Secretary Kenneth C. Holt Maryland Department of Housing and Community Development You’ve Earned It! A student debt initiative from the Maryland Mortgage Program Secretary Kenneth C. Holt Maryland Department of Housing and Community Development September 26, 2016

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 2 IDENTIFYING AN OPPORTUNITY 2015 marked the pivot point when the Millennial generation (adults aged 18-34) became the largest population segment in both the workforce and the general population Barrier to Millennial home purchase is student loan debt resulting in an inability to save for a down payment and closing costs

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 3 GEOGRAPHIC TARGETING Sustainable Communities are older neighborhoods that have existing transportation and other infrastructure Goal: Bring Millennial homebuyers to areas already developed and in need of revitalization

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 4 MAY 2015 – PRODUCT LAUNCH You’ve Earned It! ~For borrowers with $25,000+ in student debt Low mortgage interest rate of 2.75% ~ regular government rate was 3.75% $10,000 for down payment/closing costs ~ zero percent deferred loan ~ regular DPA was $5,000 Must purchase in a Sustainable Community ~ to revitalize older neighborhoods

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 5 MARKETING Announced at the Montgomery Co. Affordable Housing Fair Press Release Website/Blog Directive E-blasts $20,000 digital/print campaign Outreach to realtors Training for MMP approved lenders

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 6 PRODUCT UTILIZATION $18.2 million in mortgage loans $830,000 in DPA 83 homebuyers Average loan amount of $206,291 Completely subscribed within six weeks!!

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 7 MARKETING ADD FLYER Low interest rate (below 3%) caught the borrower’s attention; generous DPA sealed the deal!

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 8 BORROWER PROFILES You’ve Earned It! borrowers compared to other Maryland Mortgage Program borrowers: You've Earned It!Regular MMP Age3035 Credit Score Purchase Price$206,291 $190,349 Household Income$74,300$69,300 Average statewide purchase price = $305,055 Statewide Median Income = $90,500 Average house 25 years older (1944) than typical MMP home (1969)

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 9 SURVEY RESULTS A survey of You’ve Earned It! borrowers showed: 94% of the borrowers were satisfied with the program and would recommend it They are optimistic about the housing market and expect their property value to increase The majority would have delayed home purchase (36%) or bought a cheaper home (39%)

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 10 FOLLOW-UP PRODUCT Due to the high demand, a follow-up product was launched immediately after closing the initial phase of You’ve Earned It! Phase 2 offered a quarter percent reduction off the regular mortgage loan rate and $5,000 in down payment assistance. Applications decreased significantly, but the product continues to be used – often by those who heard of Phase 1 but were unable to apply quickly enough. Phase 2 is still active ~ 59 additional homebuyers assisted to date.

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 11 SUMMARY You’ve Earned It! : Incentivized Millennials to purchase homes earlier and in areas needing economic revitalization Brought an influx of younger residents into older sustainable neighborhoods

Secretary Kenneth C. Holt Maryland Department of Housing and Community Development 12 QUESTIONS? John Maneval Deputy Director, Community Development Administration Maddy Ciulu Director, Single Family Housing