Last week, city officials announced a $5 million, five-year initiative to increase Cincinnati's disheartening homeownership rate by allowing borrowers to qualify for higher loans if they can prove they will earn additional income via money saved from commuting costs.
The program, called Downtown Walk to Work, is sponsored by the private leveraging firm Fannie Mae and hopes to help low- to moderate-income families qualify for mortgages and to lure suburbanites downtown. If borrowers can prove they save additional income by walking to work, they can qualify for a larger loan.
"Hopefully (the money) will pay for 50 people with $100,000 mortgages," said Kerri McClimen, director of communications for Fannie Mae's Midwest Regional Office.
Cindy Flaherty, director of the Central and Southern Partnership Office for Fannie Mae, said 50 was an approximate number because not all of the housing will be $100,000 homes. The program aims to support affordable and market-rate housing.
To qualify for one of the Fannie Mae loans, the home must be located in the downtown area bound by Interstates 71 and 75, Liberty Street and Fort Washington Way. Plus, borrowers must live within approximately 10 blocks of their place of employment.
How much will it boost the city's homeownership rate?
This program will be a "catalyst for an increase in homeownership," McClimen said, adding that determining the program's direct affect on the percentage of homeowners would be impossible because of emigration factors.
"Cincinnati has very low homeownership," McClimen said. "Fannie Mae hopes to create new innovative homeownership opportunities and make them more available and accessible."
Where is all the downtown housing?
"There is housing currently being built around Central Parkway, Court Street and Mound Street," said Sister Judith Martinez, associate director of Working in Neighborhoods (WIN), a local non-profit organization that's been involved with Fannie Mae since 1986 and is providing counseling and education for qualified borrowers.
Martinez laughed when asked if downtown apartments would be suitable for families the program hopes to recruit and said the aforementioned housing is single-family detached homes and that the Cincinnati Metropolitan Housing Authority currently is developing single-family homes.
How much housing is available in the target area?
"I have no idea," Martinez said, pointing out that the real estate market is in continuous flux. She did mention that a study was completed in the early stages of negotiations with Fannie Mae that showed housing did exist downtown.
"The study also found that seven similar loans had been made in suburban areas," Martinez said, "and that there was a lack of loans for people wanting to live downtown."
Flaherty said that not many homes exist in the target area but Fannie Mae and the city are anticipating more home construction there in the next three years.
"If (the program) is successful, (Fannie Mae) will continue the allocation past five years," she said. "This is an example of what Fannie Mae will be able to do in Cincinnati over the next three years."
And homes don't necessarily translate into houses. When the program projects to support 60 to 70 mortgages, it means mortgages for homeownership units -- condos, apartments, townhouses and possibly some houses.
"The point is to purchase something you intend to live in," Flaherty said. "If you want to use the Walk to Work program, you go to the lenders associated with the program to see if you qualify."
Who was consulted in determining the target area?
The site was determined through meetings with various non-profit organizations, community groups, construction companies and the mayor, McClimen said, but isn't set in stone. WIN played a major role in determining where the program would be implemented, Martinez said.
"The people there never had an opportunity to purchase a home before," Martinez said, adding that if the initiative proves successful, similar opportunities could be in store for Avondale, South Cumminsville, Northside and Winton Place.
