Could You Qualify For an Extra $14,000?
 brought to you by Chrissy Neumann

"Smart Commute" -- already offered in 16 metropolitan areas, including Minneapolis, Pittsburgh and Salt Lake City -- allows people to qualify for larger mortgages if they buy houses near transit lines and promise to use them. The Federal National Mortgage Association, or Fannie Mae, started the program in May 2001.

The financing tool is designed for people who want to be intown but cannot afford its higher housing prices, said Archibald B. Hill III, who directs Fannie Mae's Atlanta partnership office.

Here's how it works: Potential home buyers promise to swap driving for public transportation. The program allows only one car payment per household. The savings on car notes, insurance, gasoline and maintenance are added to income and other calculations that determine mortgage amounts. Mortgage rates do not change. Houses must be no more than one-quarter mile from a MARTA bus stop or a half-mile from a rail station.

"The whole point is to increase affordability for housing close to public transit," Hill said.

Based on the annual median household income in metro Atlanta of $68,796, a couple could qualify for an extra $14,000 on a mortgage through Smart Commute. That figure assumes savings of $250 per month by reducing car use. A single person would qualify for about $11,000 more, with $200 in monthly savings by driving less. Participants will receive six-month MARTA passes, worth $315 each. The maximum loan amount is $333,700.

The program could be a hard sell to people who aren't used to public transportation, said real estate agent Beth Ann Clanin of Bo Bridgeport Brokers. Her customers are often first-time buyers in Kirkwood, Decatur, East Atlanta or Grant Park, areas near several bus lines and train stops. In the last year Clanin has sold 53 houses, and only two clients asked about living near MARTA.

But Clanin sees potential as more people more intown. "I think people definitely yearn not to need cars," she said. "In three years, that program will probably be a pretty heavy hitter."

That's what Fannie Mae officials are hoping for in Atlanta, where the federal government shut off road money in the late 1990s because of poor air quality. Fannie Mae will kick off the program this morning with U.S. Reps. Johnny Isakson, a Republican from Cobb County, and Denise Majette, a Democrat from DeKalb County, at the Hamilton E. Holmes MARTA station, the last stop on the west line.

The idea appeals to homeowners Lauren and Bishop Jason Cohen, who live in Collier Pointe, a subdivision across the street from the Holmes MARTA station. She wishes that a Smart Commute mortgage had been available when they bought their two-bedroom townhome last fall.

"We could have gotten an extra bedroom and the hardwood floors I desperately want," said Lauren Cohen, 25, who drives to her job as a program manager for the Jonesboro Housing Authority. Her husband, 29, takes the train to Five Points station downtown, where he works as a tech support associate at Joi, an Internet service provider. They bought their townhome, in part, because it was near MARTA. For now, the Smart Commute program only applies to residences around MARTA stations and near bus stops in DeKalb and Fulton counties. It may be expanded to bus systems in Cobb, Gwinnett and Clayton counties, Hill said.

Fannie Mae will not police car ownership, but to qualify for the program, a credit check must show no more than one car payment. People who own two cars outright still could participate if they promise to take mass transit, Hill said.

Nationally, the program is growing slowly. In Salt Lake City, Cate Burrows of lender America First Credit Union said her company has written about a dozen Smart Commute mortgages in two suburban cities north of the city on a bus line.

In Minneapolis, Melissa Thompson, vice president of product development for TCF Mortgage Corp., said her company has issued about 35 Smart Commute mortgages in just over 2 1/2 years.

Jennifer Eichten, 26, holds one of those mortgages. She and her husband bought a $196,000 house south of the city last March. She commutes about 15 minutes by bus downtown to her job as a law clerk.

Since they bought the four-bedroom house, the couple has saved $5,000 to $7,000 on gasoline, maintenance and parking, Eichten estimated. She also received a free two-year bus pass, valued at $2,200. Before long, she sold her car.

"Once we got the bus pass, I wasn't using my car at all," Eichten said. "We figured, why not save money? It was great freedom to get rid of one of the cars."

By JANET FRANKSTON
The Atlanta Journal-Constitution