Detroit down payment assistance program reopens for applications: How to apply

Detroit renters looking to become homeowners have another opportunity to make that happen.

City officials, joined by President Joe Biden's American Rescue Plan coordinator, announced the launch of the second round of a program that can provide up to $25,000 in down payment assistance for Detroiters to purchase homes. The program, which originally kicked off last year, has helped 434 residents become first-time homeowners with $12 million in American Rescue Plan Act (ARPA) dollars.

Now, as many of 300 more Detroiters can apply for the next phase of the program, backed by $5 million in ARPA dollars and $2 million from banks, philanthropic groups and Wayne County.

"We are building Black wealth. It is the people who stayed in this community that are benefiting from the homeownership," said Mayor Mike Duggan at a Thursday news conference held in the Morningside neighborhood where he grew up. Fifteen homes in the area went from renters to homeowners through the program.

A place to call home

Officials touted the success of the first phase of the program. 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. The down payment assistance was granted throughout the city with the most awards in District 1, home to the Rosedale Park and Hubbell-Lyndon neighborhoods, and District 2, which includes College Park and the University District.

Satin Adams teared up as she spoke about how the program helped her become a first-time homeowner. Adams was living in subsidized housing at the Martin Luther King Apartments, but she wanted a backyard for her six children, and was ready for the next step. Through the down payment assistance program, Adams was approved for $25,000 and bought a single-family home in Morningside.

"My mom never bought a home. My siblings never bought a home, so this is great for me," Adams, 32, said.

As soon as Micah and Megan Williams moved into their new Virginia Park home earlier this year, their daughter Maliyah began crawling. Now 13 months old, she's walking.

"This has completely, completely changed just our outlook of how we can love our neighbors, how we can love our city. We get to live in the neighborhood where we get to serve our students," Micah Williams, 24, said. The couple both work in youth ministry.

The former renters are now able to host more than 100 people for dinner and are excited to be part of the community.

"Now we get to have a place that we get to call home and do life in," he said.

A national model

Gene Sperling, senior adviser to the president and American Rescue Plan coordinator, said the program can 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. "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."

The program, administered by the Detroit-based nonprofit National Faith Homebuyers, is part of a broad $203 million plan to stabilize housing for city residents.

"This is proof that the American Dream is a reality in the city of Detroit," At-Large Council Member Coleman A. Young II said.

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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. People couldn't find a home in the area they wanted, weren't approved for loans, needed to work on their credit score and homes needed too many repairs.

City officials noted an increase in homeownership over the past decade. Detroit saw 2,569 financed home sales last year, up about 686% from 327 in 2013, according to a news release, citing Realcomp Multiple Listing Service data.

"One of the biggest barriers that exists is access to capital. So, this down payment assistance program allows our residents to get up to $25,000 and go into a bank with confidence," said District 7 Council Member Fred Durhal III.

Banks lent more than $40 million, said Krysta Pate, CEO of the Ownership Initiative, which designed the down payment assistance program.

How Detroit's down payment assistance program works

The down payment assistance program is targeted toward renters but it is also available to those who lost their homes to property tax foreclosure from 2010 to 2016 as a result of overassessments.

Eligibility requirements

• The applicant — who must have proof they've lived in Detroit for the last 12 months or lost their home to property tax foreclosure between 2010 and 2016 — must not have owned a home in the past three years.

• The total household income cannot exceed the following income thresholds: $45,180 for a one-person household; $61,320 for two; $77,460 for three; $93,600 for four; $109,740 for five; $125,880 for six; $142,020 for seven, and $158,160 for eight.

How money can be used

Though the program provides up to $25,000 in down payment assistance, those who qualify can also use the money for other expenses, including escrow deposits for property taxes, interest rate buy-downs, closing costs and a reduction in the principal, according to a news release.

How to apply

For more information, go to www.detroitdpa.org.

• Find a lender to get pre-qualified for a mortgage.

• Identify a home and sign a purchase agreement. Homes must be located in Detroit.

• Take a homebuyer education class.

• Apply to the down payment assistance program by going to www.detroitdpa.org or by calling the Detroit Housing Resource Helpline at 866-313-2520 (select option 3 after the language prompt).

Contact Nushrat Rahman: [email protected]. Follow her on X, formerly known as Twitter: @NushratR.

This article originally appeared on Detroit Free Press: Detroiters could get up to $25K to help buy a home. How to apply.