Foreclosure prevention to continue; blight elimination efforts in Detroit and Flint will get a boost
LANSING, Mich. – (RealEstateRama) — A $74.5 million plan by the Michigan State Housing Development Authority to help homeowners statewide avoid foreclosure and eliminate blight in Detroit and Flint has been approved by the U.S. Department of Treasury under its Hardest Hit Fund program, Gov. Rick Snyder announced today.
“These funds have been critical in helping people stay in their homes and avoid foreclosure while helping Detroit, Flint and other cities across our state eliminate blight and revitalize neighborhoods,” Snyder said.
In February, the federal government announced an additional $2 billion investment in the HHF program. Funding is being allocated among participating states in two phases of $1 billion each. Today’s funding is from the first of those two phases.
Michigan is dedicating 75 percent to its blight elimination program and 25 percent to support mortgage assistance programs. Blight funds will be divided among the two cities with the largest number of blighted structures with Detroit getting $41.9 million and Flint receiving $13.9 million.
The new mortgage assistance dollars will aid homeowners who may be struggling with a hardship. The Step Forward Michigan online application portal, which closed on Dec. 31, 2015, is expected to reopen next month with the infusion of $18.6 million in new HHF funding.
“We continually advocate for and provide the tools and resources that can help Michigan homeowners and communities successfully navigate through hardships, including the lingering effects of the recession from the last decade,” MSHDA Executive Director Kevin Elsenheimer said.
Elsenheimer noted MSHDA already has applied for a much larger second phase of HHF dollars that could help further bolster homeowners and communities throughout the state. He said he expects a response from the U.S. Treasury on that request in the coming weeks.
Michigan originally received $498 million from the Hardest Hit Fund when the program was announced in 2010 in response to the housing crisis that led to unprecedented home price declines and high unemployment.
“Although Michigan’s unemployment rate is now below the national average and a great example of our state’s continued success, the importance of these HHF dollars on Michigan’s reinvention cannot be underscored enough,” Elsenheimer said. “They will be greatly appreciated by the citizens and communities that may still be lagging behind.”
Since the program’s inception, more than 30,000 households have been helped with over $273 million in mortgage assistance to avoid foreclosure. From 2013 when the Blight Elimination Program was introduced in the state, about 8,500 structures have been removed with approximately $130 million in HHF funds.
Michigan has until December 31, 2020 to use all the funds.