This house on the 4100 block of Cadieux in Detroit was among the first offered by the Detroit Land Bank Authority. (David Coates / The Detroit News)
Detroit— JPMorgan Chase & Co. on Thursday plans to announce a program aimed at increasing the number of homeowners who bid in the auctions run by the Detroit Land Bank Authority.
The goal of the program, officials say, is to arm eligible homebuyers with financing for the repair and restoration of residential homes as part of JPMorgan’s five-year, $100 million effort to help revitalize the troubled city under bankruptcy.
The down payment help could be as high as $10,000 and the loans for renovation have no limits, officials said Wednesday. Chase says it has invested $20 million of the promised $100 million that was originally announced in May.
These loans are intended for city-owned homes that are blighted and get the proper resources to buyers to make the purchase work, officials say, because many Detroit homebuyers lack the money or loans to bolster and repair the dilapidated properties.
“Half of our auctions have been won by investors as opposed to homeowners, and one of the goals of the auction is to increase the number of homeowners in Detroit,” Mayor Mike Duggan said in a Wednesday telephone interview.
“This is tremendous way to get more homeowners by giving them assistance on down payments and renovations.”
Peter Scher, Executive Vice President and Head of Corporate Responsibility, JPMorgan Chase, said: “Traditional lending has been a challenge but this is a model that provides a way to get around that.”
Links to the potential down payment and renovation help will be available on the land bank’s auction site. Potential homeowners can find out whether they pre-qualify for the loans within a day. The funds will only be available for people who intend to live in the home. Duggan said about 80 homes have been sold through auction so far.
The program will first apply to homes in the Boston-Edison and East English Village neighborhoods, but could expand beyond that.
JPMorgan announced the launch of the Home Restoration Program with Liberty Bank in Detroit. JPMorgan Chase’s contribution will create a $5 million loan loss reserve fund for Liberty Bank to provide up to $20 million in new rehab residential mortgage loans
Chase isn’t the first to invest in Detroit. Quicken Loans founder Dan Gilbert has pumped $1.5 billion into the city, helping to spur redevelopment downtown and prompting a flurry of business growth to the region.
Drex Amy, president of the Michigan Region, Liberty Bank and Trust Company, praised the plan.
“It’s this kind of flexible focused that removes a barrier,” he said. “We are also setting up counseling through groups like U-SNAP-BAC that can help educate and inform potential homeowners.”