In a region where property values have skyrocketed over the past decade, the University of Miami has seen difficulty attracting new faculty members.
As a result, the university is offering a new mortgage assistance program called the Shared Appreciation Mortgage Program (SAMP) intended to help accommodate them.
The program, which began last August, allows new faculty to borrow up to either $300,000 or 50 percent of the purchase price of a house, whichever is greater.
A new faculty member will only have to take out a mortgage from a lending institution to cover at least half the purchase price of the house, while the remaining cost will be covered by the university and the university’s equity. Additionally, the total appreciation of the house is paid back to the university when the house is sold.
“The escalating real estate market created an inhibitor to attract quality faculty to the market,” said Mark Diaz, associate vice president for budget and planning. “[The program] is intended to lessen the burden on faculty that have been recruited and relocated.”
Diaz said that the program’s overall reception has been “tremendous,” even causing some existing faculty to want to get involved in the program. However, due to Internal Revenue Service regulations, mortgage assistance is only available to eligible faculty. The SAMP requires that faculty members apply for the program within 18 months of their appointment to the university, move their primary residence at least 50 miles and that the home be purchased within Miami-Dade County.
“The idea is to try and bring faculty closer to the campus during the evening hours and during the weekend, fostering the concept of a campus community,” said Steven Ullman, vice provost and dean of the graduate school.
Ullman led a discussion of the new program with the Board of Trustees.
Andrea Heuson, a professor in the Finance department with a special interest in real estate and mortgages, said that the shared appreciation mortgage program has been implemented at other universities with great success. She added that the program also allows the university to make long term investments in the rising value of real-estate in the area.
“It creates a situation that makes everyone happy and it is not a particularly risky investment for the university,” Heuson said. “It’s a win-win situation.”
Some new faculty members have issues with the program, namely the fact that there is not enough time between notification of their appointment to UM and the SAMP application deadline in order to receive the full benefits of the program.
Merike Blofield, a new assistant professor in the Political Science department, has been renting an apartment while she searches for a home in the community.
“I think that it is a wonderful program, although I have concerns that the time [provided] is short,” Blofield said. “I am afraid that by the time I am ready to look into the mortgage program, I will be ineligible.”
Not all college mortgage programs fall under the same restrictions as the SAMP. At Stanford University, whose Deferred Interest Program provided the basis for UM’s mortgage program, there are no restrictions on when a faculty member can apply.
“Our programs have been around a long time, so we have worked out a lot of problems to help faculty, untenured and tenured, become available for a quality mortgage program,” said Jan Thomson, director of the Faculty Staff Housing program at Stanford.
Although the UM program may need some adjustment over time, many faculty members have been very impressed.
“I think that the program is fantastic and an incredible help in the retention of new faculty,” said Antonio Nanni, the new chairman of the Civil, Architectural and Environmental Engineering department.
Nanni’s chief concern with the program is that not enough incoming faculty know about it.
No matter what type of program is offered, for some the rising costs of real estate in Miami will remain an issue. Sallie Hughes, an assistant professor of journalism, recalls the difficulty of looking for a place to live on a new professor’s salary.
“It’s a real crunch that, at least in my case, isn’t going away for awhile,” she said. “I know of at least one professor in more or less my situation that is back on the job market because of it, so retention as well as attraction of new faculty are issues that the university will have to face very soon.”
Shelley Rood may be contacted at m.rood@umiami.edu.