Faculty, staff criticize Penn's mortgage incentive plan

Program encourages University employees to live in West Philadelphia Since 1965, the University's guaranteed mortgage program has offered faculty members and employees a mortgage guarantee of 105 percent on a West Philadelphia house and a 100 percent guarantee on a house in a limited area of Center City. But while Penn employees who live in West Philadelphia say the program has made it easier for them to purchase a home, they also say it is flawed and could be redesigned to make living in the neighborhood even more enticing. The deal, which is available through Mellon Bank or Berean Federal Bank, allows employees to secure a mortgage without making a down payment, according to Diane Wormley, who manages the program for the University. Legal Studies Professor Richard Shell said the program harnesses the University's power as one of the area's largest employers for an important purpose. "Increasing home ownership is the single most key element to increasing a neighborhood's prosperity," Shell said. "And there's no group of employees more likely to buy than employees of the University." Wormley, who lives several blocks away from campus, said the program's first priority is to encourage Penn workers to buy homes in West Philadelphia -- not in Center City. "Contrary to what some people might think, it's not the wild, wild west going past 43rd Street," she said. "There are some lovely homes." The mortgage guarantee is available within the boundaries of Cobbs Creek to South Street in West Philadelphia and 18th Street and Fairmont Park in Center City. The boundaries were extended to the Cobbs Creek area this year to make the program available to employees with lower income levels. Wormley's co-workers who live in West Philadelphia question why the University offers any incentive for people to live in Center City. "I think it encourages a lot of people to live in Center City who would have otherwise lived in University City," Medical School Professor Yvonne Paterson said. Shell and several other local residents want the University to completely restructure its mortgage program to offer greater incentives for people to live near campus. Shell pointed to Yale University's new Home Buyer Initiative program. If Penn were to adopt a similar program, he said, more workers would opt to live in the Spruce Hill area. Under Yale's program, employees get $2,000 a year for up to 10 years if they own a home in New Haven, Conn. The program also extends retroactively for up to five years. Wormley says any program that gives employees financial bonuses to live in West Philadelphia might be perceived as discriminatory by local residents unaffiliated with the University. "It's a real thin line of what you can do and what you can't do," she said. "There's also the question of how it would be perceived by the community." Wormley explained that the University wants to encourage people to become a part of the community, rather than distinct from it. According to the Yale Daily News, more than 70 Yale workers have already joined the school's program in its first year. Penn's mortgage program has more than 125 participants at a given time, according to Wormley. More than 1,300 Penn employees have participated in the program since its inception. Shell said a program administered directly by the University, rather than run through banks, would better serve Penn employees. He said that while the University's guarantee makes it easier for employees to cope financially with their first mortgage, participants have to fill out more paperwork and are subject to the customer service whims of the two banks running the program. History Professor Lynn Lees, president of Penn Faculty and Staff for Neighborhood Involvement, said her group has repeatedly raised its concerns about the mortgage program with University officials. And Carol Scheman, vice president for government, community and public affairs, said the University is re-evaluating the program as a result of the group's efforts. "We're looking at [the program] very strategically with an eye to encouraging people to live in West Philadelphia," Scheman said.