MHA, DLBA reach settlement regarding improper invoicing for Hardest Hit Fund demolition work

Detroit Land Bank to pay additional $5 million, plus investigation costs

Media Contact: Katie Bach
517-335-4786 | bachk@michigan.gov
 
June 22, 2017
 
Lansing, MICH. – The Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA) and Detroit Land Bank Authority (DLBA) have reached a settlement concerning invoices that were improperly submitted for repayment by the city’s demolition program.

MHA, the entity created by the Michigan State Housing Development Authority (MSHDA) to administer funds from the U.S. Department of the Treasury under its Hardest Hit Fund (HHF) program, and DLBA agreed on a total reimbursement amount of $6.37 million, not including the costs of the investigation. The settlement includes a forthcoming $5 million payment in addition to the $1.37 million that the land bank repaid earlier this year to address improper expenses identified by auditors.

“I am pleased both parties were able to reach a resolution without incurring the added costs of an arbitrator,” MSHDA Executive Director Earl Poleski said. “The new protocols and procedures put in place over the past several months have improved programmatic operations, allowing us to move forward in a business-like fashion to support the new direction of the land bank and the important work being done to reduce foreclosure and revitalize neighborhoods in the city.”

The demolition work is critical to the safety, stability and vibrancy of Detroit and its neighborhoods. As of May 31, 2017, MHA had disbursed more than $119 million to the land bank for demolition and related activities on 7,488 abandoned, blighted properties. More than $139 million remains from the more than $258 million awarded to Detroit’s program since 2013.

“Michigan was the first state in the nation to use a program of this type in response to the foreclosure crisis,” MHA Vice President Mary Townley said. “We are stabilizing Detroit’s neighborhoods and making them safer than they were in 2013. Reducing blight and increasing property values is not just good for Detroit, but good for the entire state.”

While the settlement concludes months of investigation by MHA, its independent auditors and legal counsel, it does not affect any other investigations into the city’s demolition program that remain ongoing.


The Michigan State Housing Development Authority (MSHDA) provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low- and moderate-income residents and to engage in community economic development activities to revitalize urban and rural communities.*
 
*MSHDA's loans and operating expenses are financed through the sale of tax-exempt and taxable bonds as well as notes to private investors, not from state tax revenues. Proceeds are loaned at below-market interest rates to developers of rental housing, and help fund mortgages and home improvement loans. MSHDA also administers several federal housing programs. For more information, visit
www.michigan.gov/mshda