CRF leads development of game-changing Detroit Home Mortgage, aimed at increasing homeownership and reinvestment in Detroit’s neighborhoods

DETROIT –  Community Reinvestment Fund, USA (CRF) led the development of an innovative new program to make Detroit home buying easier, collaborating with Detroit Mayor Mike Duggan, the Obama Administration’s Detroit Federal Working Group, Clinton Global Initiative, local banks, foundations and nonprofits. The result – Detroit Home Mortgage – was unveiled today: a new mortgage program to help solve Detroit’s appraisal gap problem.

“This new mortgage program will give more people in Detroit access to the American dream of owning a home.” said Frank Altman, President and CEO of CRF. “It will help rebuild neighborhoods and strengthen communities.”

Banks will now be able to lend qualified homebuyers the full amount needed to purchase a renovated home, or to buy and rehabilitate homes anywhere in the city of Detroit, added Duggan.

Previously, federal lending guidelines did not clearly allow banks to loan borrowers enough money to cover necessary repairs because the loan amount was limited to the low, appraised value of a house. Many potential homebuyers have good credit scores and stable incomes, but could not get a large enough mortgage because the appraiser could not find a similar home nearby with a comparable sales price. Houses across Detroit remain inexpensive to purchase relative to homes just outside the city limits, but the lack of financing forced many families either to pay cash or to rent instead of building equity and investing in their futures. Some homebuyers use expensive credit card debt to pay for renovations, or do the renovations piecemeal over several years.

“This is a game-changer for Detroit,” said Duggan. “With an opportunity to get a home mortgage, qualifying homeowners and homebuyers have a real opportunity to buy and renovate a house in the city and make it a home.”

The collaboration of Huntington Bank, Flagstar Bank, Talmer Bank and Trust, FirstMerit Bank, Liberty Bank, the Ford Foundation, The Kresge Foundation, and the Michigan State Housing Development Authority was spurred into action by two days of visionary discussions at the Clinton Global Initiative (CGI) America meeting last summer, Duggan explained, and has been announced as a new CGI Commitment to Action.

“This program would not have been possible without the support of our generous investors, including the participating banks, the Ford Foundation, the Kresge
Foundation and the Michigan State Housing Development Authority,” said Altman.

The Ford Foundation made a $400,000 grant and Kresge a $475,000 grant to support the start-up operations of the fund. The Michigan State Housing Development Authority has committed $1.5 million for the first year and will look at additional funding of up to a total of $6 million in the future.

With Detroit Home Mortgage, qualifying borrowers receive a first mortgage for the appraised value of their house (less their 3.5 percent down payment), and a second mortgage up to $75,000 to fill the gap between the appraised value and the sale price and/or the cost of renovations. The program aims to increase homeownership, property values and reinvestment in any Detroit neighborhood where the appraisal gap exists.

All participating banks will offer Detroit Home Mortgages at the same low interest rates with no bank fees. Like all loans, Detroit Home Mortgages must be repaid. However, The Kresge Foundation will provide a $6 million guarantee on the second mortgage pool to protect borrowers in extreme cases of hardship that require a homeowner to sell his or her home.

Detroit Home Mortgage borrowers must complete classes in homebuyer education and the financial risks involved in borrowing more than the appraised value of a home. Several counseling agencies that will offer Detroit Home Mortgage education classes, including Southwest Economic Solutions, U-SNAP-BAC, National Faith Homebuyers, Central Detorit Christian and other HUD- or MSHDA-approved agencies.

Those interested in applying for a Detroit Home Mortgage can learn more at, or by visiting one of the initiative’s participating banks.


Clinton Foundation President Donna Shalala
“Once the Mayor challenged the Clinton Global Initiative to find a solution to the appraisal and financing gap, we got to work the best way we know: by bringing diverse partners to the table,” said Clinton Foundation President Donna Shalala. “Beginning at the CGI America meeting in Denver last June, where we gathered representatives of nearly 20 organizations to workshop the idea, today’s CGI Commitment to Action is the result of their continued efforts and commitment to finding a breakthrough solution for improving lives and communities in Detroit.”

Detroit Mayor Mike Duggan
Mayor Duggan noted the role of CGI and the Obama Administration’s Detroit Federal Working Group in convening the private sector, philanthropy and government. The Working Group includes dedicated staff from the White House Office of Management and Budget, the Department of Labor, the Environmental Protection Agency and the

State Department. “I credit the Obama Administration and CGI with convening the parties, generating new ideas and supporting the effort to bring this resource to Detroit.”

Michigan Governor Rick Snyder
“The Detroit Home Mortgage program is another example of what happens when the private and public sectors come together to help Michiganders,” Governor Rick Snyder said. “I commend Mayor Duggan and all of the partners involved in this effort that will help Detroit’s neighborhoods thrive.”

White House Office of Management and Budget Director, Shaun Donovan
Shaun Donovan of the White House Office of Management and Budget noted, “Detroit Home Mortgage shows what is possible when the Federal government partners closely with communities to cut through barriers and help people on the ground solve problems. Today’s announcement marks an important step in the ongoing effort of local leaders,
the private sector, and the people of Detroit to revitalize their city, an effort the Obama Administration has strongly supported.”

