Pasadena-based CIT Bank N.A., a subsidiary of CIT Group Inc. announced last month that it would give $400,000 as part of a partnership with the Los Angeles Housing and Community Investment Department to support first time homebuyers.
The money will support low-and moderate-income families, as determined by HUD's report on median family income.
"An affordable place to live should be within reach for everyone who wants to build a better life for their family," Los Angeles Mayor Eric Garcetti said in a statement. "When we help people clear hurdles that get in the way of homeownership, we put them on a path to the stability and financial security at the heart of the American dream."
Los Angeles is one of the least affordable markets in the country. Prices have risen 97 percent since 2000, according to a report from Harvard University’s Joint Center for Housing Studies. The survey also found that of the largest metros in the country, Los Angeles has the lowest share of homeowners—47.9 percent.
CIT will help roughly 27 families with down payment assistance, closing costs and acquisition financing.
CIT senior vice president Byron Reed spoke with Crain’s Los Angeles about the announcement.
Why did you decide to partner with the Los Angeles Housing and Community Investment Department?
The primary reason is CIT bank is headquartered in Southern California. We want to make sure we are committed to serving the communities where we live and work. California does have a shortage of affordable housing. It’s so expensive that people can’t afford to purchase and have to move further out and commute to their jobs. We want to help low to moderate income families find housing. This partnership will support eligible single family homebuyers and achieve greater stability.
What do you hope the partnership will accomplish?
I hope to see more families taking advantage of homeownership. We want to see more vibrant low and moderate income communities. Some of these communities used to be very vibrant. We want to stabilize these communities, help these folks become taxpayers. If they become taxpayers, they can become a bank’s clientele base.
How will you choose which families to help?
It’s the city of Los Angeles managing the program and offering it to the greater Los Angeles community. They will pick how the families are selected and which families are selected.
Is this the first time CIT has taken on something like this?
For CIT Bank, this is the first in-market effort that we’ve extended.
CIT is the first bank to invest in the city’s down payment assistance program. We are proud to be the inaugural partner to provide single family housing. We want to create sustainability in long term housing as well. We want to create strong communities which will in turn create a stronger CIT bank.
What other initiatives is CIT working on?
This is one of many initiatives that we’re going to be working on. We have other affordable housing efforts in Southern California.
Last year we announced our $55 million commitment to the National Equity Fund to support affordable housing. We are paying attention to our community’s needs and asking them what the greatest need is and pairing it with our initiatives.
We provided $335,000 in outreach for ClearPoint Credit Counseling Solutions. They provide credit counseling and help folks get back on the right track because poor credit does keep many away from home ownership.
Last fall we announced a $65 million commitment to five organizations supporting affordable housing programs [2,000 units of which 60 percent will be for families and 30 percent will be for seniors].
At the end of the day, affordable housing is our top priority here in Southern California. Homeownership and affordable housing is such a big deal for us right now, not to mention the homeless population growing. If we can create affordable housing, the next step would be to address homelessness.
We want to make sure we shout this on the rooftop so people know it’s available. We want folks to know that CIT is playing our corporate citizen part in making sure everyone has a part in homeownership. This is the tip of many interactions with the city to leverage each others’ strong suits and support each other.
We want to allow people to become strong individuals in the market where they live.