The city of Detroit has launched the Detroit Home Mortgage Initiative, a program aimed at helping those who want to purchase a home.
Detroit’s housing market was hit hard both by a number of bankruptcies and by the recent recession, leaving many in the city unable to afford to buy property. Even those who have stable employment and a good credit score are not able to easily get a mortgage. Banks are wary of lending large sums of money to anyone due to the volatility of the housing market.
Enter the Detroit Home Mortgage Initiative
This new program aims to turn around the market failure in the city, which is far worse than most people realize. According to information from 2014, there were 3,500 homes bought during the year, but out of those, less than one-seventh (462) of these homes were purchased via mortgage. Real estate agents, homebuyers, and city officials are particularly frustrated by the difficulty people are having in receiving mortgages.
The Detroit Home Mortgage Initiative, a partnership between the Michigan Governor’s Office, the City Mayor’s Office, the Clinton Global Initiative, two national foundations, and five regional banks, was formed to help potential buyers overcome this difficulty. The Initiative will offer mortgages to qualified individuals based on the appraised value of the property. The program will also provide direct loans to buyers to make up the difference between what the property was appraised at and the cost the borrower will actually incur to occupy the property.
Those who want to take advantage of the Initiative’s program will have to meet a number of minimum requirements. These include having a credit score of at least 640 and showing proof that they have enough income to make their mortgage payments and cover their living expenses.