LANSING, Mich. – March 28, 2016 – (RealEstateRama) — Michigan’s most successful programs for reducing foreclosure and eliminating blight will get an additional $188 million from the U.S. Department of Treasury under its Hardest Hit Fund (HHF) program to further aid in economic recovery for homeowners and communities, MSHDA Executive Director Kevin Elsenheimer announced today.
These funds represent the largest Phase 2 funding amount among participating states. That brings our state’s total HHF award since 2010 to more than $761 million, including the $262.5 million since the federal government’s February announcement that it was investing $2 billion in the program.
Earlier this month, U.S. Treasury approved MSHDA’s plan for use of $74.5 million for blight elimination in Detroit and Flint and mortgage assistance programs statewide. MSHDA will submit a plan to Treasury for how Michigan wants to allocate the additional $188 million.
“While our unemployment rate has dipped below the national average — there are still families and communities that are struggling, and these funds have a tremendous potential to help them get back on track,” Snyder said. “Michigan is ready to put these Hardest Hit Funds to good use to help Michiganders stay in their homes and eliminate blight across the state.”
The Michigan Bankers Association’s 2009 national delinquency survey showed that 12.99 percent of mortgages were delinquent and 11.13 percent of loans were seriously delinquent. MBA’s 2015 survey had only 5.17 percent as delinquent 2.37 percent of loans as seriously delinquent.
“While we can’t take complete credit for this major shift, we do know our homeownership retention rate at 24 months, post assistance, ranges from 98.99 percent to 100 percent,” Elsenheimer said. “We strongly believe that without the HHF assistance many homeowners would have lost their homes to foreclosure. We look forward to continuing these positive trends.”
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 reopening on May 1 with the infusion of $18.6 million in HHF funding.
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.
“Six years ago, MSHDA created its Hardest Hit programs to protect home values, preserve homeownership and promote jobs and economic growth, and we’ve been fairly consistent with those outcomes,” MSHDA Homeownership Director Mary Townley said. “We’re ready to start deploying these dollars again where needed most to address the lingering effects of the recession from the last decade.”
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 funds.
The Michigan State Housing Development Authority (MSHDA) provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low- and moderate-income residents and to engage in community economic development activities to revitalize urban and rural communities.*
*MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds as well as notes to private investors, not from state tax revenues. Proceeds are loaned at below-market interest rates to developers of rental housing, and help fund mortgages and home improvement loans. MSHDA also administers several federal housing programs. For more information, visit www.michigan.gov/mshda.