Federal Funds Fight Michigan Blight

A $75M Treasury Department grant will be divided among 12 Michigan cities looking to redevelop vacant or dilapidated buildings. Learn how federal funds continue to support recoveries from the housing crisis

What Happened?

Twelve cities in Michigan will split $75 million in federal funding to fight blight with programs to redevelop vacant and dilapidated buildings. The $75 million comes from U.S. Treasury Department, funding dedicated to rebuilding communities with new housing projects.


In 2010, the Treasury Department awarded the state of Michigan $498 million as part of the Hardest Hit program. The $75 million now being used in 12 cities statewide comes from this funding and will distributed to programs helping rebuild communities seriously damaged by the housing crisis of 2008.

The Michigan State Housing Development Authority selected the 12 participating cities based on residential vacancy rates, economic activity and other metrics. The MSHDA is meeting with officials from all 12 cities to discuss the next steps including:

  • Submitting strategic blight remediation plans
  • Designating at-risk areas within city limits
  • Estimating project costs
  • Establishing a timeline for the work

The effort to combat blight has been an ongoing struggle in many Michigan communities for several years. The federal funding will help local governments:

  • Slow foreclosures
  • Stabilize property values
  • Revitalize economies

In addition, more than 22,000 Michigan families have received assistance through the state’s Step Forward Michigan program first launched in 2013. The program offers forgivable loan programs to homeowners suffering financial hardship. The program benefits include:

  • Mortgage payment assistance for homeowners receiving unemployment compensation
  • Rescue funds for homeowners who have fallen behind in their mortgage payments or past due property tax payments
  • Federal matching funds for principal reductions for homeowners who can no longer afford their mortgage payments as a result of reduced income

The $498 million from the U.S. Treasury is also supporting Step Forward Michigan programs.

Hardest Hit

The U.S. Department of Treasury first announced the Hardest Hit Fund in 2010 when $7.6 billion became available to communities in 18 states most severely impacted by the housing crisis. The funds help local governments and agencies develop programs to assistant homeowners and reboot economic activity.

The grants provided through the Hardest Hit Fund are administered by each state’s Housing Finance Agency, and typically target unemployed homeowners behind on their mortgages. As of June 30, 2014, there were 70 active programs across the 19 housing finance agencies awarded funds.

About 66 percent of the program’s funds have been allocated to unemployed and underemployed homeowners through reinstatement programs. The remaining funds have been distributed across short sale assistance programs and loan modification assistance programs helping homeowners maintain their properties and avoid foreclosures. States have reported committing $4.1 billion of their program funds toward these programs, accounting for about 60 percent of total funds available.

Thanks to housing assistance programs — such as the Hardest Hit Fund – and other economic revitalization strategies, many communities have started to rebound from the economic downturn. The Fannie Mae September 2014 National Housing Survey revealed Americans’ attitudes toward housing in September improved.

About 68 percent of Americans believe it is a good time to buy a home, up 4 percent from August. In addition, 66 percent would prefer to buy a home on their next move, up 3 percent month-over-month. Forty percent of those surveyed said the U.S. economy is on the right track, a 5 percent improvement from August.

Affording Housing

Gov1 has reported on several affordable housing projects across the country, as well as programs to address housing shortages with innovative strategies.

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