Detroit ― Residents looking to buy a home can apply for up to $25,000 in down payment assistance through a new program, city leaders announced Thursday.
The Downpayment Assistance Program, which includes 13 banking institutions as program partners, aims to convert renters into homeowners, protect them against rising rents and help them create generational family wealth, Mayor Mike Duggan said.
The program is funded with a $6 million allocation from American Rescue Plan Act pandemic relief funds.
“This is the first time this has been offered in 25 years and you can see why, it’s so hard it took everybody here together to do this but we are now open,” he said at Detroit Public Safety Headquarters on Thursday.
The program was suggested by District 4 Council Member Latisha Johnson as part of the $203 million Affordable Housing Plan council members and Duggan announced in July.
“This program will start hundreds of Detroit families on a path to a better life,” said Johnson, who grew up on the east side in a family of eight children. “This will be more secure in the present, knowing that they can have a place to call home while at the same time building generational wealth for their future, $25,000 makes that homeownership so much more accessible.”
A recent Zillow report cited by Duggan during his State of the City address this month shows that in Detroit more than any other city in the United States, Black-owned homes gained more value than White-owned homes. In the city, Black-owned homes saw a more than 51% increase in value, according to the report.
But in the same report, Zillow notes that Detroit has one of the highest mortgage denial rates for Black borrowers. The denial rate for Black mortgage applicants in Detroit is 18%, on par with New Orleans and higher than other Midwestern cities such as Milwaukee (15%), Chicago (14%) and St. Louis (12%).
➡For subscribers: Black-White gap on home ownership still besets Detroit, Michigan
“We have worked really hard to increase mortgage availability since the crash and back here, there were only 300-400 mortgages a year in the entire city,” Duggan said. “In 2015, I sat down with President Obama and I showed him what was happening in Detroit and the suburbs, and the discrimination that was going on and the way appraisals were being done. They addressed the issue on a national level and this is us addressing it on a local level.”
Who qualifies for down payment assistance?
Detroiters must have been living in the city for the last 12 months with proof of rent payments and utility payments. It’s not open to those who own a home already or has owned a home in the past three years.
The program has a capacity of 240 to 400 applicants on a first-come, first-serve basis. Duggan said he is optimistic it’ll go quickly.
Residents will be moving into a home that is up to code or can use a renovation mortgage to buy a home from the land bank and self-renovate it.
Income has to be 300% of the poverty level, falling in one of the following income categories:
- A single person making less than $43,740 annually
- A couple making less than $59,160 annually
- Three people making less than $74,580 annually
- Four people making less than $90,000 annually
- Five people making less than $105,420 annually
- Six people making less than $120,840 annually
- Seven people making less than $136,260 annually
“One of the first steps is identifying a lending institution that you’ll partner with on a mortgage,” said Julie Schneider, director of Housing & Revitalization Department.
Mortgage partners include Bank of America, Chase Bank, CIBC, Citizens Bank, Fifth Third Bank, First Independence Bank, First Merchants Bank, Flagstar Bank, Huntington Bank, Independent Bank, Liberty Bank, PNC Bank and Rocket Mortgage. The banks were coordinated with the help of businessman Gary Torgow, chairman of Huntington Bank.
Once Detroiters have a lender and a house in mind, they can apply at www.detroitdpa.org or by calling (313) 244-0274.
The program is going to change lives, said Dina Harris, founder and president of National Faith Homebuyers. The nonprofit assists families in purchasing a home by providing education and services to allow them become financially independent and make informed choices. National Faith Homebuyers will be vetting applicants.
“I promise you we’re going to try and help you spend every nickel you’re entitled to and make your dream of owning a home a reality,” Harris said. “No more worrying about your landlord raising your rent, no more worrying about having to move your child to another school.”
Johnson said the program will give potential homeowners a financial boost amid rising prices.
“This down payment assistance plan will help individuals eliminate the possible fluctuations and rental rates to provide more financial stability and ensure families will have shelter as well as an opportunity to build generational wealth,” Johnson said. “I also have a plan that I’m working with the administration to develop 1,000-unit townhouses for individuals that we’re talking about today to provide them with some support and down payment assistance so lower-income individuals can become homeowners.”
Owners who have lost homes to foreclosure get preference
Duggan said there are too many landlords in Detroit with several houses they can’t maintain and suggested landlords who are “spread too thin” sell some of their properties to help bring the others into compliance.
“The city’s enforcement of our rental code is only going to get stricter and stricter, and those fines are going to pile up,” Duggan said. “If you own too many houses and you can’t keep them up to code, as a landlord, you should think about talking to a couple of your tenants and say to them, I can sell you this house and there’s down payment assistance available.
City Council President Mary Sheffield said the council and administration are united in building accessible, affordable housing. She recognized there is a class of Detroiters who were over-assessed in their home and possibly lost their home to property tax foreclosure. In 2020, The Detroit News investigation that revealed Detroit overtaxed homeowners by at least $600 million after it failed to accurately bring down property values in the years following the Great Recession.
“Part of this program, I really push to work with the mayor to ensure that we are creating programs to address individuals who were overassessed,” Sheffield said. “We know that we have legal issues and challenges whether or not we can provide direct compensation. Those that may have lost their home to property tax foreclosure get preference in this program and to receive this down payment assistance so that they can be a homeowner.”
srahal@detroitnews.com
Twitter: @SarahRahal_
Source: detroitnews.com
