The nation’s largest mortgage lender, Rocket Mortgage, has just rolled out a home loan program exclusively for customers buying homes in Detroit.
The goal of the so-called “Detroit Home Loan+” is to help more Detroiters own a home in Detroit, where the company has been headquartered for more than a decade.
Rocket Mortgage (formerly Quicken Loans) has been a major player in revitalizing downtown Detroit, which had been one of the hardest cities in the country during and after the Great Recession.
This new initiative supports with the company’s mantra of “for-more-than-profit.”
What Is the Detroit Home Loan+?
- Mortgage program offered exclusively to home buyers purchasing in city of Detroit
- Comes with up to $2,500 in closing cost credit if buying a primary residence
- Borrowers can also take advantage of pre-purchase mortgage counseling from the Detroit Housing Network
- Those who are unbanked and/or credit invisible can work with fintech MoCaFi to improve their finances
In a nutshell, Detroit Home Loan+ is a new program offered by Rocket Mortgage that provides $2,500 in closing cost credits for those buying a home in Detroit.
It exists because less than 47% of Detroit’s residents own homes, a number that is well below the national average of around 66%, per the Census Bureau.
Simply put, the program incentivizes homeownership vs. renting in Motor City (maybe now better known as Mortgage City), which can be a positive for both the individual and the larger community.
Aside from the closing cost credit, it also offers pre-purchase mortgage counseling via the Detroit Housing Network to prepare buyers for homeownership.
And those who lack a bank account and/or need help with their credit scores can enlist the services of black-owned fintech MoCaFi.
One thing MoCaFi can do right off the bat is get rental payments (and additional data) included on a consumer credit report, a move that can boost credit scores.
This is similar to Experian Boost, which adds recurring utilities and other monthly payments
onto your credit report so you can earn credit (literally) for them.
All of these measures can make it easier to get approved for a mortgage, and maintain homeownership after the fact.
Who Qualifies for Detroit Home Loan+?
- Those buying a primary residence in the city of Detroit
- Must use a conventional, FHA, or VA loan
- Must qualify for a mortgage otherwise and use Rocket Mortgage
- Jumbo loans, Charles Schwab loans, team member loans, and portfolio loans aren’t eligible
First and foremost, you must be purchasing a home in the city of Detroit to get the $2,500 closing cost credit, which comes in the form of a lender credit.
Additionally, the property must be your primary residence, not a second home or investment property. Both condos and single-family homes should qualify.
Obviously you have to use Rocket Mortgage to get your home loan, and you need to qualify a mortgage otherwise.
In terms of eligible mortgage types, you can combine this offer with a conventional loan backed by Fannie Mae or Freddie Mac, an FHA loan, or a VA loan.
Those using a jumbo home loan, Charles Schwab loan, team member loan, or portfolio loans are not eligible for the closing cost credit.
My assumption is you can take advantage of the other services, like the mortgage counseling and bank/credit-related stuff from MoCaFi, either way.
Is Detroit Home Loan+ a Good Deal?
While the initiative overall sounds like a win for the city of Detroit, Michigan, individual home buyers should still shop around and obtain several mortgage quotes.
As mentioned, you should still be able to get free access to mortgage counseling via the Detroit Housing Network or other agencies.
And MoCaFi is a standalone company anyone can use to bolster their finances and credit history.
Ultimately, you’re looking at the $2,500 closing cost credit, along with the service provided by Rocket Mortgage versus other banks and mortgage brokers out there.
If Rocket can provide you with better service and a cheaper mortgage once the $2,500 in credits is factored in, it could be a win-win.
But if there are other banks or brokers out there that can beat them on rate and closing costs, you might want to go with one of those alternatives instead.
(photo: Bernt Rostad)