Pennsylvania Mortgage Incentives Handed Out to Buyers

While not nearly as sluggish as some of the country’s more volatile housing regions, the Pittsburgh housing market has seen better days.

And developers, builders and others are coming up with ways to attract more buyers. They are offering up an array of incentives from more favorable home loan financing to a free fireplace or an upgraded kitchen.

The head of one of the Pittsburgh region’s largest home builders, Upper St. Clair-based Heartland Homes Inc., which expects to sell more than 500 homes this year, said his firm has several incentive packages to attract potential Pennsylvania mortgage shoppers.

Martin Gillespie, president of Heartland, which builds and sells in Butler, Allegheny and Washington counties, said the company does not offer discounts on its homes.

“We don’t do any real significant discounts as far as pricing goes,” Gillespie said. “We try to keep the neighborhood pricing pretty stable.”

But the firm takes steps to make the purchase of its single-family houses - averaging about $340,000 each - more attractive.

“A lot of times we try to do something with mortgages,” Gillespie said.

Working with Princeton Financial Systems of Princeton, N.J., Heartland will sometimes offer its customers below-market rates on their mortgages.

For example, Gillespie said, “you could get a 30-year fixed-rate mortgage for 5.5 percent (interest).”

Also, Gillespie said Heartland will hold promotions in collaboration with its window and fireplace suppliers.

“You’d get a free fireplace with the home,” Gillespie said.

Chris Cinker, regional sales manager for the Valencia office of State College-based S&A Homes, which builds in Pennsylvania and West Virginia, said his firm uses similar strategies to sell its homes.

The company also uses a 2-1 buydown program with its mortgage lender Integrity Home Funding LLC, a branch of Wells Fargo, he said. If a buyer’s interest rate is 6 percent on a 30-year mortgage, the buyer will pay 4 percent the first year, 5 percent the second year and 6 percent in years three through 30.

“I think that is a very good tool to use for customers that are move-up buyers,” Cinker said.

The firm does not offer percentage discounts on Pennsylvania home prices, but will occasionally offer price reductions on options.

“Sometimes we will offer half off on options up to $15,000, for example,” Cinker added, listing higher-quality finishes, flooring, granite and other amenities as possibilities.

In some situations, however, home buyer incentives or discounts are off the table.

On his 151 First Side development, an 82-unit condominium project Downtown, Ralph Falbo, president of Downtown-based Ralph A. Falbo Inc., said his firm did extensive market research prior to construction to be sure the units were priced correctly.

“I think that when we originally started to do the building, we hired a market research company,” he said. “It becomes sort of a consultative cooperative effort … and then you hope to God it works.”