U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 April 10, 1996 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER TI-438 TO: ALL TITLE I LENDING INSTITUTIONS SUBJECT: FIRST TITLE I SHOWCASE AWARD MADE TO THE PHILADELPHIA HOME IMPROVEMENT LOAN PROGRAM On March 13, 1996 at Philadelphia City Hall, HUD Secretary Henry G. Cisneros presented the Federal Housing Administration's First Title I Showcase Award to the Philadelphia (Pennsylvania) Home Improvement Loan Program. Award plaques were presented to the Mayor of Philadelphia, the Executive Director of the City's Redevelopment Authority, and senior officials from the five lenders participating in the program - CoreStates Bank, First Union National Bank, Mellon Bank, Midlantic Bank, and PNC Bank. The Title I Showcase Award was established to recognize partnership efforts in the use of the Title I property improvement loan program to meet community development and housing rehabilitation goals. The Department announced the Title I Showcase Award program in TI-433 dated June 28, 1995. Summary of the Philadelphia Program The Philadelphia Home Improvement Loan Program is one of the most successful housing programs in the City. The City's Redevelopment Authority administers the program under a cooperation agreement with the City government. The program provides below-market interest rate loans to low and moderate income residents for home repairs and improvements. To date, nearly 5,000 homeowners have been able to obtain the financing needed to repair their homes through this program. The Redevelopment Authority reaches out to low and moderate income homeowners through community newspapers, English and Spanish language radio stations, and mailings to 400 community-based organizations and targeted neighborhoods. The Authority also sends out fliers in English and Spanish in conjunction with the monthly water bills. Loan applicants are referred to one of the participating local banks for loan processing. After an applicant is found to be creditworthy, an inspector from the Redevelopment Authority meets with the homeowner to explain the program, answer questions, and provide assistance in determining the family's home improvement needs. However, the homeowner makes the final decisions on what improvements to undertake, which contractor to select, and whether the work is satisfactorily completed. 2 A Redevelopment Authority inspector visits the property several times while the work is in process, to see that the improvements are being completed on schedule and that the workmanship and materials are satisfactory. The Authority's help is also available to resolve any disputes between the contractor and the homeowner. The Redevelopment Authority purchases the closed loans from the local banks with the proceeds from tax-exempt revenue bonds, and the City allocates a portion of its Community Development Block Grant funds to subsidize the interest rate. The interest rate for low income homeowners is currently three percent, while the rate for moderate income homeowners is six percent. In the past two years, the Redevelopment Authority purchased over $5 million in Title I property improvement loans. In making this first Title I Showcase Award, the Department is pleased to recognize Philadelphia's record of accomplishment in rehabilitating homes for low and moderate income families over a period of many years. Submitting Showcase Proposals Based upon the success of the first Title I Showcase Award, the Department has decided to make these awards an annual event, with selection of award winners each Spring. However, partnerships are encouraged to submit their Showcase proposals at any time they believe the evaluation criteria have been met. Five copies of the proposal should be sent to: Ms. Emelda P. Johnson Deputy Assistant Secretary for Single Family Housing Dept. of Housing and Urban Development 451 Seventh Street, S.W., Room 9282 Washington, D.C. 20410 Criteria for a Showcase Award The following criteria are used in evaluating all Showcase proposals that are submitted to the Department for consideration. While a proposal should meet most of these criteria, it is not necessary to meet all criteria to be considered for a Showcase Award. o The community or neighborhood must be receiving public funds for revitalization or be otherwise designated for housing rehabilitation by a State or local housing agency or nonprofit organization. o The rehabilitation program must be targeted to low and moderate income families and individuals - those with incomes at or below 115 percent of the median family income in the area.s 3 o The rehabilitation program must be carried out through a process of public/private cooperation among local community or neighborhood organizations, lenders, borrowers, contractors, and others. o The rehabilitation program must provide for extensive borrower participation in the decision-making process, including decisions on the type and extent of the improvements. o The partnership effort must produce a sufficient number of Title I property improvement loans to have a significant impact on the community or neighborhood. o There must be a provision for inspection of the work during rehabilitation, with disbursements made to the contractor only after improvements are completed to the satisfaction of the borrower. For Further Information If you want more information about the Philadelphia Home Improvement loan Program, please write to Joseph L. Ramsay, Jr., Director of Home Mortgage and Improvement loans, Philadelphia Redevelopment Authority, 1234 Market Street, Philadelphia, PA 19107, or call him at 215-2098703. If you have questions about the Showcase program, please write to Robert J. Coyle, Chief, Home improvement Branch, 490 L'Enfant Plaza East, Suite 3214, Washington, D.C. 20024, or call the Title I staff at 202-755-7400. Sincerely, Nicolas P. Retsinas Assistant Secretary for Housing-Federal Housing Commissioner