- Quicken Loans Community Fund, United Community Housing Coalition teaming up with City to expand successful pilot program that prevented 80 foreclosures
- Program to target 300 homes facing foreclosure, tripling number of Detroiters affected
- Expanded program just one of many efforts, residents facing tax foreclosure can sign up TODAY for UCHC workshops to receive assistance
Expanding on a successful program that helped over 80 Detroit renters avoid displacement due to tax foreclosure and become homeowners last year, the City has requested permission from City Council to expand a program that will acquire homes of people facing foreclosures and resell them to the renters and homeowners in this year’s program.
In partnership with United Community Housing Coalition and Quicken Loans Community Fund, the expanded program will give 300 more Detroiters facing tax foreclosure the opportunity to stay in their homes. The families in these homes face displacement and uncertainty because of unpaid property taxes.
Overall, tax foreclosures are down to the lowest levels since the housing collapse in 2008 and the City is continuing aggressive efforts to prevent foreclosures, especially occupied foreclosures. In addition to the expansion of this program, the City is also expanding outreach efforts to sign up eligible residents for payment plans, tax assistance programs and prevent every foreclosure possible.
“As Detroit comes back, we need to do everything we can to make sure those who invested and stayed in our city are able to stay in their homes. This partnership is an important part of that effort,” said Mayor Mike Duggan.
In these last two years the City has piloted the use of right of first refusal to prevent foreclosures as part of the City’s commitment to pivot policy development focus to single-family housing and homeownership. This follows the City’s development of a Multifamily Housing strategy, which is now in implementation process with the City working with foundations to raise funds and focus on preserving and producing new affordable housing. With the shift in policy, the City will dedicate more resources to solving single-family home issues in Detroit, including tax foreclosures.
How it works
Using funds raised by the partnership, the City will acquire tax foreclosed homes through the City’s right of first refusal from Wayne County. These homes are occupied by renters whose landlords failed to pay their property taxes, victims of property scams, those with solvable probate issues and owners who would have qualified for property tax reductions.
Then, the City will pass these homes to UCHC at no additional cost, and UCHC will work with the individual renters and homeowners, allowing them to acquire the property with monthly payments set at an affordable rate. For former owner occupants experiencing poverty, UCHC will set the purchase price of the property at $1,000; other purchase prices will be set based on costs of the home, the range in 2017 was between $2,500 and $5,500. Funds collected will be held by UCHC for use in future purchases.
“This is a wonderful opportunity to create and preserve homeownership now and in the future. We are thankful for the tremendous work of the City and Quicken Loans Community Fund,” said Ted Phillips, director of United Community Housing Coalition. “We still need to continue to raise funds to assist as many residents as possible and to have residents affected to come in and see us.”
Expanding on success
The program is expanding on a successful effort in 2017 to keep renters who found themselves in tax foreclosed homes. In order to make sure everyone knows about this opportunity and other tax foreclosure prevention tools, the Quicken Loans Community Fund partnered with 30+ community organizations, UCHC and the City to lead a door-to-door outreach effort called “Neighbor to Neighbor,” which reached all 65,000 Detroit homes in tax distress as of October of 2017. This outreach delivered information on the program and other tax foreclosure prevention resources.
A total of 80 participants signed up for the pilot program, and the City of Detroit exercised its right of refusal to select and acquire those properties from Wayne County, withdrawing these properties from Wayne County’s 2017 tax foreclosure bid sale and transferring them to UCHC, which later sold them back to the occupants at affordable rates. Currently, of the 80 properties in the pilot program, 37 have been sold and deeded to the occupants, 39 occupants are adhering to their payment program. Of the 80 occupants, only 4 were delinquent in payments.
Efforts continue to prevent tax foreclosures in 2018
The expanded program is just one of the multiple efforts underway in the city to prevent foreclosures, especially occupied foreclosures. Additional efforts include
- Reaching out to thousands of households in Detroit, at least one year behind on their taxes, to help them apply for assistance programs like the reduced-interest payment plan for back taxes. With support from the Quicken Loans Community Fund, dozens of community groups have come together to knock on thousands of doors of those at risk of foreclosure to educate them about their options. As part of Neighbor to Neighbor, community groups across the city are also hosting monthly workshops that walk Detroiters through the process of applying for tax exemptions.
- Proactively mailing eligible Detroiters the Homeowners Property Tax Assistance Program application, to determine whether they qualify for tax relief. Detroit’s property tax exemption for low-income households can reduce or eliminate property taxes on homes, depending on the occupants’ income levels and the number of people living in the home.
- Creating the Interest Rate Reduction Program. Under the program, eligible homeowners can enter into payment plans at a reduced interest rate of 6% — compared to the usual 18% — and pay delinquent taxes, resulting in a more reasonable monthly payment that thousands of homeowners have been able to afford.
- A comprehensive citywide reassessment of property values, the first in 60 years, so that residential home values more closely reflect market values, which fell steeply in the aftermath of the 2008 national housing collapse and subsequent recession.
Assistance Workshops This Week
Additionally, UCHC is continuing its efforts to educate residents facing foreclosure about their options. UCHC will host a number of assistance workshops for any resident, renter or homeowner, who may be facing foreclosure this week. Those events will be held at UCHC offices, 2727 Second Ave., Suite 313, at the following times:
- Tuesday, July 10 at 5:00 p.m.
- Wednesday, July 12 at 11:00 a.m.
- Thursday, July 13 at 2:00 p.m.
- Friday, July 14 at 11:00 a.m.
For more information on UCHC foreclosure prevention workshops, resident can visit https://www.uchcdetroit.org/ or call (313) 963-3310 (ext. 339).
Detroit foreclosures continue steady decline
These efforts by the city and partners have led to a steep and steady decline in the number of foreclosures. In 2017, the total number of foreclosures on occupied and vacant homes in Detroit caused by nonpayment of taxes declined to the lowest level since the 2008 housing collapse, to 6,315. That was a drop of 70% from 24,793 in 2015. The decrease was even greater for owner-occupied homes, which fell 88% to 786 foreclosures, from 6,408 in 2015.