That seems to be Detroit Work's plan, but of course its with taxpayer's money, so real world economic reality is to be ignored.
Derek Horride always wanted to own his own home in the historic Boston Edison area, a neighborhood that has felt the brunt of the city's economic troubles with many dilapidated structures.
But Horride, 27, a nurse who works overnight with spinal cord injury patients, never could have imagined owning a fully restored historic home with $260,000 in improvements as part of Mayor Dave Bing's Detroit Works Project to revitalize the city. "Growing up and seeing these homes and professionals — hardworking people that lived in these homes — I always dreamed that I would live in one of these homes myself," said Horride, after touring his three-story, five-bedroom home with a new wooden deck, stained hardwood floors and two car-garage. "So to be able to purchase one … is a wonderful opportunity. I'm just fortunate to be able to take advantage."
Wallace said the land bank's appraised value of Horride's house was about $110,000, and that's about what his mortgage will cost.
In other words, it cost the City at least $260,000, if not more, to obtain the house and renovate it. They then sold it via a mortgage for $110,000. Good for Mr. Horride, not so good for the average taxpayer in Detroit and points beyond.
Bing said he's proud that his signature program that has invested $5.5 million to help keep Boston Edison from crumbling is helping to allow Horride to move into a renovated home.
With $5.5 million to draw on, at this rate they'll be able to fix up all of 21 houses in Detroit. Mr. Drop, please meet Mr. Bucket.
The city is, of course, using taxpayer money on the program, including Federal funds, to give others these deals on houses.
The qualifications to get such a house are, shall we say, a bit subprime:
Applicants looking to purchases homes like the ones being renovated in Boston Edison must have an average credit score of 620 or better, eight hours of homebuyer's education and income at or below 120 percent average median income.
The average median income in Detroit is $26,098, that makes the payment on a 30 year fixed mortgage of $110,000 about $540 per month, or 25% of monthly income -- but the deal specifies they'll give mortgages to people below the median income.
What could possibly go wrong?