Fannie Mae provides Incentives to Locate Near Transit
Hoping to ease traffic and revive older suburbs, Fannie Mae is offering bigger mortgages to people who buy homes near train stations and bus stops and agree to limits on how many cars they can own.
“Smart Commute” is a mortgage initiative created by the Federal National Mortgage Association, better known as Fannie Mae, that links housing and public transportation.
Smart Commute pilot programs are being tested in Minneapolis, Pittsburgh, Salt Lake City and Philadelphia. Fannie Mae is also looking to include Washington, Baltimore, Louisville, Ky., and State College, Pa.
Buyers who purchase a home within a quarter-mile of a bus line or a half-mile of a train station can qualify for a mortgage up to 8 percent larger than they could get under a traditional loan.
In exchange, they must agree to limit the number of cars they own to no more than one per adult driver. The program is aimed in part at reviving older suburbs that fell out of favor when people began driving longer distances to work.
The program is based on studies showing that people who commute on public transportation can save $ 200 to $ 250 per month, compared to the cost of owning, maintaining and insuring an automobile.
“Basically what the program acknowledges is that commuting by train or by bus is cheaper than owning a car, and because you are spending less money, you can afford more house,” said Barry Seymour of the Delaware Valley Regional Planning Commission, which did research for the program.
So far the loan offer is still considered a pilot program.
Federal National Mortgage Association: http://www.fanniemae.com/