Homes in Detroit are being auctioned off for as low as $1,000, with a catch: the new owners must renovate the homes into livable conditions within six months, Business Insider reports . The program, from the Detroit Land Bank Authority (DLBA), intends to restore many of the run-downed homes in the city to a usable state.
Bidders can make offers through the DLBA online platform, Auction . According to Alyssa Strickland, the DLBA's public information officer, the goal of the program is to encourage residents who are currently renting to invest in the community by becoming homeowners, and has sold 3,304 homes since the program’s inception in 2014.
"It's important to us that we aren't selling to real-estate speculators," Strickland said on Business Insider. "Our programs are designed to be for people who want to be primary residents."
After six months of ownership, a compliance officer will deem whether or not the home is livable, and if it is, complete ownership will be transferred to the winning bidder.
Other programs in Detroit, such as the Detroit Home Mortgage program (DMH), are also seeking to improve homeownership rates in the city. The DMH is working to increase homeownership in the city by lending qualified buyers the money needed to both purchase and renovate homes in the city. DMH borrowers can receive two loans: for the appraised value of the home and the second for the gap between the home's sale price and its appraised value, while also covering the cost of renovations.
Despite the assistance of programs like the DMH and the DLBA’s Auction, Detroit is still facing a foreclosure crisis . According to GOBankingRates and data from Zillow, 34.4% of homes in the city are currently underwater, and the median home value at the Detroit-Warren-Dearborn metro-area level is $161,300, far below the national median of $226,300. GOBankingRates puts Detroit second on its list of U.S. cities most likely to enter a housing crisis.