The program, Detroit Home Mortgage was unveiled today. It was created with the support of the Obama Administration’s Detroit Federal Working Group and the Clinton Global Initiative and is designed to work with local banks, foundations and nonprofits.
Under the program banks will now be able to lend qualified homebuyers enough to purchase a renovated home or buy and rehabilitate a home anywhere in Detroit.
Before this program was put into place it was not clear, if banks could lend enough money to cover repairs, because the amount that could be loaned was connected to the value of the home.
Under the program, buyers will receive a first mortgage for the appraised value of their house and a second mortgage of up to $75,000 to fill in the gap between the appraised value and the sale price and/or the cost of any renovations.