LANSING, MI – The Michigan State Housing Development Authority will continue to focus on preventing foreclosure by eliminating blight and offering direct homeowner assistance with the $188.1 million in funds it was awarded in April, according to an allocation plan approved today by the U.S. Department of Treasury under its Hardest Hit Fund (HHF) program.
“The strategic use of these dollars will greatly benefit Michigan homeowners and strengthen communities, resulting in positive progress for people across the state,” Gov. Rick Snyder said.
Detroit will receive $88.2 million (75 percent) in blight elimination funding, while Flint will get $17.6 million (15 percent). The remaining 10 percent in blight funds, $11.7 million, will be awarded to other communities through a competitive application process. As a result, cities with populations less than 50,000 will be able to apply for awards ranging from $250,000 to $1 million while all others can apply for $1 million to $5 million.
While unemployment is below the national average and Michigan’s residential properties have steadily increased in market value, many counties are still experiencing high numbers of households facing property tax foreclosure. A recent survey of the 10 county partners receiving the most HHF funding found that, in total, 39,857 residential property owners were in foreclosure and another 149,509 were in forfeiture and in danger of losing their homes.
The Step Forward Michigan online application portal is open and ready to assist homeowners in need of mortgage and property tax assistance under the Loan Rescue program. Today’s funding of $41.3 million, combined with the $18.6 million in HHF funding previously allocated to Loan Rescue from an earlier April funding phase, increases the total help directly available to homeowners by $59.9 million.
“In putting together the plan, we placed a priority on using the majority of funds in the areas of greatest need and where we have been most successful,” MSHDA Executive Director Kevin Elsenheimer said. “We remain committed to providing a holistic solution to the state’s foreclosure problem by helping individual homeowners and by stabilizing local housing markets in Detroit and Flint, where vacancy rates remain the highest.”
MSHDA also listened to community leaders across the state who expressed a need to participate in the blight elimination program.
“To be eligible for these funds, interested municipalities will have to submit an application and strategic plan following the same process documenting need, capacity and completion projections that our current and previous blight partners have,” MSHDA Homeownership Director Mary Townley said.
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.
To date, the Step Forward Michigan Program has disbursed over $281 million to help 31,396 Michigan households with mortgage, property tax, or condominium assistance to avoid foreclosure. Additionally, since 2013 when the Blight Elimination Program was introduced in the state, about 9,005 structures have been removed with approximately $138.9 million in HHF funds to help stabilize local housing markets and prevent avoidable foreclosures.
Michigan has until December 31, 2020 to use all funds.