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.
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.
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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