J.P. Morgan Chase & Co. will announce today that it has launched a $5.5 million program with Liberty Bank in Detroit to provide home restoration loans and down payment assistance for those buying houses in Detroit through the Detroit Land Bank Authority’s property auctions.
The program is part of $100 million in loans and grants that Chase announced in May to support economic development in the city over five years. Chase now has put $20 million of the commitment to work on blight reduction, workforce development, home repair and small-business growth.
The home restoration program, scheduled to be announced at the Henry Ford Academy elementary school in Detroit, initially will target the Boston-Edison and East English Village neighborhoods, beginning with an auction of Boston-Edison homes July 28. The program eventually will expand to other neighborhoods.
The commitment to Liberty Bank will come from the J.P. Morgan Chase Foundation and go to Liberty Bank’s nonprofit community development bank, Liberty Foundation Inc.
The contribution will create a $5 million loan-loss reserve fund for Liberty Bank to provide up to $20 million in new rehab residential mortgage loans. With the reserve fund, Liberty Bank will be able to expand underwriting for rehab loans and provide flexible terms to eligible borrowers who buy a home through the city’s Neighbors Wanted property auction.
Chase also will create a $300,000 down payment assistance fund to be managed by Liberty Bank. Under the fund, eligible Detroit residents can receive up to $10,000 in down payment assistance.
The remaining $200,000 will help Liberty Bank manage the restoration program.
“Revitalizing Detroit’s neighborhoods is a critical priority for the city’s recovery, and we believe the home restoration program will support the auction and accelerate the turnaround underway in key neighborhoods,” Peter Scher, executive vice president and head of corporate responsibility for Chase, said in a news release.
Detroit residents can learn more about eligibility by visiting Liberty Bank’s branch in Detroit at 9108 Woodward Ave. or calling (313) 873-3311.
Borrowers must occupy the home as their primary residence, be a current Detroit resident, participate in housing counseling, demonstrate an ability to repay the loan and comply with all auction rules.
To be eligible for down payment assistance, households must meet those criteria and have an income at or below 120 percent of the area median income, which is about $32,000.
In May, Chase announced it would invest $20 million each in Invest Detroit and Capital Impact Partners, two nonprofit community development lenders, to provide flexible, long-term debt capital to fund development projects in Detroit neighborhoods.
Of the $20 million of the $100 million that has now been deployed, Chase has made $7.5 million in philanthropic grants to Invest Detroit and Capital Impact Partners to provide operational support for their recently established funds and given $2.8 million to fight blight, $2.1 million for workforce training, $1.1 million to support work on the M-1 Rail line and $1 million for small-business initiatives in conjunction with Eastern Market, Bizdom and TechTown Detroit.
New Orleans-based Liberty Bank entered Detroit in 2009 when it bought the assets of Home Federal Savings Bank after it was shut down by state and federal regulators.
