Detroit neighborhoods and other Michigan cities plagued with blight got another boost thanks to $74.5 million funding from the U.S. Department of Treasury.
Those dollars, which came from the department’s Hardest Hit Fund, will be used to eliminate blight and provide mortgage and property tax assistance. Even more could be on the way. By March 11, the Michigan State Housing Development Authority (MSHDA) plans to apply for a share of an additional $1 billion in that fund.
The Hardest Hit Fund was first announced in February 2010 to provide help to the 18 hardest hit states and the District of Columbia develop locally-tailored programs to assist struggling homeowners in their communities.
“The Hardest Hit Fund has been critical in helping homeowners stay in their homes and avoid foreclosures while helping cities like Detroit and Flint in particular eliminate blight and improve neighborhoods,” says Snyder.
Those dollars come at a very opportune time.
Mayor Mike Duggan just announced a program known as “Detroit Home Mortgage.” That program will enable banks to lend qualified homebuyers the full amount needed to purchase a renovated home or to buy and rehabilitate homes anywhere in the city of Detroit. It is supported by a consortium of the largest financial institutions serving Detroit.
That program will help boost home ownership in Detroit’s neighborhoods. While there has been a lot of interest, the market has been slow because of financing issues associated with loan-to-value rates, which often come in at less than the asking price of the home.
The new DHM program complements existing programs like the Detroit Neighborhood Initiative ,which gives homebuyers in Detroit a zero-down, low interest, fixed-rate mortgage and other very favorable terms with rehabilitation dollars needed to rebuild Detroit’s classic houses and neighborhoods. The program is a partnership between the City of Detroit, the Neighborhood Assistance Corporation of America and Bank of America.
Under the program buyers can receive loans worth up to 110 percent of a home’s loan- to-value ratio. It’s even better for homes bought through the Detroit Land Bank where the loan-to-value ratio increases up to 150 percent. The Detroit Land Bank owns nearly one-fifth of the land in Detroit.
MSHDA will submit a distribution plan to the U.S. Department of Treasury for approval by March 4. After the plan is approved, it will announce statewide allocations and next steps for fund distribution.
“We are ready to insert these dollars into cities and continue the positive momentum of eliminating blight so it can no longer stand in the way of neighborhood revitalization,” says MSHDA Executive Director Kevin Elsenheimer.
Since 2010, MSDHA has helped 29,798 households with more than $230 million in mortgage and property tax assistance. The blight elimination program has allocated $121 million since its creation in 2013, helping to clean up or demolish more than 8,000 abandoned structures.