Neighborhood Assistance Corporation of America and Bank of America have partnered with the City of Detroit to create unprecedented mortgage program for homes purchased and renovated in the city of Detroit.
Detroit Mayor Mike Duggan today announced a new mortgage program that will directly address many of the problems facing those trying to be homeowners in the city of Detroit. The Neighborhood Assistance Corporation of America (NACA), along with Bank of America, have created the “Detroit Neighborhood Initiative,” a program for homebuyers in Detroit that combines a zero down, low interest fixed rate mortgage, and other very favorable terms with rehabilitation dollars necessary to rebuild Detroit’s classic houses and neighborhoods. “We know the desire to renovate these houses and rebuild our neighborhoods is there” said Mayor Duggan. “What we haven’t had is enough lenders willing to take a chance on our city to show what’s possible. That changes now in a big way.”
The Detroit Neighborhood Initiative is a cooperative effort of NACA, Bank of America, and the Opportunity Resource Fund. Buyers that complete the NACA pre-purchase home buyer program can qualify for a remarkable mortgage, which includes:
- No down payment
- No closing costs
- No fees
- Below market fixed rates (3.5% – 30 year / 2.875% – 15 year)
- 30 year – One percent of mortgage permanently reduces rate by .25% to virtually zero
- 15 year – One percent of mortgage permanently reduces rate by .50% to virtually zero
- Available on all property types: new, existing, single to four family, condo
- RENOVATION FUNDING INCLUDED IN MORTGAGE
- Credit Score never considered in mortgage process
- Homebuyers individual payment history utilized
- Underwriting done by NACA
Most importantly, all buyers in Detroit will have access to loans worth up to 110% of the home’s loan-to-value ratio. For homes bought through the Detroit Land Bank’s site, www.buildingdetroit.org, that loan-to-value ratio increases up to 150%.
The NACA program is already established as the best mortgage in America, and is available in 40 other markets. But NACA CEO and founder Bruce Marks says the Detroit program, and its up to 150% loan-to-value ratio is unprecedented. “This is a game changer, which has never been done in the history of mortgage lending. The mayor of Detroit, Bank of America, and NACA are not only redefining neighborhood stabilization for Detroit, but are providing a national model of a true partnership that will significantly stabilize both neighborhoods and homeowners. It shows a path forward for how hard hit communities can truly be revitalized.”
Bank of America will be providing the mortgages up to 150% LTV through NACA and the Opportunity Resource Fund for borrowers who complete the NACA pre purchase program. This will allow buyers to qualify for mortgages in a market that has been hard hit by the decline in property values in the wake of the recession. “Detroit has unique challenges in its housing market” said Mayor Duggan. “I have been upfront about the need to try something new and different to help kick-start things, and rebuild property values in Detroit. Allowing those that want to invest and live in our city to access the money they need to make their dream home a reality is a crucial step. I am thrilled about the faith that Bank of America, NACA, and the Opportunity Resource Fund have shown in our city and its people.”
The partnership made sense, according to Bank of America. “Our ties with the people and businesses of this community are deep and longstanding,” said Matt Elliott, Michigan Market President for Bank of America. “The addition of this homeowner program gives us another tool to help play our part in Detroit’s resurgence.” That sentiment was echoed by Christi Coady Narayanan, CEO of the Opportunity Resource Fund. “We are pleased to work with the City, NACA and Bank of America to make homeownership a reality for even more Detroit residents. We have always believed that investing in Detroit – for the long term – is good for the community, its residents and businesses.”
People interested in finding our more about the Detroit Neighborhood Initiative should go to www.NACA.com or contact NACA at 425-602-6222. In addition, all interested homebuyers should attend the Homebuyer’s Workshop which is the first step in becoming a homeowner on these incredible terms. The next one is as follows:
When: Saturday April 25
Where: Pure Word Missionary Baptist Church, 20011 Grand River Avenue, Detroit, MI 48219
Time: 9:30 AM – 1:00 PM
To register: Go to www.naca.com /register
For more information: Contact NACA at (425) 602-6222
Loan Example for the Detroit Stabilization Program:
The below example of a likely loan through this program demonstrates the incredible terms and impact. A homebuyer would have a renovated home with a fixed 30 year mortgage payment of $397 or for a 15 year payment of $593. It is significantly less than what the homeowner would be paying in rent. This would not be possible with any other mortgage since such terms are not available and because the depressed values in Detroit would likely value this property at $40,000 thus requiring 150% LTV to qualify.
30 Year 15 Year
Purchase Price (through Detroit Land Bank-estimated) $5,000 $5,000
Rehab Costs: $55,000 $55,000
Down payment: $0 $0
Closing Costs: $0 $0
Total Mortgage: $60,000 $60,000
Assessed Value: $40,000 $40,000
Interest Rate (fixed) 3.5% 2.75%
Principal & Interest Payment: $218 $414
Taxes: $112 $112
Insurance: $67 $67
Mortgage Payment: $397 $593
ABOUT BANK OF AMERICA
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,800 retail banking offices and approximately 15,800 ATMs and award-winning online banking with 31 million active users and approximately 17 million mobile users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
Visit the Bank of America newsroom for more Bank of America news.
ABOUT NACA (www.naca.com)
The Neighborhood Assistance Corporation of America (“NACA”) is a non-profit, community advocacy and homeownership organization. NACA is the largest non-profit HUD certified counseling agency. NACA was established in Boston almost 30 years ago and now has more than two million members nationwide. NACA is the largest and most effective organization in modifying mortgages and provides America’s best mortgage. NACA has set the standard of providing affordable homeownership making homeownership a reality for many thousands of working people, enabling even those with credit issues to purchase a home or modify their predatory loan on far better terms than those provided even in the prime market.
NACA has been highlighted in the national news and its CEO Bruce Marks was named Bostonian of the Year for 2007 because of NACA’s work in getting the major lenders and servicers to modify home loans often the same day through the extraordinary NACA American Dream Events (over 150 events nationwide). See Bostonian of the Year. He has also testified in congress on numerous occasions including on September 12, 2000, being one of the only people to sound the alarm of the pending mortgage crisis.
ABOUT OPPORTUNITY RESOURCE FUND
Opportunity Resource Fund is a nonprofit 501(c)(3) CDFI with celebrating 30 years of working for social and economic justice. Supporting Michigan’s communities via the creation of decent and affordable housing, jobs and great commercial spaces, OppFund is proud to be a catalyst for positive change. www.oppfund.org