Philadelphia outlines 1 Philly mortgage program to boost homeownership without private insurance

In a recent budget hearing held by the Philadelphia City Council, significant discussions centered around the proposed "One Philly Mortgage" program, aimed at enhancing homeownership opportunities in the city. The initiative seeks to address the growing concerns over housing affordability and predatory lending practices that have plagued many neighborhoods.

The One Philly Mortgage program is designed to allow the city to collaborate with private lending institutions rather than acting as a direct mortgage lender. This approach is modeled after a successful Massachusetts program that integrates mortgage lending with housing counseling, ensuring that potential homeowners receive guidance both before and after purchasing a home. The city plans to establish a loan loss reserve, which would enable lenders to offer loans without requiring private mortgage insurance, thus making homeownership more accessible.

During the meeting, officials emphasized the importance of engaging with banks that the city currently does business with, suggesting that these institutions could play a role in supporting the program. The city aims to create a framework that not only facilitates lending but also protects against the negative impacts of predatory lending practices. This includes setting specific underwriting criteria to ensure that loans are granted fairly and responsibly.

In addition to the mortgage program, the council discussed the broader implications of corporate entities purchasing single-family homes, which has exacerbated the housing affordability crisis. Council members expressed concerns about the need for increased transparency and oversight regarding these transactions. The city is exploring data-driven approaches to monitor and analyze the activities of these corporate buyers, aiming to prevent predatory investing that undermines local homeowners.

The budget hearing also touched on the city's plan to borrow $800 million through unsecured bonds to fund various housing initiatives, including the goal of creating 30,000 affordable housing units. Council members questioned the decision to use unsecured bonds, citing potential increases in borrowing costs and reduced transparency. City officials clarified that the choice was made because many of the programs do not qualify for tax-exempt borrowing.

As the city moves forward with these initiatives, the emphasis remains on creating equitable housing opportunities while safeguarding the integrity of neighborhoods. The discussions highlighted the need for ongoing community engagement and education to empower residents in navigating the housing market and protecting their investments. The council's commitment to addressing these pressing issues reflects a proactive approach to fostering a more inclusive and sustainable housing landscape in Philadelphia.