Detroit’s down payment assistance plan serves as model for Harris proposal, Duggan says

Vice President Kamala Harris on Friday announced a proposal to provide up to $25,000 in down payment assistance to first-time home buyers, as part of a broad economic policy agenda the presidential nominee laid out at an event in North Carolina.

The proposal may sound familiar to Detroiters. That's because a city program, which offers as much as $25,000 in down payment assistance for residents to purchase homes, is serving as a model for the national initiative, according to Detroit Mayor Mike Duggan.

"I do think that first-time homebuyers across the country should be able to get the same benefit that Detroiters get," Duggan told the Free Press on Friday, noting that a federal version of the program ensures it can continue in Detroit.

Duggan said Gene Sperling, a former senior adviser to President Joe Biden and American Rescue Plan coordinator, came to a June news conference announcing the second round of Detroit's down payment assistance program and took what he saw back to Washington, D.C.

Duggan said Sperling called him earlier this week and told him that one of the first proposals of the Harris campaign was to make housing more affordable for first-time buyers by using the Detroit program as a model. Sperling will be a senior economic adviser to the Harris campaign, according to the Associated Press.

"He went back to D.C. and said, 'this is the simplest and most effective way to boost home ownership among lower-and moderate-income families,' " Duggan said.

More: Duggan's strong rapport with Biden White House will end: What Detroit must do next

Earlier this summer, the city announced that it was reopening its down payment assistance program. The program, which originally kicked off last year, helped 434 residents become first-time homeowners with $12 million in American Rescue Plan Act (ARPA) dollars. In the second round, as many of 300 Detroiters are able to apply. The next phase is backed by $5 million in ARPA dollars and $2 million from banks, philanthropic groups and Wayne County.

"Right now, Detroit is drawing a lot of national attention for a lot of our programs, but this is the first time that I can remember that you had a presidential campaign take a program so directly from a Detroit success," Duggan said.

In order for the down payment assistance program to continue in Detroit, the city needs the national plan. Duggan said Detroit's program was possible because of a combination of pandemic-related dollars and help from banks, but the ARPA money is gone now.

"We didn't have a plan for what we did in 2025 but now we have a plan. We just elect Kamala Harris president. The program will continue in Detroit and across America," Duggan said.

On Friday, Harris highlighted a swath of policy proposals to lower Americans' cost of living. Those include: a federal ban on price gouging on food, lowering the cost of prescription drugs, canceling medical debt, building 3 million new homes and rentals, cracking down on corporate landlords with high rent prices, providing $6,000 in tax credits for families during the first year of a child's life and $25,000 for first-time homebuyers.

"As the price of housing has gone up, the size of down payments have gone up as well. Even if aspiring homeowners save for years, it often still is not enough," Harris said.

Renters have said the biggest barrier to buying a home is saving enough money for a down payment and closing costs, especially for those without parents who can financially support them. But down payment assistance can help bridge the gap, according to the Urban Institute, a Washington, D.C.-based nonprofit.

City officials, earlier this summer, touted the success of the first phase of Detroit's down payment assistance program, which aims to turn renters into homeowners. Applicants received $24,582 in funding on average. The average sale price of a home was $112,000 and the average mortgage payment was $926. Nearly 94% of recipients are African American.

In June, Sperling said the Detroit program could serve as a national model.

"This is about families who are making rent every single month. Every single month, they are working and meeting their most important obligation — their rent — even when it's too high of a cost," he said at the time. "And what keeps so many people from turning that into being a homeowner where they're gaining equity and they're building wealth, it's that they don't have that extra $25,000 sitting around."

A 2021 analysis from the University of Michigan found that thousands of Detroiters wanted to become homeowners between 2015 and 2019, but many didn't end up getting a mortgage, demonstrating the challenges city residents face when purchasing homes.

Detroit has used its portion of pandemic-related federal funding for a range of housing related programs, including down payment assistance, roof repairs and services for those facing homelessness.

Next month, Duggan said he plans to announce a "major plan" for the expansion of long-term affordable housing. That includes, he said, a simplified process for developers who want to build affordable housing in Detroit, where they can get automatic tax breaks and credits based on how much they discount rents for tenants.

"We're working on a plan to make it really easy for anybody who wants to build affordable housing to do it in Detroit," Duggan said.

USA TODAY contributed to this report.

Contact Nushrat Rahman: [email protected]. Follow her on X: @NushratR.

This article originally appeared on Detroit Free Press: Harris' home down payment plan modeled after Detroit, Duggan says