Quicken Loans and the City of Detroit
Detroit Land Bank has 1,160 homes for sale. Detroit-based Quicken Loans is the nation's largest retail mortgage lender.
Detroit Land Bank implements programs which enable Detroit home buyers to purchase a Land Bank home, at a steep discount. One such program enables school employees, and full-time educators within the City of Detroit - those teaching prekindergarten through 12th grade - to receive a 50% discount off of the price of a Land Bank home purchased at an auction.
Another Detroit Land Bank program enables City Employees, retirees, as well as immediate family members of retirees who live within the City of Detroit, to purchase a Land Bank home in Detroit at an auction, at the same 50% discount.
The nation's largest retail home loan provider...is Quicken Loans.
In 2007, Quicken Loans announced that the Company would be moving its headquarters to downtown Detroit. Three years later, in 2010, Quicken Loans corporate relocation to Detroit was complete. Today, Quicken Loans employs over 17,000 people. And in February of 2018, Quicken Loans announced that the Company had become the largest home loan provider in the United States.
Between the years 2013 and 2017, Quicken Loans originated over $400 billion in residential mortgage loans. In the year 2000, Quicken Loans deployed a strategy which proved to be highly effective. The Company transitioned to a 50-state, centralized, consumer-direct mortgage lender. In doing so, Quicken Loans gained the capacity to close mortgage loans in all 3,000 counties across the United States. Quicken Loans is an American Success Story. And Quicken Loans, is based in Detroit.
With an emphasis placed upon the renovation of Land Bank homes, as well as the owner-occupancy-of these Land Bank homes, once renovated, Detroit Land Bank implemented their "Rehab and Ready" program in four Detroit neighborhoods: Bagley, Cray/St. Mary's, College Park, and, Evergreen/Outer Drive.
Through "Rehab and Ready", a Land Bank home buyer can acquire a newly-rehabbed, move-in ready Land Bank home. The rehabbed home comes complete with kitchen appliances, updated plumbing, updated electrical, and granite countertops.
Enter Detroit-based Quicken Loans.
So, Quicken Loans and Detroit Land Bank entered into a public-private partnership. This partnership emphasized the stabilization of Detroit neighborhoods...assisted by $5,000,000 in grant funding. The $5,000,000 in grant funds was provided by, Quicken Loans.
The Program has three main goals: 1) renovate Land Bank homes, 2) increase owner-occupancy, and, 3) work towards home price stability in the four Detroit neighborhoods. Furthermore, the Program provides the sales "comps" appraisers need when appraising the Land Bank homes.
The $5,000,000 Quick Loans grant.
Grant funds can be used to finance the renovation of a Land Bank home. Furthermore, if a renovated Land Bank home sells to a Land Bank home buyer at a sale price which is less than the amount required to cover costs, grant funds can be partitioned off, to replenish the fund. Making up the shortage.
Detroit Land Bank owns about 20% of all single-family homes in the City of Detroit. According to Data Driven Detroit, in 2018, there were a total of 43,516 vacant homes in the City of Detroit. Sixty-eight percent of these vacant Detroit homes are owned by Detroit Land Bank. Between 2013 and 2018, nearly one-third of all homes in Detroit, went to foreclosure.
Today, Detroit is a majority-renter city. Which means, more people in the City of Detroit rent than own. All the while, pathways to affordable home ownership in Detroit could be thought through by creative real estate developers. Because there is an over-abundance of vacant homes, in the City of Detroit. These vacant Detroit homes could be transitioned to quality, rehabbed homes which are affordable to owner-occupying home buyers in Detroit
Detroit Land Bank has some great programs, Yet, we are talking about a hard-hit city - Detroit.
Detroit had a population of about 1,850,000 people, in 1950. And Detroit had a population of about 673,000, in 2017. Take 1,2000,000 people out of any city, that city has challenges. In Detroit, these challenges are correlated to, limited bank lending. Leading to an inability for Detroit home buyers to obtain the home loan financing they need, to finance the purchase of their Detroit home.
In 2017, banks issued less than 1,000 mortgages in the City of Detroit. Too few loans. Which makes Quicken Loans, 1) relocation to Detroit, and, 2) partnering with Detroit Land Bank...admirable, entrepreneurial, and quite simply, commendable.