Hardest Hit Fund brings more dollars to Detroit and Michigan to reduce foreclosures, fight blight

Hardest Hit Fund brings more dollars to Detroit and Michigan to reduce foreclosures, fight blight

by Marge Sorge and M. Lapham

Inside the Michigan State Housing Development Authority (MSHDA) headquarters in Lansing there’s a room with four 8-foot walls filled from floor to ceiling with thank you notes and family pictures from people the agency has helped avoid foreclosure or pay outstanding property taxes or condo fees.

“It is a gentle reminder for our staff and me as to why we do this,” says Mary Townley, director, MSHDA Homeownership Division.

There will be more cards and pictures coming soon. MSHDA now has an additional $74.5 million from the U.S. Department of Treasury’s Hardest Hit Fund to reduce foreclosures and clean up blight.

MSHDA’s Step Forward Michigan program has spent the last five years saving the homes of thousands of families. In July 2010 Michigan received $498.6 million in federal Hardest Hit Funds (HHF) in response to the housing crisis that led to an unprecedented decline in home prices and high unemployment.


In 2013, help to pay outstanding property taxes and remove blight was added. Detroit received blight removal assistance along with four other cities including Flint, Pontiac, Saginaw and Grand Rapids.

Since the program’s inception, more than 30,000 households no longer have to struggle to find a new place to live thanks to more than $273 million in mortgage assistance to avoid foreclosure.

Homeowners who find themselves up against mortgage problems due to unforeseen hardship should use the Step Forward Michigan online application portal. It closed on December 31, 2015, but with the new infusion of $18.6 million it will be up and running again for applicants next month.

Townley has been to many of the hardest hit neighborhoods and MSHDA has a network of counselors to help guide eligible homeowners through the process. In addition, it is working with block clubs to get the word out, sometimes at meetings in church basements. Property tax delinquency is the biggest issue.

“We can help them right then and there,” she says.

MSHDA also has bi-lingual staff members and information is provided in Spanish, French, German and, of course, English. Some is translated into Arabic.

There is one big problem. Sometimes applicants get the forms and neglect to send them back. If they can’t apply online a postage paid envelop is provided. MSHDA reminds them a few times but then has to let it go.

“We want to encourage homeowners to reach out for help,” she says. “We can’t help unless you tell us you need it.”

Now, with the new dollars, more can be done to keep people in their homes as well as fight blight.

“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,” Governor Rick Snyder says.

Since the Blight Elimination Program was introduced in 2013, blight has been removed from 8,651 properties in Michigan at a cost of $132 million. In Detroit it’s been removed from 5,498 properties.


Michigan is dedicating 75 percent of the additional $74.5 million it just received to clean up blight and the remaining 25 percent to keep people in their homes with mortgage assistance. This time only two cities get blight assistance. Detroit gets get $41.9 million and Flint $13.9 million. These two cities have the largest concentration of blight in the state.

On April 20 the State of Michigan was awarded $188 million in new blight removal funding from the U.S. Treasury Department. It was the most of any state in the country.

Detroit’s share of this new funding is yet to be determined, but Mayor Mike Duggan says “it is likely to be far greater than the $42 million recently awarded to the city out of the state’s $75 million share. This will allow us to increase our pace of demolition from 4,000 houses last year to 5,000 this year and 6,000 next year.

“A great deal of the credit for this success goes to (MSHDA Executive Director) Kevin Elsenheimer and Mary Townley from Michigan State Housing Development Authority, who authored Michigan’s application, which was ranked higher than those of all other states that applied,” he says.

Each city must have a strategic plan to clean up blight that includes a budget and which neighborhoods will benefit. It is up to each city to negotiate with contractors. Once the program starts it must be finished in 18 months.

“That helps us reach our spending plan timeline,” Townley says.

Michigan has until December 31, 2020 to use all the dollars provides in the new round of funding.

There should be even more money on the way. In February, the federal government announced an additional $2 billion investment in the Hardest Hit Fund. The dollars are allocated among participating states in two phases of $1 billion each. The new funding for Michigan was from the first of those two phases.

MSHDA has applied for a second phase. This not only would mean more people and more communities can be repaired and homes still lived in, but now can be expanded even further across the state.

Townley expects to hear from the US Treasury by the end of April or early May.

“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,” says Elsenheimer. “They will be greatly appreciated by the citizens and communities that may still be lagging behind.”

That’s certainly apparent by looking at the wall at MSHDA. It also says something about Michiganders. We remember to say thank you.





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