The Columbus Dispatch
More than 100 college graduates have used a new subsidy to buy a home in the Buckeye State during the past 12 months - signaling their desire to build a future in Ohio even as others leave.
The state unveiled the Grants for Grads program a year ago to try to reverse Ohio's "brain drain."
State officials say the program is helping local businesses find qualified workers by keeping more college graduates home. But they concede that more work needs to be done.
"Grants for Grads is one creative way to encourage talented young people to call Ohio home, but it's only one way," Gov. Ted Strickland said.
Recent college graduates won't buy a house in a community if they don't have a job, Strickland said. He said other state programs are aimed at encouraging job-creation.
The home-buying program offers a grant worth up to 2.5 percent of the purchase price and a lower interest rate on a 30-year loan. To be eligible, applicants must have earned a college degree within the past 18 months and have graduated from an Ohio high school. The college degree can be anything from an associate to a graduate degree from a school inside or outside the state.
The money can be used toward a down payment or closing costs. It doesn't have to be repaid as long as the buyers live in Ohio for five years. If they don't, the state uses a lien on the house to recoup money.
Since last October, 120 recent college graduates have received assistance through the program. Of those, 90 percent have been between the ages of 20 and 30. The majority - 83 percent - have been white. And more than half had credit scores above 700 points, which is usually considered good enough to get borrowers more financing options and better interest rates, said Cindy Flaherty, director of homeownership for the Ohio Housing Finance Agency, which operates the program.
As of last week, the agency had invested $329,218 in the program, which is paid primarily through the issuance of tax-exempt mortgage-revenue bonds, Flaherty said.
Participants on average received $3,076 in down-payment assistance and paid $120,205 for their homes, she said.
The agency had hoped to attract 200 potential homebuyers, but it didn't hit that target because of the lousy economy. Flaherty expects interest to rise as word of the program spreads.
It is difficult to tell if the program is reaching young people who might have been considering fleeing the state, but it gives them a reason to stay, said Jeff Brader, executive vice president of Concord Mortgage Group in Westerville.
The agency currently is offering a 4.25 percent interest rate, which is up to half a percentage point lower than its other first-time homebuyers programs, he said.
The program is available to more people than other first-time homebuyers programs, said Brader, president of the Ohio Mortgage Bankers Association. A person or couple from Franklin County, for instance, must earn less than $82,320 instead of the more-typical $68,600 for other programs.
The finance agency also sets a maximum allowable price for an area, but those aren't that restrictive, he said. In the Columbus area, the amount is up to $375,375.
"The biggest obstacle for new graduates, many of whom are paying student loans, is ... coming up with the $5,000 down payment," Brader said. "This program takes care of that problem."
Grants for Grads was never meant as a cure-all to Ohio's brain-drain problem, said state Sen. Steve Buehrer, who sponsored the bill that created it. "It's just one avenue to help keep Ohio college graduates from looking everywhere but Ohio for job opportunities," said Buehrer, a Republican from Delta.
In 2007, Ohio had a net loss of 1,517 bachelor's degree holders and 1,555 graduate-degree holders to other states. That's better than in 2006, when Ohio had a net loss of 9,120 college graduates, but it's still not good enough, state officials say.
"If we offer enough incentives, we can keep at least some of these people at home," Buehrer said. "And if a person stays five years, they're much more likely to spend their lives here."
To get more information, go to www.ohiohome.org/homebuyer/grantsforgrads.aspx.
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