Cummins awards $1 million for Martindale-Brightwood mortgages

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Amid rising housing prices and an affordability crisis, Renew Indy is working on a partnership with Cummins to provide affordable mortgages to prospective homeowners in the Martindale-Brightwood neighborhood.

Supported by a $1 million grant from Cummins, based in Columbus, Indiana, the multinational motor company, the program is part of the city’s Lift Indy program to support affordable housing.

“All of Indianapolis lacks affordable housing and for Renew, we believe people should be able to live in neighborhoods of choice,” said Steven Meyer, CEO of Renew Indy.

“Martindale-Brightwood has many current residents who are renters or are part of multi-generational households and are interested in becoming homeowners. It is important to be able to provide this opportunity.”

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Under this program, eligible households can receive a second mortgage of up to $90,000 in addition to the initial first mortgage provided by Renew Indy, to purchase one of twelve newly constructed homes that will be built by Renew Indy this year in the neighborhood.

Households earning 80% of the region’s median income or less are eligible to apply. This threshold is based on HUD determinations and varies by household size.

For example, it is $65,300 for a four-person household and $45,750 for a one-person household. All twelve homes will be available on a first-come, first-served basis to eligible buyers.

The program was designed as a way to help black communities build equity through home ownership in historically black neighborhoods such as Martindale-Brightwood, Cummins’ chief corporate responsibility officer said. , Frank Griffin. But anyone, not just black households, can apply.

Black homeownership in Marion County has declined about 30% since 1970, despite the fact that the overall number of homes has increased over the past decade, according to a report from the January Fair Housing Center of Central Indiana. The report says the trend is driven by mortgage discrimination.

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Housing at below market price

Martindale-Brightwood residents are among those hardest hit by home loss due to mortgage foreclosure and tax foreclosure, according to a 2020 study by New America. It had a foreclosure rate of 7.24% from 2014 to 2018, indicating homes were much more expensive than most homeowners could afford.

Metropolitan Development Department Director Scarlett Andrews said she has identified Martindale-Brightwood as one of the Indianapolis neighborhoods where they are concerned about overall affordability due to rapidly rising housing prices. affecting historically low-income residents.

Meyer said Renew Indy homes will have a sale price of $150,000 regardless of the type of home purchased. The twelve houses will have different floor plans and sizes to meet the needs of each household participating in the program.

“For example, older homebuyers may want a one-story home rather than a two-story home,” Meyer said. “Or someone with children may want a bigger house, so we certainly want to make sure that the houses we provide meet the demand of the residents.

The $150,000 price is below market price, Meyer said. The most recent appraisals Renew Indy has had for the newly built homes put them at $200,000.

The twelve homes are estimated to cost Renew Indy about $250,000 in construction, land and management, Meyer said.

In addition to accessing homes at below-market rates, potential buyers will be offered mortgage products at below-market rates from Renew.

For example, Renew has a product called HomeSmart designed specifically for low-income homebuyers. Under HomeSmart, homebuyers need a minimum credit score of 600. They also won’t be required to purchase mortgage insurance, saving them about $100 a month, Meyer said.

“We want people who will stay.”

Even with the support of Renew Indy, homes and down payment may still be unaffordable for families.

This is where Cummins comes in. With the $1 million grant, each family participating in the program can receive up to $90,000 in a second mortgage repayable after ten years. This encourages families to stay in the house rather than selling it soon after buying it.

“We want people who want to be part of the neighborhood to stay in the neighborhood,” Meyer said. “And that’s why after 10 years this mortgage is completely forfeited.”

Residents don’t need to currently live in the neighborhood to apply, but Meyer said the homes are for buyers with generational ties to Martindale-Brightwood. Renew markets the houses to this group.

In this way, they hope to combat the displacement of longtime residents due to the gentrification of the neighborhood.

Contact IndyStar reporter Ko Lyn Cheang at [email protected] or 317-903-7071. Follow her on Twitter: @kolyn_cheang.

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