Building on the success of the first two rounds of Detroit’s popular Down Payment Assistance (DPA) Program, Mayor Mary Sheffield and the Housing and Revitalization Department (HRD) recently announced the opening of Round 3 applications. Over the past two years, the program already has created nearly 800 first time homeowners in Detroit, most of which have gone from being renters to becoming owners.
This third round will provide up to $25,000 in down payment and prepaid cost assistance to eligible Detroit residents, with expanded prioritization for households impacted by the August 2023 flooding disaster. Round 3 is funded with $1.7 million in HUD Community Development Block Grant (CDBG) funds and $8.77 million in CDBG-Disaster Recovery funds, allowing the City to assist up to 450 new homebuyers across Detroit.
“Few things are as meaningful to a family as owning their own home. Not only does it provide stability and security that doesn’t come with renting, it’s a major way to build generational family wealth,” said Mayor Sheffield. “Detroit once led the nation in single family home ownership, and the Down Payment Assistance Program can help us move back in that direction.
The announcement took place at Crowell Recreation Center in District 1, which had the highest concentration of homes purchased through the first two rounds of the program. District 6 in Southwest Detroit had one of the lowest utilization rates for the first two rounds.
Building on Proven Success
Launched in March 2023, the Detroit DPA Program has already awarded assistance to 794 households across its first two phases, helping Detroiters overcome upfront costs and access sustainable homeownership. The average DPA award was nearly $25,000, with participating households averaging $970 per month in total mortgage costs, well below typical rental rates in the region. Buyers in the program also have a much higher success rate
What’s New in Phase III
Phase III introduces several programmatic updates aligned with federal CDBG and CDBG-DR requirements while maintaining the program’s core goal of helping low- and moderate-income Detroiters purchase a home.
Key updates include:
- Income eligibility capped at 80% of Area Median Income (AMI)
- Lower housing cost burden requirement, with a maximum 30% payment-to-income ratio
Most notably, residents impacted by the August 2023 flooding disaster will be prioritized during Phase III. Applicants can demonstrate flood impact by providing either a FEMA claim or a Detroit Water and Sewerage Department (DWSD) claim, ensuring that households with verified disaster-related losses can more quickly access assistance.
“The City of Detroit’s efforts to increase homeownership for new homebuyers is a key part of HUD’s mission,” said Keith Hernández, Director of Community Planning and Development. “We are excited to be partners in this endeavor and will to continue to support the city’s ongoing commitment to strengthen neighborhoods.”
Eligibility Requirements
To qualify for Phase III of the Detroit Down Payment Assistance Program, applicants must:
- Be a Detroit resident for at least 12 months, or have lost a home to property tax foreclosure between 2010 and 2016
- Have not owned a home in the past three years
- Meet income limits at or below 80% AMI
- The total household income for applicants cannot exceed the following income limits per household size:
- Be pre-qualified for a mortgage with a participating lender
- Have a signed purchase agreement
- Complete a HUD-approved homebuyer education course
Flood-impacted applicants who meet these requirements will receive priority consideration as part of the City’s long-term disaster recovery strategy. To demonstrate impacts, residents will need to submit a Detroit Water and Sewage Department claim or a Federal Emergency Management Agency (FEMA) claim.
Strengthening Neighborhoods Through Homeownership
Administered by the City of Detroit’s Housing and Revitalization Department, Phase III of the DPA Program supports the City’s broader housing strategy by pairing homebuyer assistance with counseling, education, and financial empowerment services.
“Down payment assistance is one of the most effective tools we have to reduce housing cost burden and stabilize neighborhoods,” said Julie Schneider, Director of the Housing and Revitalization Department. “By leveraging CDBG and CDBG-DR funds, we’re ensuring that Detroiters—especially those impacted by the flooding in 2023—have a real pathway to safe, affordable homeownership.”
“Homeownership is the single most impactful generational wealth builder, and we are thrilled to see more DPA funds deployed in Detroit,” said Aaron Hall, vice president of the Detroit Market for CHN Housing Partners, network manager of the Detroit Housing Network (DHN). “We are proud to partner with the City of Detroit and National Faith Homebuyers to connect Detroiters with homebuyer education and counseling and assist eligible residents in applying for down payment assistance.”
The program is being implemented by National Faith Homebuyers, a Detroit-based nonprofit that since 1996 has assisted metro Detroiters in buying a house or staying in their homes, including down-payment assistance, first-time homebuyer counseling, and financial literacy programs.
“Homeownership changes lives. Through the City of Detroit’s Down Payment Assistance Program, we’re helping Detroit residents overcome the biggest barrier to buying a home and giving more families the chance to put down roots and build generational wealth right here in their neighborhoods,” said Dina Harris, Founder and CEO of National Faith Homebuyers.
The Ownership Initiative, a Black-owned impact advisory firm headquartered in Detroit, helped design the program. Founded by CEO Krysta Pate, The Ownership Initiative has helped create more than 30 initiatives across six states that have collectively deployed over $100 million into personal wealth building, affordable housing, and small-business empowerment opportunities.
“Expanding homeownership requires real collaboration across community,” said Krysta Pate, Founder of The Ownership Initiative. “We’re grateful the City of Detroit trusted our advisory firm to help steward the partnership with lenders, ensuring the program works in today’s lending environment while expanding opportunities for Detroit families.”
Eligibility & How to Apply
Here’s what interested homebuyers can do to apply and receive funding:
To apply for this program, you must:
- Find your lender and get pre-qualified for a mortgage.
- Find your home and have a signed purchase agreement.
- Take a homebuyer education class.
- Apply to the DPA Program.
To learn more about program details and eligibility requirements, and to apply, go to www.detroitmi.gov/DPA or call the Detroit Housing Resource HelpLine at 866-313-2520 (option 3 after the language prompt) to be connected to program partners. The city will be utilizing Neighborly Software for applications. Staff will be on hand to help with applications.
