JP Morgan Chase is funding a program with Liberty Bank that offers low-interest loans and down-payment assistance up to $10,000 to encourage eligible homebuyers to rehabilitate and reside in homes in Detroit neighborhoods bought at city auction.
The initiative is called the Home Restoration Program, and it pertains specifically to houses bought through the Detroit Land Bank Authority’s (DLBA) Neighbors Wanted property auction of vacant city-owned homes. The program is a part of JPMorgan Chase’s commitment to invest $100M toward the city’s economic recovery. It was announced at a press event in Detroit on July 10.
“Revitalizing Detroit’s neighborhoods is a critical priority for the city’s recovery, and we believe the Home Restoration Program will support the auction and accelerate the turnaround underway in key neighborhoods,” Peter Scher, Executive Vice President and Head of Corporate Responsibility, JPMorgan Chase.
The program helps address a critical issue impairing homeownership in Detroit neighborhoods where homebuyers purchasing blighted properties do not have access to financing to make necessary repairs, and depressed property values also make it difficult for buyers to secure conventional home loans.
“The only way the city comes back is if people can afford to buy homes,” said Mayor Mike Duggan at the press conference. “By making these rehab loans available and accessible to winning bidders, it will greatly increase their ability to follow through on our requirement to have the home fixed up and occupied within six months. Each home that gets renovated will further strengthen our neighborhoods.”
To fund the program, JPMorgan Chase is providing $5.5M to Liberty Bank, a leading African American-owned financial institution with considerable home-lending expertise in distressed urban neighborhoods. The grant will create a $5 million loan loss reserve fund for Liberty Bank, enabling it to provide up to $20 million in new rehab residential mortgage loans and offer flexible terms to eligible borrowers who purchase a home through the Neighbors Wanted property auction.
Funding from the JPMorgan Chase will also create a $300,000 down-payment assistance fund managed by Liberty Bank that will offer eligible Detroit residents up to $10,000 in down-payment assistance.
“We are certain this program will help those who want to renovate their homes, obtain mortgages in Detroit and contribute towards the growth of this amazing city,” said Drextel Amy, President of the Michigan Region, Liberty Bank and Trust Company.
To implement the program, JPMorgan Chase is also working with three nonprofit, community-based agencies that will provide pre-purchase counseling to eligible homebuyers so they can qualify for the program. The agencies are: Central Detroit Christian Community Development Corporation, Southwest Solutions, and U-SNAP-BAC Community Development Corporation.
“The Home Restoration Program will fill a critical gap for Detroit families by providing a unique and flexible financing product for potential homebuyers,” said Linda Smith, Executive Director of U-SNAP-BAC. “By requiring participation in housing counseling, we can work together to ensure that families have the tools needed to prepare for the financial responsibilities that come with homeownership.”
“This program is a great example of JPMorgan Chase listening to community-based agencies, learning from their experience and expertise, and then connecting resources and partners to address challenges to increasing homeownership in our neighborhoods,” said Hector Hernandez, Executive Director of Southwest Economic Solutions.
To qualify for the Home Restoration Program, borrowers must:
- Occupy the home as their primary residence
- Be a current Detroit resident
- Participate in housing counseling
- Demonstrate an ability to repay the loan and comply with all auction rules
To be eligible for down-payment assistance, households must meet these criteria and have an income at or below 120 percent of the area median income (AMI). Liberty Bank is offering flexibility on credit scores needed for financing, and scores as low as 600 may qualify. Mortgages may be underwritten for as little as 3 to 4% down.
Interested Detroit residents can learn more about eligibility by visiting Liberty Bank’s branch in Detroit at 9108 Woodward Avenue or by calling 313-873-3311.