This may be a slow housing market, but the town houses at Falls North are selling briskly.
The 40-unit town house development in the Walbrook area of West Baltimore was financed with a package of government grants and loans, and low-interest mortgage money is available from the state to make the houses affordable.
Partners Elinor Bacon, Bruce Scherr and Otis Warren, who formed Falls North Partnership, are pleased with the results: Since opening for sales in June, all but five of the houses have been sold.
Because of the subsidies, buyers who have $2,500 in cash with incomes of $24,000 and an acceptable debt load can afford the houses.
The three-bedroom houses with one-and-a-half baths are selling for $66,000 to $74,000.
Located between Walbrook and North Avenues, the land used to contain vacant houses and a run-down apartment house. The houses facing North Avenue overlook Gwynns Falls Park.
The houses are designed with Victorian exterior features so that they will blend in with the older frame houses in the neighborhood. Falls North is the first major new housing development in Walbrook since the 1950s.
"We started working on this project in 1987. It took a long time to put together, but we did it with a creative patchwork of subsidies," said developer Elinor Bacon of Bacon & Co. Inc.
The city cleared the site and sold the land to Falls North Partnership for $40, or $1 a lot.
The City Neighborhood Progress Development Fund is providing $400,000 in construction financing without interest. Those funds will be used to reduce construction and settlement costs of the houses.
To keep the prices of the houses affordable, the $400,000 will be converted into second mortgages of $10,000 per unit at each individual settlement.
Homeowners do not make monthly payments on the second mortgage, and payment is only due when the town house is sold.
After the first mortgage is paid, then the balance of the selling price is applied to the second mortgage, even if it does not cover the total amount.
Baltimore Regional Community Development Corp., an affiliate of the Baltimore Regional Council of Governments, provided a $200,000 construction loan at the below-market rate of 6 percent interest.
Also contributing to the financial package is the Community Development Administration of the Maryland Department of Housing and Community Development, which set aside $2,830,000 in mortgage money at 7 percent interest.
Another feature of the development is $54,000 worth of energy-saving measures. Provided by the Baltimore City Energy Demonstration Program, the extra insulation and gas heat energy savers were divided among several of the houses.
"It's a great project for the community and the city, but it would have been impossible to produce these houses in this [real estate] climate. Right now it's terrible," said partner and builder Bruce Scherr, of Bruce Scherr Development Co. Inc. in Baltimore.
About 95 percent of the buyers are first-time homeowners. They range in age from the mid-20s to early 60s. A variety of people have bought houses in the development, including teachers, postal workers, government and private sector workers.
Otis Warren of Otis Warren Real Estate Services in Baltimore is the development partner responsible for sales. "Our sales have been going great," he said.
"There are very few new homes in Baltimore City in traditional neighborhoods that are not going through rejuvenation. This is an establishedcommunity where people want to live," Mr. Warren said.
Community residents are pleased with the development, said Georgine Edgerton, vice president of the Greater Walbrook Coalition, a group representing four community groups in the area.
She said the Falls North developers met with community representatives and discussed their plans for the site before any work actually began. "So we understood what they were doing. I see it as an improvement."