Detroit Home Loss Prevention Program Reaches 85% Homeownership Four Years Later – Poverty Solutions | Vette Leader

Contact: Lauren Slagter, lslag@umich.edu734-929-8027

DETROIT – A 2017 program to prevent homelessness and encourage homeownership in Detroit helped, according to a. 85% of participants maintain their home ownership for four years new assessment by the University of Michigan.

The analysis also provides homeownership recommendations for more low-income households. Owners can realize the wealth-building benefits and other benefits of home ownership after at least five years of ownership.

Since its inception, the Make It Home program has helped nearly 1,200 Detroit households avoid homelessness by giving them the opportunity to purchase homes where they live. Participants in the program lived in properties affected by a tax enforcement, meaning the owner of the property had not paid property tax for at least three years.

The UM analysis focused on the first year of the program’s implementation, when the city of Detroit used the right of first refusal to help 80 Detroit renters purchase their homes who had entered foreclosure through no fault of the tenants. The City of Detroit used donated funds from the Rocket Community Fund (formerly Quicken Loans Community Fund) to purchase tax-foreclosed homes from the Wayne County Treasurer and transferred them to the United Community Housing Coalition (UCHC).

UCHC then sold the properties to tenants with foreclosed deeds or land leases at 0% interest, an alternative to mortgage lending that allows prospective buyers to make monthly home ownership payments.

Related: The new land purchaser’s guide supports Detroit residents on their home ownership journey

By the end of the program’s first year, 81% of the first 80 participants in Make It Home fully owned their homes or continued to hold a land contract. In the four years following the property’s 2017 foreclosure, Make It Home resulted in permanent home ownership for 85% of participants. The average household size for the first group of Make It Home participants was three people, and 89% of the participants made less than $37,080 per year.

“The Make It Home program had two main goals: to prevent renters from losing their homes in a landlord’s tax enforcement crisis, and to help them maintain their home ownership. Our evaluation found that the program met these goals for 85% of its first group of participants,” said Margaret Dewar, Professor Emeritus of Urban and Regional Planning at UM and co-author of the Make It Home program evaluation.

To compare the results of Make It Home participants, the researchers also examined the results of 154 households with similar characteristics that UCHC attempted to purchase in the 2017 county tax auction. In this group, four years later, only 27.2% remained home-owned, including the majority of the 34 households that UCHC helped secure homes through the auction, as well as some households that regained their homes without UCHC’s assistance.

Of the 154 households that UCHC attempted to serve outside of the Make It Home program, 109 of their homes were auctioned off and 15% of those tenants were evicted within the next four years.

“It was the renters who didn’t have a route to home ownership that saw the greatest instability. The study underscores the importance of affordability and good condition housing to promote resiliency for people on low incomes,” said Roshanak Mehdipanah, associate professor of health behavior and health education at UM’s School of Public Health and co-author of the Make It Home -Valuation.

Related: 9 out of 10 Detroit eviction cases filed during the pandemic came from landlords who failed to comply with rent regulations

However, some households who successfully bought their homes through the Make It Home program sold them after less than four years of ownership.

“People said they sold their houses because they couldn’t keep up with repairs and the lack of maintenance posed a health risk. They were selling because a loved one had died, a relationship had ended, or an investor was urging them to sell the house. Housing instability adds to the stress of managing these life crises,” Dewar said.

Even homeowners who sold their homes within four years said they were happy to buy their homes and wanted to stay despite the odds, the researchers said.

Nevertheless, numerous factors threatened their continued existence as homeowners. More than 30% of Make It Home buyers faced foreclosure for not paying property taxes. A few houses were empty. Owners cited difficulties with poor housing conditions, high housing spending and loss of income during the COVID-19 pandemic.

Related: UM study on Detroit’s Make It Home Repair program links home repairs and home stability

The Policy Brief recommends ways to improve sustainable homeownership rates for low-income buyers, including:

  • providing pre-sales education and financial advice to homeowners to help people build the financial stability necessary to purchase and continue owning a home;
  • Inspect homes before you buy them so potential buyers fully understand the scope of repairs needed.
  • Awareness and access to home insurance, as property contracts do not oblige the buyer to purchase home insurance and out-of-pocket repair costs can be expensive;
  • Provide financial assistance for major home repairs for people who cannot obtain a traditional home repair loan or line of equity due to poor credit, lack of equity in a property, or lack of disposable income for loan payments; and
  • Provide post-sales support like utility plans and property tax breaks to help manage ongoing housing costs and prevent home losses.

“Additional support services would help ensure homeowners receive the benefits of longer-term home ownership. In Detroit, assistance in enrolling in property tax reduction programs is critical because tax arrears can quickly lead to the loss of a home,” Mehdipanah said. “By tracking efforts like the Make It Home program over time, we’re gaining new insights into the challenges homeowners face and the types of support that would make a difference.”

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