New Low Interest Program Helps Philadelphia Homeowners Improve Aging Homes – NBC10 Philadelphia
Middle- and low-income Philadelphia residents whose homes need new windows, doors, and even roofs are now eligible for low-interest home improvement loans under the city’s Restore, Repair, Renew program unveiled Wednesday afternoon.
Eligible applicants would receive a 10 year fixed interest loan at 3% ranging from $ 2,500 to $ 24,999. Unlike most private loans, homeowners only need a minimum credit score of 580 and income of $ 104,880 for a family of four. In addition, residents must have home insurance, be up to date on their utility bills and property taxes, and not have violated the Department of Licensing and Inspections.
“This is something that is needed,” said Philadelphia City Council chairman Darrell Clarke, a Democrat who represents the 5th District. “It will give people the opportunity to participate in, what I call, the most affordable housing program in town – the house you live in.
Restore, repair, renew was launched almost three years after Philadelphia City Council approved a 0.1% real estate transfer tax increase to create a $ 100 million bond. More than half of that money went to clear massive backlogs in Philadelphia home repair programs, and $ 40 million was spent on restoration, repair and renewal.
The idea was to create a sustainable system in which eligible homeowners would repay monthly minimums at a fixed interest rate in order to keep the program going. Participating homeowners would be in touch with financial advisors to help them set up a payment plan that works with their current budget.
Restore, Repair, Renew will be overseen by the Philadelphia Redevelopment Authority, which will collect program data in an effort to better understand Philadelphia’s housing needs, according to PRA Executive Director Gregory Heller.
Over time, people with low credit scores would have the opportunity to rebuild their credit, Heller said.
The loans will come from two lenders – Finata, a non-profit bank, and a Pennsylvania-based bank, Univest Bank and Trust Co. Clarifi and Public Health Management Corp.
“Between that low rate and having these financial agencies on your side, we wanted to put in some safeguards to make sure people go into debt that they can afford,” Heller said.
Part of the impetus to create Restore, Repair, Renew is to strengthen Philadelphia’s middle class and maintain its aging housing stock, half of which was built before 1945, according to Councilor Cherelle Parker, who represents the 9th District.
But not everyone is convinced that Restore, Repair, Renew will be a panacea. Jennifer Bennetch, a resident of north Philadelphia, brought her husband and two children to Wednesday’s announcement. She fears that Restore, Repair, Renew is just another form of debt for vulnerable residents of Philadelphia.
“If we are talking about fighting poverty in the community, why push ourselves further into debt by giving them loans when the rich get tax cuts and free passes?” she asked.
Despite being the owner herself, Bennetch said she would not be participating in the program.
“The city has a lot of stuff up its sleeve,” she added.
But Councilor Parker said Restore, Repair, Renew is an example of Philadelphia “doing it right”. The program was created for “constant contributors to the tax base” who have traditionally been excluded from loan programs due to low credit scores.
According to data from the Federal Reserve Bank of Philadelphia, nearly 75% of middle and low-income earners were denied home improvement loans between 2015 and 2017.
“I invite you to walk down the block, look at the houses and you will notice the crumbling steps, the broken curbs… come in and you could see the water damage from the leaky roof,” Parker said.
“This program gives residents an affordable tool to preserve their most precious asset – their home.”
Residents interested in restoration, repair and renewal should visit the website for more details.