If you invest in Detroit real estate or have been thinking about it, there’s a program you need to know about right now.
I’ve been working with Metro Detroit investors for over 15 years, across leasing, property management, and acquisitions. I’ve seen a lot of programs come and go. This one is worth stopping and paying attention to.
The City of Detroit just released a Notice of Funding Availability for the ALFAH Section 108 Loan Program. ALFAH stands for Affordable Loans for Affordable Housing. It’s backed by $75 million in federal funding through HUD, and applications open May 22, 2026.
It’s not a grant. It’s a loan program. But the rate gap between this program and conventional financing right now is significant enough to completely change the math on a deal.
Section 108 Rate
Prime Rate Today
I dug into the full developer training guide from the City of Detroit’s Housing and Revitalization Department so you don’t have to. Here’s your plain-English breakdown of everything you need to know before applications open.
What Is the Section 108 Program?
Section 108 is a federal loan guarantee program administered by HUD. It’s available to cities that receive Community Development Block Grant (CDBG) funds, and Detroit is one of them.
In 2025, Detroit applied for and received approval for a $75 million loan pool dedicated to affordable housing development. The City is now distributing those funds to individual developers and investors through this NOFA.
Who Is This Program For?
Before we go further, here’s the eligibility baseline you need to understand:
This is a program built for multifamily investors, portfolio builders, and developers. If you’re looking at a duplex or a single-family rental, this isn’t the right fit. But if you’re working with 4 or more units, or thinking about scaling in that direction, keep reading.
The 4 Loan Products Explained
Federal Compliance Requirements
Because this is federally backed, there are cross-cutting requirements that apply to all borrowers. These aren’t optional, and knowing about them upfront is part of doing your homework.
| Part 58 Environmental Review (all activities) | Davis-Bacon Prevailing Wage (rehab products) |
| Build America, Buy America (BABA) | Section 3: Employment Opportunities |
| Section 504: Accessibility Standards | City of Detroit Executive Order 2024-02 |
| Tenant Retention Requirements (occupied rehab) | Detroit Home Connect & HCV Acceptance |
The compliance load is real. That’s why this program works best for experienced operators who already have a team in place to handle HUD-related requirements.
The Application Process, Step by Step
Approval runs through the City of Detroit, a third-party underwriter, HUD, and City Council. Here’s the full flow.
Timeline at a Glance
Applications open. Rolling NOFA with no hard close date.
First City Council recommendations expected.
First closings projected.
If you want to be in the first wave, getting your application in early matters.
Is This the Right Program for Your Deal?
The City’s own training materials are pretty honest about the tradeoffs, and I think that’s worth sharing directly.
|
Good Fit
✓ Experienced developers familiar with HUD programs
✓ Projects of 20+ units that can absorb transaction costs
✓ LIHTC deals seeking low-cost construction financing
✓ Multifamily projects with healthy income mix to support debt
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Harder Fit
✗ Investors doing 2 to 4 unit deals
✗ Operators without prior HUD compliance experience
✗ Projects that can’t demonstrate debt service coverage
✗ Single-family rental investors
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If you’re not sure whether your deal qualifies, that’s exactly the kind of conversation worth having before May 22nd.
How to Apply
Applications are submitted through the City of Detroit’s Neighborly software portal starting May 22, 2026. For program questions, contact the City directly at HRD108NOFA@detroitmi.gov. You can also sign up for HRD email notifications at detroitmi.gov.
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