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Comerica Bank to invest $5 million into Detroit Mortgage Program

The Detroit Home Mortgage program gained a $5 million investment from Comerica Bank to beef up its effort to address the city’s appraisal gap conundrum.

With many Detroit homes getting low appraisal values, potential home buyers are having a hard time obtaining financing for purchase and renovation costs. Because of this, mortgages went to just 19 percent of 3,800 Detroit home sales in 2016, with most going to affluent neighborhoods such as Indian Village, Rosedale Park and Palmer Woods, Crain’s reported in March. The $40 million Detroit Home Mortgage initiative was launched in 2015 to offer buyers a second mortgage option.

Comerica will also become a participating lender with the program at a later date, joining five other lending institutions including Troy-based Flagstar Bancorp Inc. and Grand Rapids-based Independent Bank Corp.

“Our investment is being made to assist the city and its residents in overcoming the current challenges of home mortgage financing due to low appraisal values,” spokeswoman Kathleen Patton said. “Unlike traditional investments, the return we expect is the ability of Detroiters and prospective Detroiters to successfully finance the purchase of their homes in Detroit.”

The Dallas-based bank announced in January that it would invest $3 million in Detroit to open new locations and relocate offices.

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