COLUMBUS - The Ohio Senate has unanimously passed a bill that its sponsor says could simultaneously wage war on the state's brain drain, home-sales slide, and educational underachievement by providing home-down-payment assistance to new college graduates.
If the Grants for Grads program becomes law, it would be the first assistance program operated by the Ohio Housing Finance Agency that is not tied to financial need.
"If a college graduate has a job offer in Ohio and one in North Carolina, that young person is going to weigh the salary, perhaps the taxes, the cost of housing," the bill's sponsor, Sen. Stephen Buehrer (R., Delta), said. "If we can say that you'll receive $5,000 if you stay in Ohio, that might be enough incentive to keep those people at home.
"If a person stays five years, they're likely to stay here three decades," he said.
"This is exactly the time in life when people are making their first life decisions beyond college. This is our chance to grab them and say, 'Ohio welcomes you.'•''
The bill now goes to the House. Gov. Ted Strickland's proposed $54.4 billion, two-year budget pending in the House does not include the $2 million to $3 million a year that the program is expected to cost.
"The governor certainly believes that efforts by the state to keep and attract young people are worthy, but he has not reviewed the specifics of this proposal to determine if it is the most effective way to accomplish that goal," Strickland spokesman Amanda Wurst said.
Under the program, any Ohio resident who receives a two-year associate degree, regardless of whether it's from an Ohio school, could apply within 60 days of graduation for a cash grant of $2,500 to be applied toward closing costs or a down payment on a first home.
The size of the check would double for four-year bachelor degrees and double again to $10,000 for postgraduate degrees. Grant recipients would have to agree to stay in their Ohio homes at least five years, and the state would place liens on the houses to recoup at least part of its money if they don't.
A total of 300 grant recipients would be selected via two lotteries held each year.
The idea is that new graduates could receive grant certificates via the lottery that they could carry with them into home-buying negotiations much as they could a preapproved mortgage. The certificate would be good for two years.
"The senator has done a good job of raising the issue for us," said Dawn Larzelere, the Ohio Housing Finance Agency's director of legislative affairs.
"It has caused us to contact other state agencies we wouldn't typically work with, such as the Board of Regents."
The agency, which provides low-interest loans and down-payment assistance to first-time home buyers based on income, has an annual budget of about $15 million.
So an annual Grants for Grads cost of $2 million to $3 million would represent 13 to 20 percent of its budget.
Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, raised concerns that the money might be diverted from housing programs for low-income residents and said he believes such a sum might be better used to prevent home foreclosures.
"The intent is solid," he said. "The problem is that it is 300 people, and we pay a greater amount based on the degree. If you're a doctor or lawyer, you're eligible for the maximum amount. I wonder whether we're really changing any behavior."
Mr. Buehrer, however, said that taxes generated for the state by those who might otherwise have fled would more than cover the program's cost.
He said most graduates fresh out of college would make less than the average $65,000 household income of those the finance agency currently serves.
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The Ohio Senate has unanimously passed a bill that its sponsor says could simultaneously wage war on the state's brain drain, home-sales slide, and educational underachievement by providing home-down-payment assistance to new college graduates.