Time is running out to save your home from foreclosure. Here’s how.

Wayne County Treasurer Eric Sabree is urging Detroiters at risk of foreclosure to get on payment plans, or pay their 2019 back taxes in full by March 31, as a two-year moratorium on foreclosures of occupied homes comes to an end and the deadline for redemptions approaches. 

According to a spokesperson for the county treasurer, as of Feb. 16, 17,359 properties in Wayne County are scheduled to be foreclosed on. Of that number, 12,990 are occupied. 

In Michigan, properties are foreclosed after three years of delinquent taxes, meaning those who are at risk have unpaid taxes from 2019 — right before the pandemic started — or earlier. 

Those facing property tax foreclosure have two options to save their home: Get on a payment plan by March 14, or pay their back taxes in full by March 31. If a homeowner misses these deadlines, a property will be foreclosed on by Wayne County and sold at auction in the fall.  

Foreclosures have been a hot topic in Wayne County — and specifically in Detroit — for years. Between 2005 and 2015, more than 140,000 properties were dispossessed through mortgage or tax foreclosures, according to research by Josh Akers of the University of Michigan-Dearborn and Eric Seymour of Brown University, who also found that, in that time, the city saw a massive shift in equity. Detroit, a city once known for having the most Black homeowners in the country, became a majority-renter city by  2015. 

While the City in recent years has celebrated a decline in occupied properties being auctioned — and the growth of payment plans and programs to help homeowners avoid foreclosure — the programs can still be confusing to navigate. There are various acronyms and deadlines all meant to help, but can still feel very intimidating. When Wayne County tells homeowners to  sign up for a payment plan by March 14, what exactly does it mean?

Here, BridgeDetroit breaks down the available programs to help you get help. First, we’ll deal with the two main foreclosure-fighting programs,  HOPE and PAYS. 

Homeowners Property Exemption (HOPE)

Deals with this year’s taxes to stop future foreclosures 

EXPLANATION: Designed for low-income homeowners whose incomes are under the federal poverty level, HOPE gives people a 100%, 50%, or 25% tax exemption for the current year’s property taxes. In other words, if you are approved for a property tax exemption in 2022, you will get an exemption on your 2022 taxes. 

ACRONYMS: HOPE used to be called HPTAP (Homeowners Property Tax Assistance Program), but was rebranded. In other municipalities, HOPE exemptions are referred to as PTEs (Poverty Tax Exemptions). 

HISTORY: Under Michigan state law, homeowners earning less than the federal poverty level are eligible for a 100% tax exemption. It is, however, up to municipalities to create the application process and systems for doling out these exemptions. For a long time, this was a problem in Detroit.

In 2017, an estimated 35,000 owner-occupied households met eligibility guidelines for a full exemption and 4,220 qualified for a partial exemption, according to research by the University of Michigan’s Poverty Solutions. However, only about  5,500 individuals applied for an exemption that year, and roughly 5,200 people received some sort of relief. This disconnect was the foundation for a suit filed by ACLU-Michigan, which led to a 2018 settlement with the City of Detroit and new protocols being put into place to get the word out. 

ELIGIBILITY: Though  the state allows for 100% tax exemptions for those under the federal poverty line, the City of Detroit also offers partial exemptions. For a single person, a homeowner  would get a 100% exemption if they made $17,774 or less, a 50% exemption if they made up to $20,479, or a 25% exemption if they made up to $23,055. A chart with a breakdown can be found here. The HOPE application is an annual application, and homeowners must reapply every year, even if they were previously approved.

DEADLINE: The Detroit Board of Review meets several times a year to dole out HOPE exemptions. For 2022, the board is scheduled to meet April 4, July 19 and Dec. 13. 

Detroiters are encouraged to submit their applications at least two weeks before these meetings. But the very last day to submit an application for a 2022 tax exemption would be Dec. 12. 

THE APPLICATION CAN BE FOUND HERE. 

Pay As You Stay (PAYS) 

Deals with back-taxes to stop current foreclosures by reducing the amount owed. 

