Mayor Mike Duggan, City Council members and the Detroit Housing & Revitalization Department announced a landmark program on Thursday, March 30th that will provide Detroiters who do not currently own a home with up to $25,000 in downpayment assistance to help them realize the American Dream of homeownership.
The program is available to lower-income earners who may be able to afford a monthly mortgage payment buy don’t have savings enough for a downpayment. For a single person to qualify, for example, they would have to earn less than $41,000 per year.
The program is part of a $203 million Affordable Housing Plan that Mayor Duggan and Councilmembers Latisha Johnson, Mary Waters, Angela Whitfield Calloway and Gabriela Santiago-Romero unveiled last July. Downpayment assistance was among Johnson’s contributions to the housing plan, with the issue being a major priority for the councilwoman, who spent 15 years in the community fighting for increased access to home ownership for Detroiters.
Funded by $6 million in American Rescue Plan Act (ARPA) funding, the Detroit Downpayment Assistance Program provides qualifying Detroit households grants of up to $25,000 for a downpayment. Funding also can be used for other home purchase-related expenses, including prepaids (such as escrow deposits for property taxes), interest rate buy-downs, closing costs and reduction in principal. The program is expected to help between 240 and 400 lower-income and middle-class homebuyers in the next two years, depending on the amount each family needs in downpayment assistance.
“It is vitally important that as property values continue to climb, people of varying incomes are able to buy a home,” Councilmember 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.”
Boosting Detroit homeownership
This new effort to boost homeownership in Detroit comes six months after Detroit’s return to its status of being a majority homeowner city for the first time in decades. Mayor Duggan said the Downpayment Assistance Plan can build on that progress.
“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,” Mayor 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.”
Easy as 1-2-3
The mayor and councilmembers laid out three steps for Detroiters to follow to take advantage of the program.
- Find a lender from among the 13 partner organizations in the program. The participating lenders 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.
- Find a house you want to buy.
- Apply to the program at www.detroitdpa.org.
Eligibility and application process
To be eligible to apply for the program, Detroit residents must not have held an interest in property in the last three years. The total household income for applicants cannot exceed the following income limits per household size:
1 Person/ $43,740, 2 Person/ $59,160, 3 Person/ $74,580, 4 Person/ $90,000, 5 Person/ $105,420, 6 Person/ $120,840, 7 Person/ $136,260, 8 Person/ $151,680
Applicants must prove they have lived in the city of Detroit for the last 12 months, or that they lost a home in the city due to property tax foreclosure between 2010 and 2016. From 2010 to 2014, the City’s residential property assessment process was broken, resulting in many homeowners being overtaxed. Upon taking office in January 2014, Mayor Duggan immediately cut residential assessments by 22% his first month in office and continued to reduce assessed values over the next two years to reflect the market at the time. Full program details and eligibility requirements are available at www.detroitdpa.org.
All individuals receiving a grant must use the home as their principal residence for three years after the grant award or pay back the loan on a pro-rated basis, based on how long they lived in the home after the grant award. The grants apply when the applicant is buying a home using a purchase mortgage or a purchase renovation mortgage.
To learn more about program details and eligibility requirements, and to apply, go to www.detroitdpa.org or call (313) 244-0274. The National Faith Home Buyers team can assist residents with detailed questions, and assistance with completing the DPA application.