This story is part of Beyond Repair, a series on Detroit’s home repair crisis — and what the city stands to lose if it doesn’t take action. Read all the reporting. 

After 10 years and just $16.7 million in repairs — a sliver of what’s needed to fix Detroit’s aging homes — a city-backed home repair loan program is shut down for an overhaul. 

That means one fewer option for homeowners desperate to fix leaky roofs and ancient plumbing — even as Mayor Mary Sheffield’s new administration said it plans to prioritize home repair. 

A revamped loan program could play a key role in helping the tens of thousands of Detroiters who live in substandard housing. Private credit is one of the few funding sources with the potential scale to meet residents’ profound needs — if city leaders move aggressively to make loans more accessible. The city rejected more than two-thirds of the households that applied for the 0% Interest Home Repair Loan Program. 

The stakes for Detroiters could hardly be higher: Community advocates warn that Black families could be pushed out of the city because they can’t afford repairs, tearing an irreparable hole in the social fabric of Detroit neighborhoods. 

“Deferred maintenance is a big driver of displacement,” said Josh Elling, CEO of Jefferson East, a Detroit nonprofit that helped residents apply for the city’s home repair loan program. 

“There’s definitely need for a loan product, it just has to be rethought … so we don’t have the same level of loan denial,” he said. 

Forgivable loans? 

Detroit could look to other cities with successful loan programs as a model for its own initiatives. 

Milwaukee resident Adrian Spencer took out a city-backed loan after her insurer threatened to cancel her policy over the deteriorating roof on her 1865 home. 

The loan, through the city’s Strong Homes Loan Program available to Milwaukee homeowners, costs $136 a month over 15 years. At 0%-3% interest, it’s far more affordable than a home repair loan with no city backing: Spencer said a bank quoted her a 5% interest rate. 

The $23,000 she owes will drop to $18,000 if Spencer stays in her home for five years. After four decades in Milwaukee, she said she’s not planning to go anywhere, especially now that the loan helped her install a new roof and gutters. 

“I really can’t express how important it (the Strong Homes program) is,” Spencer said. 

As a deputy director for Rooted & Rising Washington Park, a nonprofit that connects Milwaukee residents to home repair and other resources, she has watched other homeowners benefit: “It is helping a tremendous amount of folks.” 

Milwaukee isn’t the only Midwest city that offers loan programs more generous than Detroit’s paused 0% Interest Home Repair Loan Program. 

In Cleveland, a loan program offers deferred payments to people with the lowest incomes. (This program is also on pause.) In the Pittsburgh area, Allegheny County offers 20-year loans — twice as long as Detroit’s 10-year terms — resulting in lower monthly payments. 

Rico Razo, the city’s chief of home repair and neighborhood services, said a partially forgivable loan structure is under consideration. 

“We have to make sure … that we’re not setting residents up for failure,” he said. “Maybe that looks like a forgivable loan. … I think those are all items that we’re hoping to explore and learn as we try to redesign the 0% program.” 

Loan limitations 

Detroit’s city-backed loan program required applicants to have a credit score of at least 560, home insurance and no property tax debt. That’s a tough bar to clear for many Detroiters and a big reason why the program’s approval rate was just 32%. 

Freyja Harris, CEO of the Coalition for Home Repair, said loans are a useful tool for any city hoping to help residents repair their homes. But it won’t come close to meeting Detroit’s overall need. 

“Low-interest loans are great for moderate-income households,” she said. “But then you are still left with a segment of the population that needs home repair, many of them elderly, who cannot qualify for a loan … because they no longer have a regular income.” 

Some Detroiters are skeptical that loans are a useful tool, since the people most likely to be displaced by home repair problems are least likely to qualify as borrowers.

“A lot of people do not want to take out a loan because they’re afraid that they take out that loan, they get sick” and lose their house “because they couldn’t make them payments,” said Toyia Watts, a community organizer and lifelong eastsider. 

But grant programs — when they are available — have been quickly overwhelmed by demand. Community development advocates say residents should consider loans, especially if they’re facing structural disrepair. 

Beth Sorce, senior director of housing stability at Rocket Community Fund, said the goal should be “good debt” — that is, debt a borrower can reasonably afford — not necessarily zero debt. 

“Part of enabling folks to live a more prosperous life is to make sure that the home that’s being passed down is in good condition, so that it’s an asset and not a drain,” she said. “It’s improving the condition of the home to a higher level than many homes in Detroit are in right now.” 

(Editor’s note: Rocket Community Fund is an Outlier Media funder.) 

Cities and private loans 

City leaders acknowledge that Detroiters are struggling to afford home repair needs — which likely exceed $1 billion — and that coming up with anything close to that much money to help residents won’t be easy. 

Consider: The city used an influx of one-time federal funding — what many hailed as a once-in-a-generation opportunity — to make just $45 million in home repair grants. 

Private loans have the potential to put a larger dent in the problem. From 2022-24, lenders invested roughly $100 million into Detroit through home improvement loans, federal data show. 

The catch? Those loans didn’t go to the people who needed them most: Just 24% of applications led to loans. Successful borrowers’ average income was more than $80,000, double the city’s median household income. 

While cities can certainly invest directly in grants or a loan fund, housing experts said they can also lean on banks to make credit more accessible. 

“There seems to be, unfortunately, an acceptance that the lending industry isn’t going to meet this need,” said Frank Ford, senior policy advisor at the Fair Housing Center, an Ohio nonprofit. “We too often just accept that instead of pushing back.” 

Ford’s research, which focuses on Cleveland, finds that banks are less likely to issue home repair loans to people in predominantly Black neighborhoods, where that city’s home repair needs are concentrated. He said even though incomes are lower in those neighborhoods, many applicants were wrongly denied loans they could afford. 

He argued cities should consider pressuring the financial institutions that hold their reserves to make credit more available. With their large deposits of taxpayer dollars, cities are valuable customers, and the threat to move to a different bank could change lenders’ behavior, Ford said. 

If that approach is the stick, carrots work better, said Kevin Nowak, CEO of affordable housing developer CHN Housing Partners. 

He agreed that many lenders could safely make home repair credit more available to people with lower incomes. “There are common misconceptions around someone having credit challenges in the past resulting in people having a credit challenge today,” he said. 

But Nowak thinks cities will have better luck helping banks to cover some of the risk of such loans. Putting up a portion of the total amount — he suggested 10%-20% — might incentivize lenders to lower their requirements for credit scores and income. 

Detroit’s Rico Razo said both concepts will be on the list as city officials discuss the future of its low-cost loan program with The Ownership Initiative, the nonprofit it contracted to help redesign the loan. 

“Those are the type of questions that we’re going to ask,” he said, saying the city hopes to be “real creative” with the new loan. He hopes applications will reopen next winter.