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Duggan touts zero-interest home repair loan program

Derek Draplin
The Detroit News

Mayor Mike Duggan on Tuesday announced a zero-interest home loan repair program that will allow eligible residents to secure $5,000 to $25,000 in funding for home improvements.

Eligible residents include homeowners whose income is less than $37,950 for individuals or $54,150 for families with credit scores of at least 560. The city is offering financial consulting services for those who don't meet the credit score minimum.

"I wanted something for people who owned their homes and had stayed in the neighborhoods," Duggan said during a press conference at Joshua Temple Church of God in Christ on Detroit's east side. "But we could not have come up with enough money on our own."

By partnering with Bank of America, the city of Detroit secured $8 million for financing, he said.

"That's the beauty of this program is we're creating a permanent source of funds to finance the rehab of houses so that everybody that stayed in this town is going to benefit from what I believe will be the growing property values that we're seeing in a number of neighborhoods," Duggan said.

The loan must be paid back within 10 years and the program will use Detroit-based contractors to make repairs. Contractors must come from a list of city-approved vendors and will be paid directly by the program.

"Make no mistake, this is not a giveaway, this is a loan; we won't foreclose on you ... but if you don't repay the loan it will affect your credit score," Duggan said.

The mayor made it clear the plan isn't for investors. Homeowners must live in the home for at least six months prior to receiving funding. Homeowners must also be current on their taxes and their homes must be insured.

Residents can download applications online at, then go to one of 14 intake centers around the city. It's expected it will take 60 to 75 days after applying to get loan approval and have work started.

"With this loan program it gives all of us, especially those in our neighborhoods who have stayed, now the opportunity to make the needed investments in our homes," city councilman Scott Benson said.

Eligible projects include plumbing, electrical repairs, furnace replacement, roofing replacement and structural support work, among other renovations.

The Local Initiatives Support Corporation and federal block grants will also help fund the program. Bank of America also pledged to add another $1 million to cover administrative costs over time.

"I think it's great because when you improve your home, it gives you self respect and value," said Rita Carpenter, a resident who plans to apply the program. "The great thing is zero interest."