Vol 17, No. 38
Staff taking advantage of Penn home grants
THOMAS J. WALSH
STAFF WRITER
A University of Pennsylvania incentive program aimed at encouraging faculty and staff to buy homes in West Philadelphia's University City has resulted in dozens of sales and hundreds of 'inquiries.
Penn's program provides an upfront $15,000 cash grant or $3,000 a year for
seven years to any faculty or staff member who buys a home in University
City and agrees to live there for at least seven years.
Since April, 63 houses have been sold under the program, and some buyers have already reached the settlement table and moved into their new homes. Hundreds have asked for more information.
"It's just been overwhelming," said D-L Wormley, Penn's managing director of community housing. "It literally is people from every part of the university - professors, the housekeeping department, a vice president, the physical plant. And that's the thing I'm most thrilled about."
And what's good for Penn is good for West Philadelphia's residents, the banking community there, local construction contractors and neighborhood real estate values.
Womley said that, for now, 150 homebuying grants and 150 cash grants for exterior home improvements are in the budget, but that "as we approach that number, I'll go to the trustees with what we have."
The cash grant program has been a booster to Penn's 30-year-old mortgageguarantee program, which lets potential homebuyers borrow from traditional lenders without putting anything down.
It's like a Veteran Administration loan without the hassle, Wormley said.
"It isn't the mortgage payment that keeps people from buying a home, it's the down payment, the closing costs, etc.," Wormley said.
What's more, buyers in the program can now borrow up to 120 percent of the price of their homes, in a special arrangement Penn has worked out with area banks. The extra financing is intended solely for permanent home improvements.
The older program was simply coasting until the new cash incentives kicked in. For all of last year, only 36 buyers used the Penn mortgage option. That number has almost been doubled this year in just the seven months that the new program has been up and running, and applications continue to roll in.
"The mortgage program is the main reason I and my family are here," said Al Filreis, an English professor who bought a "mid-100s" twin in the 4600 block of Osage Avenue. "It was the edge needed to make the decision that we at heart wanted to make."
Filreis said that houses in the program are becoming hard to come by, a point confirmed by Wormley. Even as a pioneer in the program, Filreis made a full-price offer immediately on his house, knowing others wanted it. "That's a significant change for West Philadelphia," he said.
Filreis took full advantage of the existing program and the new one, accepting - and already spending - the $15,000 cash grant for a fully finished basement, and taking out a 120 percent mortgage from Commerce Bank for other major work. His interest rate is "between 6 and 7 percent."
"First and foremost, we did [the renovations] the right way because we had the money to do it, and secondly we did it all at once, which is the best way to do it," he said. "Third, we, along with others in the late spring, were engaging contractors and subcontractors, all of whom are from this immediate area. It must've been a boon-det for the local construction trade."
Part of the new program includes cash for faculty and staff already living in the area bounded by Market Street, 49th Street, Woodland Avenue, University Avenue and the Schuylkill River: Penn is offering up to $7,500 in matching funds toward exterior home improvements.
The new incentives "translate to more people on the street, and more taxpayers, and that in turn enhances the city tax base," said Paul Steinke, executive director of the year-old University City District, a nonprofit corps of streetscape cleaners and urban "ambassadors" modeled after the Center City District.
Penn's mortgage guarantee program, in all its forms, stands at about $22 million outstanding, Wormley said.
Document URL:
http://www.writing.upenn.edu/~afilreis/mortgage-plan-article.html
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modified: Friday, 06-Aug-2004 09:57:08 EDT