Success for Detroit’s Downpayment Assistance: Over 300 Homeowners and Counting, with a Second Round in 2024
The City of Detroit’s Downpayment Assistance Program (DPA) has successfully enabled over 300 Detroiters to become first-time homeowners through its first round, which concluded on December 4, as announced by city officials. Additionally, 76 approved applicants from Round 1 are currently in the final stages of closing on their new homes.
Looking ahead, Round 2 of the DPA is set to launch in early 2024. In the interim, the city continues to process additional applications received, utilizing the remaining funds from Round 1. Prospective homebuyers in Detroit are encouraged to visit www.detroitdpa.org for detailed information about the upcoming Round 2.
Mayor Mike Duggan introduced the DPA program in March 2023, aiming to assist approximately 450 individuals with up to $25,000 each in downpayment assistance for home purchases. This initiative, funded with $12 million from President Biden’s American Rescue Plan Act (ARPA), targets low- and moderate-income earners who can afford monthly mortgage payments but lack sufficient savings for a downpayment.
The program’s overwhelming response led the Detroit City Council to approve two amendments, effectively doubling the initial $6 million allocation to a total of $12.25 million for Round 1. This increase in funding underscores the program’s success and the city’s commitment to facilitating homeownership.
Key achievements of Round 1 include:
- Receipt of nearly 500 applications.
- Approval of 385 applications, with 314 successfully closed.
- 93% of recipients are African American.
- All participants have resided in Detroit for at least a year.
- An average funding amount of $24,400 per applicant.
- The average purchase price of homes at $116,000.
- The average household income of participants at $47,810.
- An average mortgage payment of $912 for participants.
Mayor Duggan highlighted the program’s role in enabling renters to transition to homeownership, thereby gaining financial security and stability. The program also contributes to neighborhood strengthening, as noted by Housing and Revitalization Department Director Julie Schneider.
The program’s implementation is managed by National Faith Homebuyers, a Detroit-based nonprofit with a long history of assisting residents in homeownership, including down-payment assistance and financial literacy programs. Dina Harris, the founder and president of National Faith Homebuyers, expressed her satisfaction with the program’s impact on Detroit families.
The Ownership Initiative, a Black-owned impact advisory firm in Detroit, played a crucial role in designing the program. Krysta Pate, the CEO, emphasized the collaborative effort in making homeownership a reality for many Detroiters, reflecting the power of united efforts for community betterment.
As 2023 funding concludes, interested homebuyers looking forward to 2024 can take proactive steps:
- Enroll in homebuyer education classes, with resources available through the Detroit Housing Network.
- Engage in financial coaching at the Detroit Financial Empowerment Center for credit improvement, debt reduction, and savings enhancement.
- Consult with lenders to establish a home-buying budget and understand the preapproval process.
- Collaborate with realtors to identify properties and prepare for offers when the DPA reopens in 2024.
Comprehensive resources, including education courses, participating lenders, and more, are available at www.detroitdpa.org, offering a roadmap for Detroiters to achieve their dream of homeownership in the upcoming round of the program.