Philadelphia to launch low-interest loan program that will help residents fix aging homes

Caitlin McCabe, on

Published in Business News

Officials say the problem is also exacerbated by private financial institutions that tend to deny home-improvement loans to lower-income residents or ones with low credit scores. According to a study released in December by the Federal Reserve Bank of Philadelphia, nearly 75 percent of low- or moderate-income homeowners in the Philadelphia metro division were denied when they sought home-improvement loans between 2015 and 2017. (To be considered low- or moderate-income, a single person must have made less than $48,950. Credit history was not considered in the analysis because financial institutions were not required to report credit scores.)

Greg Heller, executive director of the Philadelphia Redevelopment Authority, said he and city officials hope that if the Restore, Repair, Renew program is successful, it will "nudge the private sector to get into this space more with lesser public intervention."

According to the current parameters for the program, two participating lenders, Finanta, a nonprofit lender, and Univest Bank and Trust Co., a bank, will provide the loans. The Redevelopment Authority will then purchase the loan from the originating lender, Heller said, though the lender will continue to service loan.

Before an applicant can receive a loan, he or she must meet with one of three program intermediaries, which will be staffed by representatives from Clarifi, the Public Health Management Corp., and the Philadelphia Council for Community Advancement. The intermediaries, in addition to determining whether applicants are eligible, will provide financial counseling and assist a homeowner in finding a contractor to complete the repairs.

Loans are paid directly to one of nearly 90 licensed contractors approved by the city, Heller said.

"When we were talking about raising money for home preservation, such as for the Basic Systems Repair Program, we realized that there were a lot of people who made just above the federally mandated" income guidelines, Clarke said. "We continue to say that the most affordable home is the one you live in, so if we can preserve that home, we need to figure out a way to do that."

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City officials are slated to announce the program at 2 p.m. Clarke and Parker are both running for re-election and facing challengers this year.

Philadelphia Media Network is one of 21 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city's push toward economic justice. See all of our reporting at


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