Detroit mortgage program aims to boost home ownership in the city


PLEA WAS ENTERED ON HIS MAF FOR ATTACKING PERRY ULMER. TWO OTHERS REMAIN ON THE RUN. A GAME-CHANGER, A PROGRAM AIMED AT BUYING A HOME IN THE CITY OF DETROIT EASIER. Devin: THEY WOULD QUALIFY FOR A MORTGAGE IN THE SUBURB BUT DENIED IN DETROIT BECAUSE OF REGULATORY HURDLES. GUY GORDON HAS THAT STORY AND IS WITH US LIVE. THEY’RE TELLING US THIS COULD TRIPLE THE NUMBER OF MORTGAGES IN DETROIT. Guy: I DON’T THINK GAME-CHANGER IS AN OVERSTATEMENT. THIS IS HUGE PROBLEM. LAST YEAR, HOME SALES ONLY 10% HAD A MORTGAGE, IT IS STRANGLING THE MARKET. AND THAT’S WHY-THE HOMES ARE FILLED WITH PEOPLE PAYING RENT INSTEAD OF PAYING TOWARD THEIR FUTURE. TURNED DOWN AT LEAST FIVE TIMES. Guy: HE WAS CAUGHT IN A CATCH-22. HIS INCOME AND CREDIT SCORE MET ELIGIBILITY STANDARDS BUT THE MORTGAGE FELL THROUGH. THE PROPERTY VALUE WASN’T THERE. Guy: HOW FRUSTRATING WAS THAT? VERY, BECAUSE THERE’S NO SUBSTITUTE FOR THE VALUE. Guy: IT’S A PROBLEM WITH DEPRESSED APPRAISALS. IF A HOME IS PRICED AT $80,000 BUT APPRAISED FOR 60, IT’S AUTOMATICALLY DENIED. WITH DETROIT HOME MORTGAGE, YOU WOULD GET TWO LOANS, ONE FOR THE APPRAISED VALUE WITH 3.5% DOWN AND THEN ANOTHER ONE FOR UP TO $75,000 TO FILL THE GAP BETWEEN THE PRICE AND APPRAISAL AND ANY COST OF RENOVATION. WITH THIS PROGRAM, WE’LL BE ABLE TO MAKE A THOUSAND MORTGAGES THAT WOULD NOT HAVE BEEN MADE BEFORE. Guy: BANKS AND FOUNDATIONS ARE PUTTING UP A $40 MILLION FUND. THEY’RE MARKET RATE AND APPLICANTS MUST HAVE A MINIMUM 630 CREDIT SCORE. FORD IS THE FIRST SUCCESSFUL APPLICANT AND EXPECTS TO CLOSE ON HIS NEW HOME THIS WEEK. I’M EXCITED ABOUT WHAT IT DOES FOR ME AND THE CITY. Guy: HERE ARE THE PARTICIPATING BANKS: FIRST MERIT, TALMER, LIBERTY BANK, FLAG STAR AND HUNTINGTON. YOU CAN APPLY THERE OR GO TO DETROITHOMEMORTGAGE DOT CORRESPONDING. WE HAVE MORE AT CLICKONDETROIT.COM. HOPEFULLY WE’LL SEE MORE “SOLD” SIGNS HERE. GUY GORDON, LOCAL 4. Devin: I THINK SOME PEOPLE WOULD SAY IF THE APPRAISAL PRICE IS LOWER THAN THE PURCHASE PRICE, THEN IT’S NOT BUYER’S ABILITY TO QUALIFY THAT’S THE ISSUE, IT’S A MARKET ISSUE. Guy: IT REALLY S BUT THEY’LL FILL THE GAP WITH THIS NEW FUNDING MECHANISM AND THAT GAP WILL CLOTHES OVER TIMES AS YOU HAVE NEW COMPS TO PREAAPPRAISE THE PROPERTIES. Devin: THE CLINTON FOUNDATION IS A PARTICIPANT, RIGHT? Guy: WE THOUGHT THAT THE FORMER PRESIDENT MIGHT BE HERE WITH THE ANNOUNCEMENT BUT PROBABLY HAD MORE PRESSING MATTERS WITH HIS WIFE IN NEVADA. THEY GOT THE LENDERS TO JOIN MAYOR MIKE DUGGAN AND HE LOCKED THEM IN A ROOM FOR TWO DAYS

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