Frequently Asked QuestionsWhat is the mortgage product and how does it work?
The Home Restoration Loan program is designed for the unique needs of the Neighbors Wanted auction. When an individual wins the bid, they have twenty 24 to put 10% of the winning bid amount down. Then they have 60 to 90 days to close, and six months to complete any necessary repairs. With a Home Restoration loan, a borrower can pay interest- only during the six month construction/rehab phase, after which the loan will convert to a permanent mortgage based on the final value of the home.Are interest-only loans bad?
We wouldn't normally recommend interest-only loans for most families. But in this case it works. Because the homes being auctioned are in need of repair, a family may not be able to move in right away. By paying interest only for the months the home is undergoing repair, a family can avoid paying for two homes at once.Where do I start? How do I apply?
Interested borrowers should begin by calling one of the three housing counseling organizations. They can call the organization close to where they live currently or in the neighborhood where they intend to move. The housing counselor will provide an overview of the program, and will help potential the borrowers determine whether they are ready to become homeowners and how much home they can afford. Based on that information, the counselor will then provide guidance on whether the Home Restoration Program is a good fit for the borrower's needs.How do I apply for downpayment assistance?
Downpayment assistance is available to Detroit residents who meet all the criteria for the loan and earn less than 120% of area median income. Homebuyers will still be required to put 10% down on their winning auction bid. Downpayment assistance will be available to eligible borrowers when they transition to a permanent mortgage after the home repairs are complete. The purpose of the assistance is to bridge a gap between the cost of repairs and the appraised value of the home. Borrowers are eligible for up to $10,000, as needed to bring the Loan to Value ratio down to 96%.Why is housing counseling required?
The Home Restoration Program is a non-traditional mortgage and it is critical that homebuyers understand the product they are getting. Housing counseling is an important resource to ensure the borrower is well prepared to take on the risks and rewards of homeownership. Research shows that families that receive housing counseling are less likely to default on their mortgage in the future.When will the program be available in other neighborhoods?
The Home Restoration Program will be tested in the Boston Edison and East English Village neighborhoods. Once the partners know they have the systems fully operational, the program will expand to Southwest.I saw JPMC's name associated with the program. How are they involved?
JPMorgan Chase Foundation made a charitable contribution to all of the nonprofit partners involved, including Liberty Bank, Detroit Land Bank Authority, Central Detroit Christian, Southwest Economic Solutions, and U-SNAP-BAC. JPMorgan Chase Foundation is working in close collaboration with the partners to ensure the program's success.