Duggan: New mortgage plan ‘a game-changer’
Detroit — A $40 million program was announced Thursday that aims to create 1,000 new home mortgages in Detroit — a city where getting a traditional home loan is a huge challenge.
With Detroit Home Mortgage, qualifying borrowers will get a first mortgage for the appraised value of the home, and a second mortgage up to $75,000 to fill the gap between the appraised value and sale price and/or cost of renovations.
The $40 million fund is being applied to second mortgage. The new program is expected to create to $100 million in new mortgages, officials said.
“This is a game-changer,” Mayor Mike Duggan said in a packed North Rosedale Park home where the announcement was made Thursday. On hand was the president of the Clinton Foundation, Donna Shalala, Gov. Rick Snyder and the presidents of five banks participating in the new mortgage plan.
Those banks are Huntington, Flagstar, Talmer, FirstMerit and Liberty.
The new mortgages can be applied to any Detroit home. Applicants must have a minimum FiCO credit score of 600 — though at least 640 is preferred — and adequate income. The home must be the buyer’s primary residence.
Other contributors to the fund are the Ford and Kresge foundations and the Michigan State Housing Development Authority.