JPMorgan Chase (JPM) has partnered with Liberty Bank in Detroit to offer financing to homebuyers interested in restoration of the city's run-down properties.
The program enables qualified buyers to bid for residential properties through a Detroit Land Bank Authority auction and other neighborhood initiatives, JPMorgan said in a press release Thursday.
Since many local buyers of blighted properties lack access to conventional home improvement loans or other resources, funding for the program will be used "to work with local community partners supporting economic development, blight reduction, work force development and small-business growth," the release says.
The JPMorgan Chase Foundation will provide $5.5 million to Liberty Foundation, Liberty Bank's nonprofit community development bank, which helps Detroit residents purchase and rehab blighted properties. The $600 million-asset Liberty, which focuses on underserved communities, entered the Detroit market in 2009.
The program will help establish a $5 million loan-loss reserve fund for Liberty Bank that is expected to generate up to $20 million in affordable new rehab residential mortgage loans. Up to $300,000 will be placed in a down-payment assistance fund, also managed by Liberty Bank, to offer assistance of up to $10,000 per loan.
The Home Restoration Program is scheduled to be introduced at an auction sale on July 28. To qualify, borrowers must be Detroit residents, occupy the home as their primary residence, participate in housing counseling, demonstrate an ability to repay the loan and comply with all auction rules. Down-payment assistance is offered to households with income at or below 120% of the area's median income of approximately $32,000.
"By making these rehab loans available and accessible to winning bidders, it will greatly increase their ability to follow through on our requirement to have the home fixed up and occupied within six months," Detroit Mayor Mike Duggan said in the release.