law for enactment and implementation.