Kresge Foundation President and CEO, Rip Rapson
“Collectively, The Kresge Foundation guarantee commitment and MSHDA’s affordability grant allow the banking institutions to lend significantly more money than they would otherwise,” said Kresge President and CEO Rip Rapson. “Kresge has expanded its use of social investments – loans, guarantees and equity investments – to complement traditional grantmaking. This new mortgage program is an excellent example of how philanthropy can partner with public and private sector investors to unlock capital and move more resources to underserved communities.”

President of Detroit Association of Realtors, Kamal Cheeks
“The local real estate community knows how challenging it is to help buyers get the financing they need for a house in Detroit,” said Kamal Cheeks, president of the Detroit Association of Realtors. “Detroit Home Mortgage will give those qualified buyers a chance they haven’t had before – and that’s good for all of us.”

Huntington Bank chairman, president and CEO, Steve Steinour
“This is a creative solution to revitalize Detroit’s neighborhoods,” said Steve Steinour, chairman, president and CEO of Huntington Bank. “By partnering with the city, local banks are joining together to offer loans that resolve the challenge of making homes livable by funding both purchase and necessary repairs, without the problem of financing exceeding the home’s worth. Our regulators, including the OCC, are also playing an important role ensuring that this type of credit is available to Detroit homebuyers. We at Huntington and our bank peers are eager to help start the ball rolling to meet pent-up buyer demand placing viable vacant homes back into the hands of responsible homeowners.”

Talmer Bancorp Chairman, Gary Torgow
“Talmer Bank recognizes that neighborhoods come in many shapes and forms and that Detroiters deserve a fair shot at buying and reinvesting in a home,” said Gary Torgow, chairman of Talmer Bancorp. “As we worked on this concept, we recognized the urgency to pool resources to come up with a new approach. I believe Detroit Home Mortgage can
accelerate the City’s renaissance because it gives Detroiters the financing they have long needed to rebuild our communities.”

Flagstar Bank CEO, Sandro DiNello
“Detroit Home Mortgage represents a remarkable coalition of people and organizations with a vested interest in a healthy housing market in Detroit,” said Sandro DiNello, CEO of Flagstar Bank. “Flagstar is pleased to bring its extensive experience in home lending to the table and pleased to work with our partners to create more homeowners in Detroit.”

Southwest Economic Solutions executive director, Hector Hernandez
“We will provide education to qualifying borrowers who would like to buy and renovate a home in Detroit,” said Hector Hernandez, executive director of Southwest Economic Solutions, a homebuyer counseling agency. “Detroit Home Mortgage is for borrowers who want a long-term investment in Detroit’s future and their future.”


About Community Reinvestment Fund, USA (CRF)
CRF, a national non-profit community development financial institution (CDFI), is a leader in bringing capital to underserved areas. Since 1988, CRF has injected more than $2 billion into communities in 48 states around the country to provide affordable housing, help stimulate job creation and economic development, and support community facilities. Learn more at

About Clinton Global Initiative (CGI) America
Clinton Global Initiative (CGI) America brings together leaders from the business, philanthropic, nonprofit, and government sectors to develop solutions that encourage economic growth, support long-term competitiveness, and increase social mobility in the United States.

CGI America’s annual convening is designed to be a working meeting that promotes collaboration. Each CGI America participant makes a Commitment to Action: a new, specific, and measurable plan that supports increased economic growth and opportunity. Since the first meeting in 2011, CGI America participants have made more than 500 Commitments to Action, which have already improved the lives of nearly 2.4 million people.

About The Kresge Foundation
The Kresge Foundation is a $3.5 billion private, national foundation that works to expand opportunities in America’s cities through grantmaking and social investing in arts and culture, education, environment, health, human services, and community development in Detroit. In 2014, the Board of Trustees approved 408 awards totaling $242.5 million. That included a $100 million award to the Foundation for Detroit’s Future, a fund created to soften the impact of the city’s bankruptcy on pensioners and safeguard cultural assets at the Detroit Institute of Arts. A total of $138.1 million was paid out to grantees over the course of the year. In addition, our Social Investment Practice made commitments totaling $20.4 million.

About the Obama Administration’s Detroit Federal Working Group (DFWG)
Since 2011, the Obama Administration has embedded full-time Federal staff with Detroit to provide capacity and technical assistance. The DFWG works directly with city leaders, local business, philanthropy, neighborhood and community leaders to identify federal resources, cut through red tape, and co-develop solutions. This robust on-the-ground engagement has yielded impressive results in:

  • Significant Progress Toward Blight Elimination
  • Going from Half the City in the Dark to High-Efficiency Lighting Everywhere
  • Supporting Workforce Training for Young People, the Long-term Unemployed, and the Formerly Incarcerated
  • Meeting Detroit’s Full Bus Schedule for the First Time in Decades
  • Innovative TIGER Grants to Support a Regional Transit Authority and M-1 Rail
  • Supporting Expanded Affordable Housing
  • Investing in Green Infrastructure That Prevents Flooding
  • Developing a Comprehensive Plan for Spurring Manufacturing
  • Bolstering Economic Development
  • Strengthening Global Engagement
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