Appendix A

Fact Sheet

Mortgage Criteria for Inner-City Philadelphia

The Philadelphia Mortgage Plan is a program initiated by the three major banks in that city, First Pennsylvania Bank, Philadelphia National Bank, and Philadelphia Savings Fund Society. The project stems from the banks' participation in the Philadelphia Partnership, a private, non-profit civic organization set up last year to take fresh approaches to specific urban problems.

The participating banks have established specific new lending criteria which will become part of their normal lending operations. Two key considerations exist in all mortgage applications the financial standing of the borrower as it affects his ability to repay, and the property itself. Thus, mortgage lending policy changes in both these areas are the backbone of this new effort.

Each participant will bear responsibility for ensuring that its personnel are aware of the goals of the Philadelphia Mortgage Plan. Strong top management commitment, suitable organizational arrangements, and other internal adjustments, will cause staffs to respond with both productivity and energy to social demands.

I. Regarding Housing Units

Properties on which mortgages are requested will be appraised based
on their structural condition and the condition of other homes on the
immediate block. The following criteria will be regarded as favorable
to mortgage lending. Primary consideration will be given to items (a)
and (b), but properties that do not meet these standards may still be
eligible for mortgage funds if a combination of other positive factors
exists.

a.

Abandonment and vacancy rate of no more than 10%;

b. Median property value of $6,000 in block;

The existence of a strong and cohesive neighborhood or-
ganization or community organization;

The presence of a non-profit developer who is rehabilitating
abondoned units, or the existence of other ongoing program
by public agencies lenders or private groups to improve or
rehabilitate housing;

Cooperation of absentee owners with neighborhood residents
to improve housing and make needed repairs.

II. Regarding Applicants:

a. Income of co-mortgagor will be recognized;

b.

Confirmed income from welfare will be treated as effective

C.

d.

e.

f.

8.

Loan-to-value ratio: up to 90-95%, provided there is
mortgage insurance, with a maximum PMI (private mortgage
insurance) mortgage amount of $15,000;

Application will be handled by well-trained interviewers at a designated office of each participating bank;

Counseling organizations may be used to review homeownership applications where deemed necessary because of case-history;

Escrow for taxes, fire insurance and private mortgage insurance shall be included in monthly payments;

Mortgage terms will depend on loan amount and ability to

repay.

III. Regarding Operations:

a.

b.

C.

Any lender who is inundated by mortgage applications should
advise the applicant that the case will be transferred to
either of the other participating banks after the application
is taken. Application fees will be transferred with application;

There will be a reconvening of the original participants of
the program to analyze the effectiveness of the program.
Community representation will be needed to assist in the
analysis and advise whether the participating institutions
have set criteria applicable to the program;

All participating banks agree to commit themselves to include these above criteria as part of their normal mortgage operations.

LAWRENCE B. ROSSER

Executive Director

WOODSTOCK PROJECT

A PROJECT OF THE SYLVIA AND AARON SCHEINFELD

FOUNDATION

November 4, 1976

COUNCIL OF MANAGERS

CHAIRMAN

Stanley J. Hallett

Center for Urban Affairs Graduate School of Management

Northwestern University

VICE CHAIRMAN

Mrs. Aaron Scheinfeld
Sylvia & Aaron Scheinfeld

Foundation

SECRETARY

Albert A. Raby

United Teachers of Chicago

TREASURER

Daniel R Scheinfeld

Institute for Juvenile Research

Ronald A. Grzywinski
Illinois Neighborhood
Development Corp

John L McKnight

Center for Urban Affairs
Northwestern University

Alexander Polikoff

Business & Professional People for the Public Interest

Sandra J. P. Scheinfeld
Sylvia & Aaron Scheinfeld
Foundation

The information provided in the attached report is supple-
mental to the paper "BANK STRUCTURE AND THE PUBLIC INTEREST
IN URBAN CENTERS" which was prepared in June 1976 by
Lawrence Rosser, Director, and Barbara Beck, Research Asso-
ciate of the Woodstock Project and Calvin Bradford, Associate
Director of the Center for Urban Studies at the University of
Illinois Circle Campus.

This report is a draft only and subject to revision. It has not been submitted to the Council of Managers of the Woodstock Project for their acceptance, nor does it necessarily represent their views or the views of the Center for Urban Studies.

80-991 - 77 - 22

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