Zero interest loans help Detroit fix up homes

Jun 17, 2015

In an effort to combat urban blight and uplift neighborhoods by making home repairs more affordable, the City of Detroit has created a 0% Interest Home Repair Loan Program. It’ll provide $8 million in financing for eligible homeowners looking to patch roofs, replace windows, upgrade plumbing, and address structural or safety issues. “Establishing this loan fund will generate a wave of home improvement work across the city that’ll raise property values and strengthen neighborhoods," said Detroit Mayor Mike Duggan.

The program is a public-private-partnership involving the city, the Local Initiatives Support Corporation (LISC) and Bank of America, targeting low- to moderate-income Detroiters. To qualify, homeowners must have occupied and owned a home in the city for at least six months and have a FICO credit score of at least 560. A family of four can’t make more than $54,150 a year to be eligible; however, households in certain areas of the city are eligible no matter their income.

Borrowers will pay no interest on their loans – partners will absorb most of the costs – but they must pay back the principal. That helps homeowners improve their credit history as they improve their homes, while also building a track record of loan performance that will encourage others to lend and invest in their communities.

Funding for the program comes from $4 million of Community Development Block Grant funds from the U.S. Department of Housing and Urban Development and $4 million from Bank of America. “We see this partnership as a way to support homeowners with resources that’ll improve their lives and be instrumental in sustaining the economic vitality of our city,” said Matt Elliott, Bank of America Michigan President.


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Establishing this loan fund will generate a wave of home improvement work across the city that’ll raise property values and strengthen neighborhoods.

Mike Duggan
Detroit Mayor