The Duggan Administration is joining with Flagstar Bank to offer government employees a special mortgage program for homes bought through Detroit’s Land Bank.
Flagstar officials say they will write mortgages that equal 300 percent of a home loan for current city of Detroit employees.
The offer adds onto a 50 percent discount city workers are already eligible for if they buy a house through one of the Detroit Land Bank auctions.
Detroit Mayor Mike Duggan says since the Great Recession homes in the city have been far undervalued, while the price for houses in surrounding communities have been on the rebound.
He says, “The suburban property values have come up pretty much to 2007 levels. Detroit is still lagging 50 percent behind. So when they go to write the appraisals we are driving people out of the city and into the suburbs. Because you can get a mortgage for a smaller house for more money in the suburbs than you can in Detroit.”
The move is designed to both lure more city employees to live in Detroit and help fill vacant neighborhoods.
Officials estimate only about half of all city workers live in Detroit.