Location Efficient Mortgages

In "New Energy for Cities" the section "Build High-Performance Cities" mentions Location Efficient Mortgages (LEMs). Pioneered in Chicago, LEMs promote transit-oriented development as well as affordable housing. The Apollo Alliance recognizes that TOD's can often been priced too high for low to moderate income (LMI) families. According to Apollo "LEMs allow homebuyers to capitalize on the savings that result from living near transit service ... by calculating these savings into the purchasing power of the homebuyer." (p 37) LEMs can add increased borrowing power of $30,000 to $50,000. Currently LEMs exist in Chicago, SF, Seattle, LA and Madison, WI. I'll follow this synopsis with a more in-depth look at LEMs and then an outline of Chicago's CityMortgage Initiative, which is highlighted in the Apollo Text.
From the website locationefficiency.com
Welcome!

You may qualify for a home mortgage when you thought you couldn't or be eligible for a larger loan than you expected based on the purchase of a home in a location efficient community.

The Location Efficient Mortgage®‚ (LEM) is a mortgage that helps people become homeowners in location efficient communities. These are convenient neighborhoods in which residents can walk from their homes to stores, schools, recreation, and public transportation. People who live in location efficient communities have less need to drive, which allows them to save money and improves the environment for everyone.

The LEM combines a low down payment, competitive interest rates, and flexible criteria for financial qualification to allow more people to own the home of their dreams.

Further studying the FAQ's and other areas of the website cited in the Apollo guide I became increasingly aware that although this might be a powerful incentive tool for people of middle income to locate to TOD's the LEM does not appear to be that powerful a tool for low to moderate income families, as recorded by Apollo. Within the metropolitan areas I have mentioned, just from my own knowledge, for low to moderate income families to settle in new center city developments, they would need a more substantial subsidy program towards housing. LEM's appear to be more of a program to incentivize people to locate in TOD's (not a bad thing of course) but not really a promotion of affordable housing as Apollo writes.

My impression from the locationefficiency.com website was substantiated by my research of CityMortgage in Chicago - which actually makes no mention outright of LEM's on the city's website, only that competitive mortgage rates are available through the city. However, through the Center for Neighborhood Technology (also mentioned in Apollo) there is information available on Chicago's attempt to combine transportation and affordability. http://www.cnt.org/ht/

This website acknowledges that as transportation and housing are the largest expenses for many families there should be a way of combining the two. LEM's do address that issue but it appears they have not had the effect that was hoped. Note: although this was not directly based on energy efficiency, I was intrigued by LEM's as a powerful tool for promoting affordable housing at TOD's and so I decided to give this further exploration.
Sources:
http://www.locationefficiency.com/
http://www.locationefficiency.com/faq
http://www.cnt.org/ht/