Governor Gretchen Whitmer signed a law Monday that will help low-income families avoid home foreclosures for unpaid taxes.
The law allows local governments to forgive penalties and interest for families that meet an income test.
That would make it easier for homeowners to set up a payment plan to become current on their tax bills.
Detroit Mayor Mike Duggan lobbied for the legislation. It could help thousands of homeowners in his city.
“Almost everybody who’s in arrears has got significant interest and penalties that have accumulated. What this does is wipe out those interest and penalties. That’s a whole lot of folks,” he says.
The governor signed the bill in Detroit, where the county since 2008 has foreclosed on a third of all properties for overdue taxes. But she says other communities may also participate in the program.
“This is a statewide program that is going to ensure that families can stay in their home as they pay – stay as you pay,” she says.
Governor Whitmer says this is also a good deal for cities and their residents because foreclosures reduce the value of neighboring properties.
The law also lets local governments cap the homeowner’s debt at 10% of the property’s taxable value.
The governor says this is also good for other homeowners whose property values decline as a result of foreclosures nearby.