Since Jamia Timmons was 16 years old, she knew she wanted to be a homeowner.
Like most renters, it was tough to save for a down payment. She struggled to put money aside as she juggled the high cost of living, debt, emergency expenses and car insurance.
“Both of my parents are homeowners,” she said in September. “My grandfather was a homeowner. I want to become a homeowner. I want something tangible that I can pass down to my children.”
A little more than a week later, at 26 years old, Timmons closed on a colonial on Detroit’s west side, thanks to the city’s down payment assistance program.
The program provides up to $25,000 in cash to qualified first-time homebuyers, and is among the efforts to boost homeownership in a city where, for years, most residents rented.
The balance has shifted in recent years. The share of Detroiters who own the homes they live in increased in 2023 to 54%, up from 50% the prior year, U.S. Census Bureau data show. The effects can be life-changing, with rents often outstripping monthly mortgage bills and homeownership as the foundation to building generational wealth.
Still, Detroit-based housing experts say residents struggle to purchase homes in the city because of low credit scores, a lack of savings and the high cost and low availability of quality homes.
That’s where programs like down payment assistance can lend a hand to Detroiters who want to become homeowners.
The program’s first round has helped 434 residents purchase homes, and round 2 is underway, with Detroit Mayor Mike Duggan saying it serves as a model for Vice President Kamala Harris’ proposal to provide up to $25,000 in down payment assistance.
For Timmons, a lifelong Detroiter, the three-bedroom home represents a life milestone and a continued commitment to her city.
“I just want to keep my roots in Detroit,” she said.
‘I can’t save anything’
Rachael Hernandez, a single parent living in Southwest Detroit, has struggled to keep up with rising rent costs, utility bills, food and gas. Her rent and bills eat into more than half of her monthly income. If her rent keeps going up, she’d have to get a second or third job. Hernandez has been looking to buy a home for about a year, but has struggled to come up with enough for the down payment.
“I can’t save anything,” said Hernandez, 39. “Everything’s so expensive.”
Her rent is so high that she might as well be paying for a mortgage, she said in an early September interview. Hernandez, who has always been a renter, recently put in an offer on a home. She’s been pre-approved for a loan, and plans to apply for down payment assistance.
“There is a large opportunity for Detroiters to lower their overall housing costs by being homeowners. That’s one of the reasons why this program is so important,” said David Palmer, owner of the Detroit-based Kite & Key, a consulting company, and an associate broker and realtor.
Palmer’s analysis of sales data shows home purchases were distributed in neighborhoods that traditionally see low mortgage attainment opportunities, like much of the city’s upper east side.
The program, which kicked off last year, has helped 434 residents become first-time homeowners with $12 million in American Rescue Plan Act (ARPA) dollars.
During the initial program launch, 94% of grant recipients were African American. The monthly mortgage, on average, is $926. The average sales price of a home was about $112,000. The down payment assistance was granted throughout the city with the most awards in District 1, home to the Rosedale Park and Hubbell-Lyndon neighborhoods, and District 2, which includes College Park and the University District.
“The majority — vast majority — of our down payment payment assistance recipients were African American. So I think that just speaks volumes to the importance of this program and the ability to recreate Black wealth and recapture Black wealth in this community,” said Krysta Pate, CEO of the Ownership Initiative, the firm that helped design the program.
There’s also been high demand. After the program’s first round application closed, 6,000 people expressed interest in a second iteration of the program, meant to reach up to 300 Detroiters.
In June, a second round opened up, backed by another $5 million in ARPA funds and $2 million from banks, philanthropic groups and Wayne County, with room for another 300 Detroiters.
As of Oct. 13, the latest round of the program received 530 applications, of which 394 had the required documents to move on to a review process, according to the city of Detroit’s Housing and Revitalization Department. Among those, 176 have been approved and 56 were denied. Reasons for a denial include: a duplicate application, not meeting eligibility criteria and the sale falling through. A little more than 100 applicants closed on homes and 67 are pending. The average sales price of a home bought with help through the program is $126,842, and the average mortgage payment is $1,020. Not all of the applicants are renters — some said they were living friends or family. The vast majority of applicants who closed this time around were paying rent when they applied.
The program remains open to new applicants.
They “can breathe a little” and afford groceries and car payments, said Dina Harris, CEO of the Detroit-based nonprofit National Faith Homebuyers, which is administering the program.
“It changes the game for families,” Harris said.
Hurdles to homeownership
Detroiters, in their journey to homeownership, still face a number of hurdles.
Juan Alfaro, a housing counselor and the adult services director at the Detroit Hispanic Development Corp., said he sees three major barriers among his clients: lack of work history required by banks, damaged credit from debt and insufficient savings.
The dearth of housing supply makes it that much more difficult for people to afford to own a home, said JP Walsh, a research analyst for the housing finance policy center at the Washington, D.C.-based Urban Institute.
“We’re just simply not building enough new housing and a lot of the housing that is getting built is not on the affordable spectrum,” Walsh said. “This is kind of a chicken and an egg situation, where we’re not building enough. Because of this, home prices continue to go up. So you have more expensive housing, less of it, so there’s more demand for fewer homes, and it’s just causing a problem in terms of entry level home purchases.”
Meanwhile, Alex Makohn, director of homeownership assistance programs at the social services nonprofit, MiSide, said the top issue she encounters is the lack of move-in ready, quality and affordable housing stock. When people are financially ready to purchase a home, they have to then consider the repair costs.
“There’s a lot of cheap properties within the city of Detroit still, but they need tens of thousands of dollars worth of repairs to become livable, and a lot of times — especially for the first time homebuyer — that’s not a project that someone wants to take on,” Makohn said.
That’s something Detroiter Micah Williams encountered. Owning a home wasn’t on his bingo card, he said. There was the cost of paying for a down payment, but also the price tag of sustaining a home and making repairs.
“Anything that was affordable seemed like it needed so many dollars in repairs,” Williams, 25, said in September.
He and his wife moved into their Virginia Park home earlier this year, thanks to a $25,000 grant from Detroit’s down payment assistance program. They had been renting a one-bedroom apartment in New Center and, with a child on the way, were wondering if they would ever be able to purchase a home.
“Pretty much everyone around our age are all renters,” he said.
Now, they have their own place. The couple sees themselves in the three-bedroom, two-bathroom home for at least the next few years, he said. Williams is the pastor of a new church in his neighborhood.
“As long as the Lord says the same, we’ll be here for a really long time,” he said. “Our plan is for our kids to graduate high school in the city.”
For more information about the Detroit down payment assistance program, go to www.detroitdpa.org or call the Detroit Housing Resource Helpline at 866-313-2520.