Two city leaders introduced a program Tuesday that would enable eligible borrowers to finance part of the purchase and renovation costs of eligible downtown properties with a zero-percent interest rate.

The Basset Small Cap Tax Increment Financing Loan Program, introduced by Mayor Dave Cieslewicz and City Council President Mike Verveer, would allow borrowers to receive a loan up to $60,000; however, they must live in the property as their main residence for at least ten years.

Additionally, a property is only eligible if it is currently a rental property in the Bassett District, and the residence cannot have more than three divided living units after renovation.

Community Development Supervisor Percy Brown said the goal of the program is to support owner-occupied housing in the downtown area.

"It will encourage more people to buy and own homes in the downtown area, and at the same time, it allows people to make improvements to the properties at the same time they purchase the properties," Brown said. "We see this as a big plus in the downtown area and the district that the Bassett neighborhood is located in."

Brown also said the program would have positive effects on the area, such as increasing diversity and improving the quality of life and the downtown economy.

"By [more] people owning, you will improve the stability of the neighborhood. Now people will be taking more pride in ownership and will have more of a stake in the neighborhood," Brown said. "We see this as improving the quality of housing in the area."

According to Brown, the program will be funded by the tax increments from the TIF 28 district, which is the Bassett neighborhood.

Ald. Robbie Webber, District 5, said she supports the program and thinks it will be a great opportunity for people who want to get into owner-occupied housing for the first time.

"Because of the construction of a lot of large apartment buildings, there are a lot of older single family homes, as well as two- and three-flat homes, that are hard to rent now for landlords. This will give people who want to buy them and live in them a chance to live in the downtown," Webber said.

Webber also said she believes this will have a beneficial impact on the downtown area in helping to conserve some of the older homes, which give the downtown its character.

"It will let people who are willing to put in sweat equity to have places in the downtown," Webber said. "There will be people living there who will take care of them. I think it’s an interesting program, and I would look forward to having a similar program in my neighborhood."

Director of Planning of Community and Economic Development Mark Olinger said he sees this program as a response to the increased number of students who are moving out of older homes and into apartments and condominiums.

"Over the last few years, we’ve seen a significant number of student-oriented housing projects being built," Olinger said. "So, as the students have moved out of the older homes, we have been thinking about what is going to occur to spur new growth."

Olinger added he believes the program would provide more housing options for people who want to live downtown, but do not necessarily wish to live in a condominium.

"We’ve done really well in the condominium development that has occurred, but not everyone wants or desires to live in a condo," he said. "What we’re trying to do is to get people thinking about the older housing stock downtown. We’re test driving this right now."

Funds for the program will be available until Dec. 31, 2008, and they will be distributed on a first-come, first-serve basis.