Michigan plans $75M more fed funds to fight blight in Detroit, Flint

Plan to utilize increased Hardest Hit Fund allocation approved

The Department of the Treasury approved Michigan’s plan to use the $74.5 million allocated to the state as part of an expansion of the Hardest Hit Fund program, paving the way for increased foreclosure prevention and blight elimination efforts in the cities of Detroit and Flint.

The state of Michigan received the additional $74.5 million as part of $1 billion expansion of the Hardest Hit Fund, with the Housing Finance Agencies of 18 states, including California, Florida, Illinois, Michigan, and Ohio, receiving additional funding to continue to assist “struggling homeowners” and help stabilize neighborhoods in many of the nation’s hardest hit communities.

The office of Michigan Gov. Rick Snyder announced the Treasury Department’s approval of the Michigan State Housing Development Authority’s plan, which will see the state dedicate 75% of the $74.5 million to its blight elimination program and the remaining 25% going to support mortgage assistance programs in the state.

According to Snyder’s office, the blight funds will be divided between the two cities with the largest number of blighted structures in the state, with Detroit getting $41.9 million and Flint receiving $13.9 million.

Snyder’s office said that Michigan originally received $498 million from the Hardest Hit Fund when the program was announced in 2010 due to “unprecedented home price declines and high unemployment” in the state.

Snyder’s office said that more than 30,000 households in the state received more than $273 million in mortgage assistance to avoid foreclosure since the program’s inception.

And since the state’s blight elimination program was introduced in 2013, approximately 8,500 structures have been removed with approximately $130 million in HHF funds.

“These funds have been critical in helping people stay in their homes and avoid foreclosure while helping Detroit, Flint and other cities across our state eliminate blight and revitalize neighborhoods,” Snyder said.

According to Snyder’s office, the new mortgage assistance dollar will allow the state to reopen its Step Forward Michigan online application portal, which closed on Dec. 31, 2015, in April with the infusion of $18.6 million in new HHF funding.

“We continually advocate for and provide the tools and resources that can help Michigan homeowners and communities successfully navigate through hardships, including the lingering effects of the recession from the last decade,” MSHDA Executive Director Kevin Elsenheimer said.

Elsenheimer also said that the MSHDA applied for a “much larger” second phase of HHF money, because the additional funding could help further bolster homeowners and communities throughout the state.

Elsenheimer said that he expects a response from the U.S. Treasury on that request in the coming weeks.

“Although Michigan's unemployment rate is now below the national average and a great example of our state’s continued success, the importance of these HHF dollars on Michigan’s reinvention cannot be underscored enough,” Elsenheimer said. “They will be greatly appreciated by the citizens and communities that may still be lagging behind.”

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