Michigan launches pilot mortgage program to expand Detroit homeownership

The Michigan State Housing Development Authority (MSHDA) announced on Thursday that it is partnering with the Tobias Harris Homeownership Initiative, Guild Mortgage and Homium on a pilot shared-appreciation mortgage program aimed at expanding access to homeownership in Detroit.

The effort is backed by Detroit Pistons basketball player Tobias Harris. The mortgage product will provide qualified borrowers with up to 40% of a home’s purchase price in down payment assistance (DPA) without adding monthly debt.

Borrowers can secure a conforming first mortgage without mortgage insurance, lowering monthly payments. The assistance is repaid, along with a share of market appreciation, when the home is sold or refinanced.

“This new partnership will help make the dream of homeownership a reality for more Detroiters, offering the kind of affordable support that leads to long-term housing stability,” said Amy Hovey, CEO and executive director of MSHDA. “We’re moving quickly to identify new partners and programs that can help lower costs and unlock opportunities for Michigan families.”

Initial funding comes from MSHDA and philanthropic contributions from Harris, former Pistons teammate Jon Leuer, Pistons owner Tom Gores and others, directed through the nonprofit Realize Impact.

“Homeownership is one of the most powerful ways to build stability and generational wealth,” Harris said in a statement. “With this initiative, I’m focused on expanding access to homeownership so Detroiters can plant roots and build equity in the city they call home. This is just the start, and I look forward to working with others throughout Detroit’s business and philanthropic community to grow and sustain this important program.”

Housing data highlights the challenge. Since 2013, Michigan’s median household income has risen 36%, while the state’s home sales price index has jumped 101%. In Detroit, nearly 60% of households spend more than 30% of their income on rent.

“We are proud of this partnership and excited to offer Guild customers another opportunity to overcome financial obstacles to homeownership,” said David Battany, executive vice president of capital markets at Guild Mortgage. “This is another example of how innovation in mortgage lending can bring owning a home within reach to more first-time homebuyers.”

The pilot is available to qualified first-time buyers in select Detroit neighborhoods. Partners said they will evaluate results before considering expansion to other markets.

“The people of Detroit deserve a fair shot at building middle-class economic and housing security for their families,” Homium CEO Marcus Martin said. “Programs like the Tobias Harris Homeownership Initiative and partners like Guild are what make it possible for fair and transparent products like Homium to enter the market, and we’re just getting started.”