Route Fifty, a publication that targets state and local government leaders, reports on the extraordinary impact of Detroit’s zero percent home repair loan program, which LISC has been running since 2015. To date, the program has helped nearly 700 families make critical repairs to their homes and is, at its root, “a Black homeownership preservation tool for really intergenerational wealth-building strategy,” says LISC’s Damon Thompson, who is quoted alongside LISC President Denise Scott.
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One City’s Attempt to Bring Racial Equity to Home Repairs
By Molly Bolan, Route Fifty
As the nation continues to confront the affordable housing crisis, there are big questions around how to address housing challenges equitably and sustainably. In Detroit, one such approach is interest-free home repair loans.
Established in 2015, Detroit’s 0% Interest Home Repair Loan Program offers 10-year, interest-free loans from $5,000 to $25,000 to help homeowners make repairs such as replacing windows, removing lead and fixing structural issues. The idea is to help residents—particularly residents of color—not only stay in their homes but also maintain safe homes.
Indeed, while the program requires that applicants live in their homes for at least six months before applying, a large share of applicants has been in their homes for several years, if not decades.
“Building new is not enough,” said Denise Scott, president of the Local Initiatives Support Corporation (LISC), a community development nonprofit. “So our strategy is to build new, preserve what has already been built [and] find ways to keep it affordable.”
Barriers like insufficient collateral or bad credit bar many Detroiters from accessing home improvement capital from private banking institutions, according to LISC. In the years preceding the program’s establishment, 80% of Detroit residents’ applications for loans backed by the Federal Housing Administration (FHA) were denied.
Since Detroit’s 0% Interest Home Repair Loan Program launched, nearly 800 loans have been closed and construction on 682 properties has been completed, according to Damon Thompson, LISC Detroit’s deputy director. That represents a $13.5 million investment in the community, particularly Detroit’s Black community. Thompson notes that 95% of borrowers are Black.
“We really see this as a Black homeownership preservation tool for a really intergenerational wealth-building strategy,” he said.