The city of Detroit unveiled a plan Thursday to help as many 400 renters buy a home with up to $25,000 in downpayment assistance.
The Downpayment Assistance Program, which is funded by $6 million from the American Rescue Protection Act (ARPA), is intended for lower- and middle-income residents who can afford mortgage payments.
While primarily intended for renters, the program is also available to residents who lost their home to property tax foreclosure between 2010 and 2016, when the city overassessed property values.
The idea is to create generational family wealth and protect against rising rents, Mayor Mike Duggan said.
“This is for people in the city who are paying $800, $1,000, $1,200 a month in rent,” Duggan said at a news conference. “If you are paying that now, there is an excellent chance you can buy a house and pay your taxes and it’ll cost you less per month than it does to rent.”
The city partnered with 13 banking institutions that will help Detroiters with a mortgage. They are Bank of America, Chase, CIBC, Citizens, Fifth Third Bank, First Independence Bank, First Merchants Bank, Flagstar Bank, Huntington Bank, Independent Bank, Liberty Bank, PNC Bank, and Rocket Mortgage.
“It is vitally important that as property values continue to climb, people of varying incomes are able to buy a home,” Councilwoman Latisha Johnson said. “Owning a home provides stability for them and their family. Having to move because your landlord has increased your rent means not only having to find a new place to live, but also uprooting your child from their school, leaving friends and relationships you have developed, and possibly leaving the community you love and call home. This program is about helping more Detroiters to remove that instability so that they can feel secure in their future.”
To be eligible, applicants must have lived in Detroit for the past 12 months or lost their home to tax foreclosure between 2010 and 2016.
The income requirements are:
• 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
• Eight people taking less than $151,680 annually
The program comes at a time when a disproportionate number of Black residents are renting.
Black Detroiters are more likely to be denied mortgages, regardless of their income level, according to Detroit Future City, a think tank that develops strategies for a more equitable city. Higher-income Black residents, for example, were denied a loan at a higher rate than moderate-income white applicants.
Until last year, more Detroiters were renting than owned a home.
“There are a lot of Detroiters who are paying more in rent each month than the cost of a mortgage payment but need some help with upfront costs associated with purchasing a home,” Duggan said. “Thanks to President Biden and the American Rescue Plan Act, we can help hundreds more Detroiters own their own homes, create generational wealth and protect themselves from the increasing rents we are seeing as our city rebuilds. We are already seeing more people benefitting from the opportunity to become homeowners in Detroit, and this is a chance for more Detroiters to join them.”
To apply, a Detoiter must have a lender from a participating bank and a house in mind. For an application, see detroitdpa.org or call 313-244-0274.
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