The affordable homes that have been popping up in the Detroit auctions are nothing new to our followers with Own It Detroit, but new legislation passed by Mayor Mike Duggan has created even more potential for many of the abandoned homes across the city.
Many of those who were purchasing homes in Detroit paid with cash. Very few were eligible for a mortgage, and this hurt production and turnover in some areas across the city. Additionally, many of these homes required so much attention and care that the cost to fix them outweighed the overall value.
Duggan explained that he knows people are ready to get back into Detroit and help the city rebuild from the ground up. However, the problem lies with lenders not willing to give Detroit a second chance to bounce back. This is where the Detroit Neighborhood Initiative and Bank of America come into play.
Along with additional support from non-profits, these two companies found a way to provide real loans to potential homeowners, in order to bring forward more mortgages. These new mortgages will write up to 150% of the Detroit home’s value. To reach this amount of value, Detroit has also partnered up with the Opportunity Resource Fund, to give potential homeowners more value than even Bank of America can provide.
Mortgages in Detroit through the Detroit Neighborhood Initiative also include the following perks:
- No money down
- No closing costs
- No extra or hidden fees
- No income limits
- No credit score consideration
- Interest rates close to 0%
- Can receive up to $200,000 in loans
Being compared to the process of VA loans, Duggan and the Detroit Neighborhood Initiative believe that this process will allow more people to purchase the homes being placed up for auction, and throughout the neighborhoods.
Duggan also explained that rather than renting in Detroit, where numbers can be very high, he is encouraging people to purchase, renovate, and live inside already existing Detroit homes, for a fraction of the cost. Duggan doesn’t believe that going forward with these loans provides any risk for Detroit, but rather has put faith into these new mortgages lending loans, due to their basis of affordability.
To find out more information on the Detroit Neighborhood Initiative, or see if you can qualify for one of these new mortgage based loans, visit the NACA website.