The house in Rosedale Park had been vacant for a year and needed work, but Marcie Kansou had a strong intuition the moment she walked in.
“It felt like home and I knew this was the place I should be,” she said.
Marcie closed on the home at the end of June. In so doing, she became the first person to purchase a home through Detroit Home Mortgage. Marcie works at Southwest Solutions, supervising our infant mental health program.
Detroit Home Mortgage was announced in late February to address the “appraisal gap” in the city. It enables a homebuyer to secure a mortgage from a participating bank for the full amount to buy and fix up a home, even when the appraised value falls short. Marcie worked with Huntington Bank.
“Without a doubt, if not for Detroit Home Mortgage, Marcie would not have been able to get the financing for this home,” said Scott Gutschow, the Huntington loan officer who helped Marcie.
Detroit Home Mortgage allows the homebuyer to get a first mortgage for the appraised value minus the 3.5% down payment, and then get a second mortgage for the additional money needed for the purchase price (if it exceeds the appraised value) and renovation.
Marcie purchased the house for $53,000, but it needed $40,000 of rehab work. The house appraised for $75,000. After her down payment, she got a first mortgage for $72,000 (20-year fixed at 3%) and a second mortgage (20-year fixed at 5%) to cover the rest of the renovation costs. Marcie was also able to roll in her closing costs, first year payments of property taxes and insurance, and other expenses. She also does not have to pay PMI (private mortgage insurance).
“I feel that I got a great deal,” Marcie said. “I was renting before. Now I have a place that I can truly call and make my own, where I can bring family together and continue traditions that actually began in this neighborhood.”
Marcie grew up in Rosedale Park, in a home a few streets away from the one she bought. The family moved out when she was a teenager because of crime and other issues. Because of this past experience, Marcie had security concerns and talked to immediate neighbors before her purchase. They assured her that the area was safe and the neighbors look out for each other. The home Marcie bought is the last vacant house on the block.
Marcie feels a deep sense of nostalgic comfort moving back in the neighborhood. She appreciates houses with historical character and can tell that the home she bought was loved by the previous occupants because of the amenities and careful touches.
The house does need some major electrical and plumbing work, however. This and other remodeling work may take two months, and Marcie expects that it will be late September before she moves in.
To qualify for Detroit Home Mortgage, Marcie needed to complete a homebuyer education workshop and a high combined loan-to-value (CLTV) training. She did both of those sessions at Southwest Solutions. Homebuyer counselor Teresa Torres guided Marcie through the CLTV portion. In addition, Marcie completed a home restoration course and hired a project manager to determine construction needs and monitor the work. The project manager is Adam Helfman, founder of Hire it Done and a nationally known home improvement expert.
“There are a lot of moving pieces when you’re going through the Detroit Home Mortgage process, but, ultimately, it’s worth it,” said Marcie.