COLUMBUS - A little-noticed provision tucked into the $50.5 billion, two-year state budget signed last week by Gov. Ted Strickland will reward college graduates who choose to stay in Ohio by offering them help buying their first homes.
The program, watered down from a bill offered by Sen. Stephen Buehrer (R., Delta) and approved by the state Senate, offers cash grants to home buyers that would be second mortgages and would disappear after five years if the graduate stays in the state, automatically adding to the equity in the home. "There would be a cap on income, so we would not be giving a free lunch to people with half-a-million-dollar jobs,'' Mr. Buehrer said. His original plan had no income limits and would have offered larger grants to those earning a higher degree.
"It is still an incentive for those Ohio graduates who stay here,'' he said. "The program has been tailored to fall under the criteria of the existing program, so it's a win-win for the state.''
The original bill had not earmarked additional funding for the Ohio Housing Finance Agency, which finances its existing First-Time Homebuyer Program for moderate-income families through administrative fees charged on mortgages provided through participating banks. As first proposed, Mr. Buehrer's program was expected to carve $2 million to $3 million a year out of the agency's existing budget.
The state budget contains no appropriation for the program and there are no estimates on the revised program's cost.
Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, worked to come up with the compromise inserted into the budget. "We're not putting any onerous burden on the agency by requiring them to find money that really isn't available,'' he said. "[Mr. Buehrer] had wanted the program to cover people who were master's or PhD graduates who may end up making a decent income well above the limits of the program.''
Income limits under the current program vary by county. Lucas County's limit is $61,800 for a one or two-member family.
"We will explore income limits that exceed the program's limits,'' said Blaine Brockman, the agency's assistant executive director. "We've done that before in our foreclosure crisis opportunity loan program, which operated outside the legal requirements of the program. We'll do the same thing here.''
He said it may be several months before the guidelines are set and applications are processed.
The program aims to simultaneously address Ohio's housing crisis and brain-drain problem by dangling a financial carrot for college and university graduates to settle down here for at least five years.
Participants likely would get lower interest rates on their first mortgages and, assuming they stay at least five years, have the second mortgage forgiven. The value of the second mortgage, a percentage of the total purchase price, is one of the factors yet to be determined.
If the second mortgage value is set at 3 percent of the purchase price, a recent graduate buying a $100,000 house could have a second loan of $3,000 forgiven after five years. If the graduate leaves the state before five years, a proportional amount of the second mortgage would be recouped by the state through a lien on the property when the house is sold.
Contact Jim Provance at:
or 614-221-0496.39.96196 -83.00298