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Buy near mass transit, get a better mortgage deal

MADISON — Madison-area home buyers now have compelling financial incentives to purchase a home near Metro bus routes. The Madison Smart Commute Initiative, the first of its kind in Wisconsin, gives prospective home buyers the opportunity to qualify for a mortgage with the help of anticipated savings from using public transportation. Mayor Cieslewicz unveiled this new initiative at Orton Park in the near east-side Marquette neighborhood, which is served by mass transit.

"Madison is excited to be the first city in Wisconsin to welcome the Smart Commute initiative," said Cieslewicz. "Linking affordable housing to transit is a major step toward helping more working families purchase a home. My administration has made addressing the challenges of affordable housing a top priority, and I commend our participating local businesses, Fannie Mae, and the housing advocates and lenders for this innovative and unique approach."

Transportation is the second-largest expense, after the mortgage or rent expenses, for many households and can even exceed housing expenses in some cases. Purchasing a home near public transit and using bus service instead of a car to commute can help home buyers save a significant amount of money on travel expenses and the upkeep of a personal vehicle. Using public transportation can allow home owners to reduce or even eliminate the expense of owning and maintaining a vehicle.  

The Smart Commute Initiative addresses the link between housing affordability and transportation costs, and recognizes that home owners who spend less on commuting expenses can put these savings toward the purchase of a home. If eligible home buyers choose a home within one-quarter mile of a Madison Metro bus stop, participating lenders can add a portion of their anticipated transportation savings to their qualifying income. This could help home buyers get more home for their money.

"Smart Commute is an exciting opportunity to provide a valuable home-ownership incentive to our customers, help reduce Madison's traffic congestion, and improve our air quality," said Julie Maryott-Walsh, Metro's Transit Marketing manager. "As gas prices exceed $2 per gallon and fuel costs for the family car escalate, riding Metro can be a very wise alternative. We are eager to have more Madison residents take advantage of public transit."

Participating Smart Commute lenders include Anchor Bank, Associated Bank, First Federal Capital Bank, and Guaranty Bank. The local lenders will originate the mortgages under the Smart Commute Initiative, and Fannie Mae will purchase the eligible loans.

The advantages of purchasing a home through the Smart Commute Initiative are:

• Home buyers who participate in the Smart Commute Initiative will receive a free Metro Transit bus pass good for the first two months after loan-closing confirmation;

• For loan qualification purposes, Anchor Bank, Associated Bank, First Federal and Guaranty Bank will be able to add a portion of the potential transportation savings to borrowers’ qualifying income — an additional $200 per month for one wage-earner households and $250 per month for two wage-earner households — which could increase the home-buying power of a typical purchaser of a median-priced home;

• Depending on borrower's income eligibility or the location of the property, home buyers may need as little as $500 from their own funds for down payment and closing costs;

• The initiative benefits the environment by allowing the home buyer to conserve natural resources, lessen the impact of vehicular emissions, and reduce traffic congestion;

• Capital Newspapers Inc. will offer Smart Commute home buyers a $20 transit voucher and one month free toward a one-year subscription to the Capital Newspaper of their choice;

• Madison Gas & Electric (MGE) will offer Smart Commute home buyers a free home-performance inspection,which is a professional energy-performance evaluation for existing homes to help home buyers save energy costs and improve the comfort and the safety of their homes. The assessment is valued at up to $300;

• Smart Commute home buyers will receive a trial membership to Community Car of Madison, a member-based, car-sharing organization that provides cars by the hour and by the day for occasional use. Car sharing offers a way to reduce the number of cars in an urban area and supports a practical shift toward sustainable mobility and away from automobile dependency. The trial membership, which includes five free hours and up to 60 miles, is valued at $45;

•1,000 Friends of Wisconsin will give each Smart Commute home buyer “Celebrating Wisconsin's Cities,” an inspiring book that highlights numerous cities and towns throughout the state;

Fannie Mae's participation in the Madison Smart Commute Initiative is part of the company's American Dream Commitment® to expand access to home ownership for millions of first-time home buyers, to help raise the national minority home-ownership rate to 55 percent by 2014, to make home ownership and rental housing a success for million of families at risk of losing their homes, and to expand the supply of affordable housing where it is needed most.

"Fannie Mae's mission is to lower the costs that can put up barriers to home ownership," said Dru Pasley, director of Fannie Mae's Wisconsin Partnership Office. "Helping more individuals and working families invest their transportation savings into home ownership is good for our community in every way. With committed partners like the city of Madison, Metro Transit, and our local lenders, Madison is a great place to introduce the first Smart Commute initiative in Wisconsin."

To determine their eligibility to apply for a mortgage loan through the Smart Commute Initiative, consumers may contact:

• Anchor Bank — Susan Day — 252-8815

• Associated Bank — Mark Wimmer — 259-2081,

• First Federal Capital Bank — Kevin Strangman 800-657-4636, or

• Guaranty Bank — Beth Wanninger — 836-3090 ext. 6442.