Residents of Portland, Ore., now have financial incentives to purchase a home near public transportation, thanks to an initiative between mass transit providers, housing groups, mortgage lenders and Fannie Mae.
The Portland Regional Smart Commute Initiative, introduced by U.S. Representative Earl Blumenauer (D-Ore.), recognizes that homeowners who spend less on commuting expenses can put the potential savings toward the purchase of a home. If eligible home buyers choose a home within a half mile of a light rail station, or within a quarter mile of a commuter bus stop, participating lenders will add a portion of their potential transportation savings to their qualifying income.
“Smart Commute is the perfect example of how innovative public-private partnerships can help to create livable communities,” said Rep. Blumenauer. “By providing incentives for people to purchase homes served by transit, this program will increase families’ personal wealth and decrease their transportation costs while it increases home-ownership rates, revitalizes our neighborhoods, and lessens the burdens on our roads.”
Participating partners in the Portland Smart Commute Initiative include: Tri-County Metropolitan Transportation District of Oregon, Countrywide Home Loans, the Portland Development Commission, Flexcar, Metro, the city of Portland’s Transportation Office, the Portland Metropolitan Association of Realtors, and Fannie Mae. Homeowners who obtain a mortgage under the Smart Commute Initiative will receive free passes for one month on Tri-Met buses and light rail trains. In addition, Flexcar offers Smart Commute participants who join Flexcar $100 of free initial usage credit.
Transportation savings are considered in the loan application and qualification process and can help buyers cross the threshold to home ownership. Countrywide Home Loans will originate the mortgages for qualified borrowers under the Smart Commute Initiative, and Fannie Mae will purchase the eligible loans.
For loan qualification purposes, participating lenders will be able to add a portion of the potential transportation savings to borrowers’ qualifying income – an addition of $200 per month for one-wage-earner households and $250 per month for two-wage-earners households.
Countrywide may be able to offer a low down payment of only 3 percent on the purchase price of the home, or a down payment as low as $500, depending on the borrower’s income eligibility, according to a press statement.
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