EXPLANATION: Passed by the Michigan Legislature in March 2020, PAYS reduces back-taxes to 10% of the taxable value of a house for residents who own and live in their home. While HOPE gives a low-income homeowner a tax exemption for the current year, foreclosures in Michigan are based on back taxes (a house is at risk of foreclosure in 2022 because of its unpaid taxes from 2019 or earlier). PAYS deals with those back-taxes. Individuals can either pay the adjusted back-taxes as a lump sum (which comes with a greater discount) upfront, or over three years. 

ACRONYMS: Sometimes PAYS is referred to as PAYSPA (Pay As You Stay Payment Agreement). 

HISTORY: Recognizing that the HOPE program was difficult to apply for in the past — and likely some people have massive bills for taxes they should have never had if they had known about the exemptions — the PAYS program attempts to rectify this by reducing those older unpaid taxes. The catch is, you need to apply and receive a HOPE exemption in order to be eligible for PAYS.

ELIGIBILITY: People must be enrolled in HOPE to be eligible for PAYS. 

DEADLINE: In January, the Wayne County Treasurer’s Office and the Gilbert Family Foundation announced that they were launching a program to automatically enroll people in the HOPE program into the PAYS program. 

OK, but what happens if you have 2019 back taxes threatening your property for foreclosure this year and you didn’t get into the HOPE or PAYS program in time? There are other plans Detroiters can get on to pay their back-taxes and avoid foreclosure. 

Interest Reduction Stipulated Payment Agreement (IRSPA)

Deals with back-taxes to stop current foreclosure by creating a payment plan with reduced interest. 

EXPLANATION: IRSPA takes a property out of foreclosure and gives an individual up to five years to pay their owed back-taxes. Under the plan, there is an interest rate of 6 percent. If a homeowner misses a payment, they get kicked out of the program and the interest rate shoots up to 18 percent.

ACRONYMS: It’s just IRSPA.  

HISTORY: IRSPA was enacted into state law in 2015, at the height of Wayne County’s foreclosure crisis. A 2019 Detroit News investigation, however, has warned that though the plan is good to stave off immediate foreclosures and the loss of a house, it can leave individuals in a “payment plan purgatory.” The paper looked at some of the first homeowners to enroll in the plan and found that 40 percent — or more than 4,500 homes — were either foreclosed on or still at risk of foreclosure in 2020. 

ELIGIBILITY: To sign up for IRSPA, a person has to live in their home and have proof of a deed, as well as a Principal Residence Exemption (PRE). A PRE proves permanent residency and exempts a person from the tax levied by a local school district for school-operating purposes. It can save a person approximately 20 percent on their taxes each year. 

IRSPA is typically recommended for people who missed the HOPE/PAYS deadlines or make too much for HOPE/PAYS. 

DEADLINE: This is a rolling application, and homeowners can sign up year-round. Currently, the Wayne County Treasurer has an outdated application on its website. However, for help applying, you can call the Wayne County Treasurer (313-224-5990) or United Community Housing Coalition (313-405-7726). 

Distressed Owner Occupant Extension (DOOE) Payment Plan

Deals with back taxes, but doesn’t reduce the rate. 

EXPLANATION DOOE does not reduce the amount owed, or lower interest rates, it simply buys an owner time by removing them from the foreclosure pipeline. It is typically recommended that people then apply for an IRSPA after getting a DOOE. 

ACONYMS Just DOOE. 

ELIGIBILITY A person needs to be able to prove they own their home and live in it. They also cannot owe taxes before 2019. 

DEADLINE The deadline is March 14. Though many of the other applications can be found online, according to the Wayne County Treasurer’s website, a person needs to request a DOOE either by mail (Wayne County Treasurer’s Office, 400 Monroe St., 5th Floor, Detroit, MI 48226) or email (wctopaymentplans@waynecounty.com). Include your name, email address, phone number, and the property address and parcel number, (which is written on all tax communications) that you are concerned about.