Detroit records roughly 1,000 land contracts a year. A new report says buyers need more protection.

Detroit has averaged roughly 1,000 recorded land contracts per year over the past two decades, even as traditional mortgage lending recovered from the Great Recession. A new report from Detroit Future City finds 17,688 land contract transactions in the city since 2008 and calls the financing tool a "permanent fixture" of Detroit's housing market.

The report, funded by the Rocket Community Fund and produced with Data Driven Detroit, analyzed records from the Wayne County Register of Deeds and supplemented the data with interviews and focus groups. Researchers acknowledged the 17,688 total is likely an undercount. In 2024, Detroit recorded 4,309 mortgages and 934 land contract deeds.

A land contract is a legal arrangement in which a buyer makes payments directly to a seller over time and does not hold the deed to the property until the full balance is paid. That structure creates risks that conventional mortgages don't. Michigan law does not require sellers to prove they hold clear title to the property. It does not require contracts to include basic terms such as the names and addresses of buyers and sellers. And when a buyer falls behind on payments, a seller can use a faster forfeiture process to reclaim the property, leaving the buyer at risk of eviction and the loss of all accumulated equity.

"On the flip side, this is a financial product that has very few regulations or oversight in Michigan," said Libby Benton, director of the Michigan Poverty Law Program. "The state laws are very thin."

Benton said land contracts can be the only path to homeownership for many Detroiters who don't qualify for traditional loans. They're common among first-time buyers with limited savings, bad credit, irregular income, or debt, and among buyers seeking homes that banks decline to lend against. The problem, she said, is that the product lacks the regulatory backstop that makes mortgages safer.

Immigrant communities face particular exposure. Detroit Future City found a high concentration of land contracts in those neighborhoods. Anika Goss, CEO of Detroit Future City, connected that pattern to the current political climate.

"Today, where we're seeing a lot more discriminatory and targeted policies towards foreign-born and immigrant residents, new residents to Detroit, we're now also seeing a high concentration of land contracts in those communities, where this is a form of stable housing finance for families that may not be able to qualify for a mortgage," Goss said.

A 2024 fact sheet from the Pew Charitable Trusts found Michigan led the country in recorded land contracts between 2005 and 2022.

Goss said the Detroit Future City report is intended as a foundation for policy work. "All of these issues around safe, affordable, stable housing for families, you can't actually create the policies unless you actually have the data," she said.

Benton called for legislative action. "The use of these products isn't going away, and we do need legislators to step up and work with folks to craft some thoughtful reforms to make these a safer product," she said.