$5 million LOAN LOSS RESERVE for only $20 million worth of loans?!!!!------J.P. Morgan Chase to unveil $5.5M program to rehab Detroit homes, help with down payments

J.P. Morgan Chase to unveil $5.5M program to rehab Detroit homes, help with down payments | Crain's Detroit Business:
"J.P. Morgan Chase & Co. will announce today that it has launched a $5.5 million program with Liberty Bank in Detroit to provide home restoration loans and down payment assistance for those buying houses in Detroit through the Detroit Land Bank Authority’s property auctions.
The program is part of $100 million in loans and grants that Chase announced in May to support economic development in the city over five years.
Chase now has put $20 million of the commitment to work on blight reduction, workforce development, home repair and small-business growth.
The contribution will create a $5 million loan-loss reserve fund for Liberty Bank to provide up to $20 million in new rehab residential mortgage loans.
With the reserve fund, Liberty Bank will be able to expand underwriting for rehab loans and provide flexible terms to eligible borrowers who buy a home through the city’s Neighbors Wanted property auction.
Chase also will create a $300,000 down payment assistance fund to be managed by Liberty Bank. Under the fund, eligible Detroit residents can receive up to $10,000 in down payment assistance.
The remaining $200,000 will help Liberty Bank manage the restoration program."