If you are looking to purchase a home in the Detroit area, then you know how difficult it can be to obtain a home mortgage. There are a number of reasons for that, but its primarily because of the fact that many of the homes in the area are priced at higher than their appraised values.
According to the Detroit Free Press, this new program will help homebuyers in the area by offering the lending banks guarantees from the Ford and Kresge Foundations, which give the banks some insurance that they will not lose their investment should the homeowner default.
The problem for banks is in the fact that many of the homes in the Detroit area have still not recovered from the recession of 2008 and the subprime mortgage crisis. As a result of this, many homes might sell for $75,000 when they were once worth twice that. Moreover, the situation is even more complicated when an appraiser says that the home is only worth $50,000 because of Detroit’s foreclosure crisis. Thus, until this program came along, banks would decline to write a mortgage for the home.
The new program, which is called Detroit Home Mortgage, is available at five banks within the Detroit area. Qualified borrowers also have the option to get a second mortgage to cover the difference between the selling price and the appraised value.
Aira McDonald is a seasoned journalist with nearly 15 years experience. While studying journalism at the University of Detroit,, Aira found a passion for finding engaging stories. As a contributor to PR News Globe, Aira mostly covers human interest pieces.