Own Sweet Own: Detroit Home Mortgage

Thanks to funding support from the Kresge Foundation, the Ford Foundation, Michigan State Housing Development Authority and Huntington, FirstMerit, Flagstar, Talmer and Liberty Banks, CRF was able to launch Detroit Home Mortgage. Read below to find out how it will help increase home ownership in the city of Detroit

The Problem
While there were a significant number of vacant and inexpensive homes in the city of Detroit, buying a home had one major road block – getting a mortgage large enough to fix up the home. Often the buyer qualified for a loan, but the home did not because its appraised value was too low.

In 2014, 88% of homebuyers in the city of Detroit paid cash and approximately 80% of applications were denied for conventional and FHA-backed home improvement loans. 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 had 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. The lack of financing forced many families either to pay cash or to rent instead of building equity and investing in their futures.

The Solution
At the urging of Detroit Mayor Mike Duggan, a diverse group of partners including the Obama Administration’s Detroit Federal Working Group, Clinton Global Initiative, local banks, foundations and non-profits joined forces to find a solution to the appraisal and financing gap. Led by Community Reinvestment Fund, USA, (CRF) who is now administering the fund, a group of partners developed this innovative new program that aims to increase homeownership and reinvestment in Detroit’s neighborhoods.

Detroit Home Mortgage addresses the appraisal value gap associated with the renovation of properties by combining a second mortgage with a conventional first mortgage to assist in the funding of rehabilitated single family properties. The end goal is to increase the number of mortgages, eventually bringing back the conventional mortgage market and making Detroit Home Mortgage unnecessary.

It was a Collaborative Effort

Thanks to all of our partners. The development of Detroit Home Mortgage wouldn’t have happened without you!

Detroit Mayor Mike Duggan

Clinton Global Initiative

The Obama Administration’s Detroit Federal Working Group

Huntington Bank

Flagstar Bank

Talmer Bank and Trust

FirstMerit Bank

Liberty Bank

The Kresge Foundation

The Ford Foundation

Michigan State Housing Development Authority

Southwest Economic Solutions


Krysta Pate Leads Detroit Home Mortgage
Community development expert Krysta Pate is the Program Director for Detroit Home Mortgage, working out of CRF’s office in the historic Ford Building in downtown Detroit.

Krysta comes to Detroit Home Mortgage from the Detroit Land Bank Authority where she worked closely with community partners, banks, homebuyer counseling agencies, realtors and government agencies. She is also a member of the national task force charged with improving mortgage conditions in Detroit.

“I have spent my entire career working to strengthen neighborhoods and create housing solutions for families,” said Krysta. “It’s great to see banks, government officials, nonprofits, and realtors collaborate in this groundbreaking and important step towards a real solution for the Detroit real estate market.”

Krysta can be reached at Krysta@crfusa.com or 313.335.4038

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