U. Enhanced Mortgage Program expands boundaries

Penn's Office of Community Housing announced this month that starting in April, it plans to expand the Enhanced Mortgage Program -- a program that offers forgivable loans to University and University Health System employees who decide to move into the surrounding geographically designated areas.

The change in the program is two-fold. First, the geographic boundaries originally set by the program are being extended. The new borders reach out westward to 52nd Street, northward to Haverford Avenue, and eastward and southward to the Schuylkill River. The old boundaries extended only to 49th Street, Market Street and Woodland Avenue in the west, north and south, respectively.

The second alteration of the program consists of a reduction in the maximum size of the loans available to those participating in the program from $15,000 to $7,500.

The forgivable cash loan "can be used for a down payment, to buy down points, or for interior or exterior home improvements," according to the program's policy. The loans are forgiven after seven years on the condition that the purchaser remains in residence during that time.

For Penn employees already in the area and meeting certain financial criteria, the program will loan $7,500 for home improvement.

Due to the changes being implemented, the program was temporarily suspended for a two-month period at the beginning of February. The moratorium prevented any new loans from being issued over that time period, but all operations are currently in the process of returning to normal.

"We knew [the program] was going to be expanded. We couldn't have an overlap -- it would be too confusing," Director of Community Housing Stefany Jones said. "We slowed down on this one end while we re-engineered and made it better on the other."

The program has been heavily utilized since its creation -- 386 home purchases were recorded between 1998 and 2004, with an additional 146 participating in the home improvement initiatives in those same years.

"I think what will happen is we will stabilize the neighborhood," Jones said.

Others involved in community development, like Partnership Community Development Corporation, discussed the success and generosity of the program.

"Typically, the clients we have seen from UPenn were in the moderate guidelines, which are set up by the" U.S. Department of Housing and Urban Development, said Michelle Kerr Spry, director of community services for Partnership CDC.

But some point out that despite the admitted successes of the program, it has also inadvertently facilitated the "pricing out" of many of the local residents, causing intense resentment towards the University.

"People who grew up in the area can no longer afford to live in it," said Grace O'Donnell, treasurer of O'Donnell Real Estate in West Philadelphia.

The people being priced out "are educated people, often with master's degrees," and many work in the city's public sector, she added, pointing specifically to public school employees.

The program stands as one of many Penn initiatives that have been seen as having both beneficial and adverse effects on the surrounding community. Over the past decade, many initiatives -- including the mortgage program and the Penn partnership public school -- have caused a boom in the prices of University City real estate. This in turn has caused much dismay within the neighborhood's residents, who are often forced to move to the periphery of the neighborhood, where prices have not drastically increased.

O'Donnell stressed the direct influence that such a mortgage program has on the price of the housing stock. "If Penn hands you $7,500 to purchase the house, functionally, they have increased the price of that house by $7,500," she said.

Penn officials note, however, that it is not their intention to force people from the neighborhood. But, the program gives the Penn-affiliated buyer a clear advantage in the real estate market.

"If two buyers are competing for the same house ... the Penn buyer is already $7,500 ahead," O'Donnell said. "If there is a bidding war, the Penn buyer is going to win."

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