Duke launching Southside homebuyer program

Jan. 15, 2013 @ 05:44 PM

Duke University officials have begun rolling out a program that would supply $10,000 loans to at least 10 employees interested in buying a house in the city’s Southside redevelopment.

The school’s vice president for Durham and regional affairs, Phail Wynn, briefed campus personnel managers on the program last week. The move set the stage for an attempt to recruit potential buyers who’ve worked for the university or the Duke University Health System for at least five years.

“We are firmly committed to it,” Wynn said of an initiative that’s been in the works for about a year.

He on Monday emailed city officials to say Duke officials see the program as “a critical component” in the city’s attempts to redevelop the Rolling Hills and Southside area.

“This affordable housing initiative for low- and middle-income university and DUHS employees will be a first among institutions of higher education in the U.S.,” Wynn said in his email.

For recipients, the $10,000 loan will provide seed money they can channel into a down payment or closing costs for a new house in Southside. The loan will have zero interest and the school will waive $2,000 for each year the recipient lives in the house. Duke wants recipients to commit to staying in the neighborhood at least five years.

Income guidelines for the program allow Duke to aid workers who make up to 115 percent of the area median income. At last check, that translates into a $79,000 maximum annual income for a family of four.

But officials envision the possibility of helping buyers who make as little as 30 percent of area median income – a maximum for a family of four of $20,600 per year.

The median-income level varies with the size of a recipient’s family. Most types of compensation a worker receives – wages, tips, dividends, bonuses and the like – count toward the limit.

Officials anticipate that many buyers will need more than the just the university’s subsidy. The city as part of its broader Southside homebuyer program is orchestrating other forms of aid, and participants in the Duke program could, depending on their income, be eligible for city aid.

That complicates the program from Duke’s end, both from an operational and marketing standpoint, because it has to make sure applicants understand all their options.

“We’ve discovered that there will be, for each applicant, individual assessments, considerations and eligibility for the various components of the menu or layers of incentives,” Wynn said. “So it’s difficult to boil down our program into a very clear and concise summary that applies to all potential candidates.”

For their first mortgage, buyers will tap into a city-orchestrated network of lenders.

The university is sticking to its initial idea of recruiting 10 families as a pilot effort and eventually expanding the program to perhaps around 25 families, Wynn said.

City officials have been eager to see Duke get involved so “we can establish an initial, critical mass of individuals [buying in Southside] who can know they’re not going it alone,” City Manager Tom Bonfield said.

The project’s homeownership component will target land in the neighborhood the Self-Help credit union purchased over the years, in some cases using money supplied by Duke. The university last year committed to loaning the credit union up to $8 million.

Community Development Department officials met last week with interested contractors and are hoping to start building houses in June, Bonfield said. Infrastructure work would precede that, beginning in the spring.

The project complements the first phase of the Rolling Hills redevelopment, 132 rental units an Atlanta contractor is building for the city along Lakewood Avenue.