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Frequently Asked Questions

What is the mortgage product and how does it work?

The Home Restoration and Acquisition Program is designed for the acquisition or renovation of owner occupied homes in the City of Detroit. With a Home Restoration and Acquisition loan, a borrower can pay interest-only during the construction or renovation phase, after which the loan will convert to a permanent mortgage based on the final value of the home. This includes the Detroit Land Bank online auction. When an individual is the winning bidder through the auction, they have 24 hours to put down 10% of the winning bid. They then have 60 to 90 days to close, and 6 months to complete any necessary repairs or 9 months for homes located in designated historic neighborhoods.

But wait, aren't interest only loans bad?

The interest only loans are for homes that are being purchased and renovated. We wouldn't normally recommend interest only loans for most families, but in this case it works. Because the homes 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 Liberty Bank at (313) 818-0232 or complete the information section on our website. One of our representatives will call you to answer questions and start the application process with you. Additionally, any one of the three housing counseling organizations where you live currently or in the neighborhood where you intend to move will assist you. The banking representative or counselor will provide an overview of the program and help potential borrowers determine the amount of loan they can afford.

How do I apply for downpayment assistance?

Down payment assistance of up to $15,000 is available to homebuyers who qualify. If the purchase is from the City of Detroit Land Bank auction homebuyers are required to put 10% down on their winning auction bid. The purpose of the assistance is to bridge a gap between the cost of repairs and the appraised value of the home. Detroit Public School employees may qualify for up to $20,000 in down-payment assistance.

Why is housing counseling required?

The Home Restoration and Acquisition 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 more likely to understand their mortgage responsibilities.

If I want to buy a house that is not an auction home, can I apply for the program?

Yes, If you are purchasing a home in one of the neighborhoods that includes the North End, Boston Edison, Jefferson Chalmers, Southwest, Grandmont Rosedale, University District, Marygrove, Bagley , Morningside, East English Village and Cornerstone neighborhoods. Additionally, we provide mortgages that are not part of Home Restoration and Acquisition Program.

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.

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