This article discusses mortgage lending programs aimed at lower-income buyers looking to purchase homes in compact, transit-accessible neighborhoods. Unlike traditional lending formulas, transit supportive home loan calculations consider transportation cost savings from living in transit-friendly neighborhoods and apply these savings to allow borrowers to qualify for a larger mortgage.

 

The article first draws from the smart growth literature to present the theoretical foundations of transit supportive home loans and the ways in which they address growth management goals. It then describes the application of the concept. Finally, it examines the prospects for transit supportive loans.

 

Krizek notes that transit supportive home loans have been implemented on a small scale in only a few metropolitan areas. He cautions that transit supportive home loan programs are unlikely to be adopted on a widespread basis, due in part to the limited number of households for which the loans would be appropriate.

 

Krizek argues that transit supportive home loans are unlikely to provide significant support for regional growth management efforts; he suggests that they are more likely to be successful in helping lower-income households to become homeowners in transit-accessible, desirable neighborhoods.