Community Housing: A Report on the Expanded Program
From a presentation to the Trustees by Diane-Louise Wormley, Managing Director, Community Housing
For almost 40 years Penn has made formal efforts to increase the number of faculty and staff living in its immediate environs, notably through the Guaranteed Mortgage Program adopted in the Harnwell administration. Beginning with a then-unique program helping employees secure 100% mortgages in the area known as University City, the program was periodically expanded both financially (as 100% went up to 105%-and with one lender, up to 120%) and geographically, so that it now covers all of West Philadelphia*.
Last year the program took a giant step with the adoption of a financial incentives program for first-time buyers and a home improvement incentives program for existing ones (see details in the presentation below, and in Almanac March 31, 1998). Last year the University also named D-L Wormley, the longtime coordinator of the Guaranteed Mortgage Program to a wider role as Managing Director, Community Housing. At a meeting of the Trustees' Committee on Neighborhood Initiatives February 18, Ms. Wormley gave the first progress report on the program as now configured. The following is from her slides and notes.
These began with a notation that prior to the latest enhancements...
...University City was a neighborhood under stress. On some residential blocks the home- owner rate had fallen as low as 12%. Owner occupancy of units declined by 12% between 1980 and 1990, and continued downward in the current decade. The number of Penn affiliates buying in the community declined to 11 purchasers in 1997, compared to 18 purchases in 1995 and 19 in 1996.
The University has responded to the stress by developing several programs I will outline here--the Single Family Rehab Program, the Enhanced Mortgage Program, a Home Improvement Program for current owners, and an Education and Counseling Program that includes a schedule of homebuyer and homeowner workshops and counseling sessions.
Single Family Rehab Program
In this program we set out to retain stability on key blocks through targeted acquisition, rehab and sale of single family housing. Typically, we were approached by neighborhood organizations or block groups in situations where an otherwise viable block was put at risk when one or two houses were lost to fire or became unoccupied and began to deteriorate, threatening decline for the surrounding homes.
To date, Penn has acquired 15 properties in Phase 1 of this program, and has rehabilitated them or has work in progress to do so. Five have been sold, six are under construction (with two of these under agreement of sale), and four are in the design stage. Homes rehabbed through this program have sold at prices ranging from $89,000 to $150,000..
Enhanced Mortgage Program
Under the traditional Guaranteed Mortgage Program, which remains in place, the University's role is to act as guarantor only, certifying to the lending organization that the buyer is a Penn employee in good standing, and pledging to make good on the mortgage in the unlikely event of default.
More recently we obtained special financing to enhance this program so that we can now provide financial incentives in addition to acting as guarantor. Faculty and staff of the University and the Health System have the option to receive $15,000 up front, or $21,000 over seven years when they buy a home in University City.
The reception to this program has been dramatic. Since the adoption of the enhanced program there have been 90 sales in ten months (55% of them to staff, 24% to faculty and 21% to health system employees). More than 60% of those buying homes were previously renters in University City. Homes ranged in price from $27,000 to $264,000, with a median price of $91,380 and an average price of $102,116.
The total mortgage commitment between 4/1/98 and 12/31/98 was $9,029,030, with five additional loans closed in January totalling $627,000. \
Home Improvement Program
But what of those who had already made the investment to buy in University City?
For these owners we developed an incentive program that would also help improve the neighborhood: we offer matching funds of up to $7500 to existing Penn home owners in University City who undertake exterior improvements. To date, 56 current homeowners have registered for the program, indicating expenditure of more than $250,000 of their own funds towards home improvement projects, and Penn has provided $211,000 in matching funds.
The results of these initiatives, and of the services set up to help faculty and staff take advantage of them, is this new picture of the University City Real Estate Market:
1997 62 houses/condos sold in University City 1998 126 houses/condos sold in University City (75% are 4+ bedroom houses) 1997 # of days on the market = 154 1998 # of days on the market = 145 1997 average sales price = $83,518 1998 average sales price = $99,074
Education and Counseling
Our various mortgage services now provide potential and existing homeowners with access to counseling, technical assistance, databases of contractors and sources of funding for home ownership and home improvement. More than 400 Penn affiliates participated in the mortgage workshops and/or counseling sessions held between April and December 1998.
And more sessions are set for the spring term. (all of these are in 720 Franklin Building, 3451 Walnut Street, at noon and and again at 1 p.m. on the dates shown; see the gray box for two other opportunities that Penn members can take advantage of this spring.)
March Workshops
- Asbestos Awareness, March 9: What you need to know about the hazards of asbestos in your home and the removal process, by Randall Cone of R. Cone Environmental Services.
- Title Insurance and Settlement, March 16: One of the last big steps before you get the keys. What it means to have an executed search for clear title, how to prepare for closing, etc., by Florence Selvin of SearchTec Abstract.
- Homeowner's Insurance, March 23: The different types of insurance and what you need to ensure the proper coverage of your investment, by Suzie Peterson of Erie Insurance.
- Hiring a Contractor, March 30: Are you getting what you paid for? Do you know if this guy is safe? What are his responsibilities? How do you arm yourself against potential cons and gimmicks? These and other important questions are answered by Ken Scott of B.A.S. Consolidated.
April Workshops
- Family Budget Workshop, April 13: Planning for your family's future, determining your goals, planning to save, how to set up a spending plan, knowing your resources, finding out where the money goes now, ways to reduce expenses, setting up a savings plan, and sticking to it, by Cindy Bass of the West Philadelphia Partnership CDC.
- Home Buying Seminar, April 20: Advantages of home ownership, home buying procedures, shopping for a home, financing, cost of home ownership, how much money can you afford, how much money will you need, what if you have credit problems, where do you go from here, what happens after you move in, by Lamar Kendriks of White Rock Community Stabilization Project, Inc.
- Credit Counseling and Repair, April 27: How to repair damaged credit; common myths about credit, what banks consider in making loans; credit scoring, credit reports, and sources of credit and their differences, by Sulaman Rahman of the Housing Association of Delaware Valley.
For workshop registration visit the website www.business-services.upenn.edu/communityhousing/
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* For a time, purchases in parts of Center City have been eligible for the Mortgage, but that portion of the program ends March 31, 1999, Ms. Wormley said after the Trustees meeting.--Ed.
Almanac, Vol. 45, No. 23, March 2, 1999
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