About Detroit Home Mortgage Impact

In 2008, the Great Recession greatly reduced home values and the number of home sales in Detroit, effectively turning the city into a cash-based real estate market. As a result, many potential homebuyers had good credit scores and stable incomes but could not get a mortgage because the appraiser could not find a similar home nearby with a large enough comparable sales price. Also, many distressed homes in the city did not qualify for the traditional lending necessary to purchase them, renovate them, and make them livable. This lack of financing forced many families either to pay cash or to rent instead of building equity and investing in their futures.

Detroit Home Mortgage (DHM) was launched in 2016 as a collaborative effort between local banks, foundations, Community Development Financial Institutions (CDFIs), the City of Detroit, and community organizations to address financial gaps in appraisals so borrowers could afford to buy, renovate, and live in one of the many homes available for sale in the city of Detroit. DHM was designed as a temporary market intervention to increase the number of mortgages throughout the city by laying the groundwork for real, negotiated appraisals in real estate transactions. DHM served as a catalyst by allowing buyers and sellers to negotiate low appraisals to determine the true value of the home. As a result, neighborhoods throughout the city saw increases in the availability of mortgages. This map, created in partnership with the Detroit Land Bank Authority, illustrates the catalytic nature of DHM over time.

Homebuyer Education

DHM required borrowers to take two different courses to obtain a Detroit Home Mortgage: a High Combined Loan-to-Value course that explained market conditions along with the pros and cons of the program and a Department of Housing and Urban Development(HUD) or Michigan State Housing Development Authority (MSHDA) approved Homebuyer Education course. For properties requiring renovation, a renovation course teaching DHM borrowers about the roles necessary for success was also required. The High CLTV and renovation courses were designed specifically for DHM and are no longer offered; however, the following participating Homebuyer Counseling Agencies continue to offer HUD or MSHDA homebuyer courses. If you need a HUD or MSHDA approved homebuyer course, please contact one of the organizations below.

Participating Banks

Detroit Home Mortgage was offered by the participating banks listed here. All banks offered the same Detroit Home Mortgage rates.

Program Partners

The Detroit Home Mortgage partnership was a first-of-its-kind intervention led by Community Reinvestment Fund, USA (CRF), The Kresge Foundation and Ford Foundation, the City of Detroit, Michigan State Housing Development Authority (MSHDA), nonprofits, participating banks, and other committed financial investors.

CRF is a national non-profit organization with a mission to improve lives and strengthen communities through innovative financial solutions. A leading Community Development Financial Institution (CDFI), CRF supports mission-driven organizations, increases economic mobility, and builds strong local economies through the development of solutions aimed at creating a just economy that works for all.

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Frequently Asked Questions

Can I Apply for a Detroit Home Mortgage?
Potential borrowers applied for a mortgage with one of the participating banks just like they would for any other real estate transaction. However, once the appraisal was determined, the bank would split the loan into two mortgages with low, fixed rates. The first mortgage would be for 96.5% of the appraised value. The second mortgage would be for the amount above the appraised value up to $75,000.
Detroit Home Mortgage compensated for low property values by allowing homebuyers to borrow up to $75,000 more than the home’s current appraised value.
The housing and credit crisis from 2006-2010 greatly reduced home values and the number of home sales in Detroit. As a result, many homebuyers could not get mortgages because appraisers could not find similar homes to compare sales prices. This situation led to banks not lending the amount needed to buy a home. Home values across the city are still very low and have yet to fully recover from the recession. Many homes in Detroit did not qualify for a traditional loan. Detroit Home Mortgage allowed a qualified buyer to borrow on the true value – not the current appraised value – of their home.
No. Detroit Home Mortgage was a first-of-its-kind collaboration of local banks, foundations, Michigan State Housing Development Authority (MSHDA), and nonprofits seeking to address Detroit’s low property values and ultimately rebuild Detroit’s neighborhoods.
Detroit Home Mortgage could be used in all the neighborhoods of Detroit. There were no restrictions on location except that the home had to be within Detroit city limits. Detroit Home Mortgage could only be used on a single-family (1 unit) up to a four-family (4 unit) home that was considered the borrower's primary residence, meaning that they must have planned to or already lived in the home.
Detroit Home Mortgage featured low, fixed rates on the first mortgage and second mortgage. A Detroit Home Mortgage was a loan like any other mortgage and must have been repaid. However, if you are a borrower experiencing a hardship, please contact your Detroit Home Mortgage lender or your homebuyer counseling agency.

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