DETROIT (WXYZ) — Owning a home is one of the most traditional ways for people to build the kind of wealth that can last generations. But, too often, that wealth-building route is out of reach for many Detroiters who can't access the equity in their properties because of the sinking values of houses around them and banks that don't see any benefit in the risk.
RELATED: New $5M investment in Rehabbed & Ready program will increase access to financing for Detroit homes
"So when a homeowner today says 'I want to get $20,000 loan to repair my property,' they often struggle because, maybe, the home only appraises for $50,000. So, banks are going to have a hard time lending dollars at that scale," said Laura Grannemann, Vice President of Strategic Investments at The Rocket Community Fund, the philanthropic arm of Rocket Companies.
The Rocket Community Fund and the City of Detroit have partnered together in the project that has already invested millions of dollars in bringing life back to about 90 vacant properties across neighborhoods in ten Strategic Neighborhood Fund zones.
The goal is to increase real estate comparables (comps) in each area to help adjust what Grannemann calls "artifically low" home values. And she said it's working.
"We've seen all very positive feedback because, generally, people have felt stuck in some of those neighborhoods," said Grannemann. "They feel like they've earned the equity that they've built in their homes and, because of factors that they cannot control, that equity is not available to them."
The project is called Rehabbed & Ready, and they're already beginning work on 200 additional houses that will go from vacant to completely restored with everything from new plumbing and electrical to new cabinetry and granite countertops.
"We're trying to transform blocks at a time," said Veronica Johnson who oversees operations property rehabilitation for the Detroit Land Bank Authority (DLBA). "We're trying to be very, very strategic in the way that we're rehabbing." .
The vacant houses belong to the DLBA until they are sold to people who will live in them instead of using them as investment properties for rent.
Money from the sale of each home will be reinvested back into the Rehabbed and Ready project to continue restoring more homes across Detroit.
The goals of Rehabbed & Ready project are to get rid of boarded up eyesores and then enabling Detroiters living in those same neighborhoods unlock their equity.
"So they can refinance or sell if they want to, or buy a new home, upgrade their home. It will allow them the flexibility that they deserve," Grannemann said.
Through the Rehabbed & Ready project, an average of $100,000 is invested into each home to make it in move-in ready for buyers who are often able to purchase houses for about $20,000 less than that investment.
Some homes are selling above $200,000 mark and drawing multiple bids because of their location and the quality of the restoration.
Johnson said the DLBA is also partnering with skilled trades schools and they encourage up-and-coming contractors to work on their properties to gain field knowledge and experience. The DLBA does pay a small stipend to the students.
Click here to find out more about the Rehabbed & Ready project.