Savings banks seek to improve affordable housing Baltimore County rehabilitation project is called model of how system should work

March 02, 1993|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- The nation's savings institutions published a set of "principles" yesterday to try to improve access to affordable housing and credit for low- and moderate-income groups, citing a Baltimore County rehabilitation project as an example of how the system should work.

The initiative came in advance of banking reforms that President Clinton is expected to announce this week to try to ease the credit crunch on small businesses and in the wake of reports of discrimination in the mortgage market.

The 2,100 members of the Savings and Community Bankers of America committed themselves yesterday to upholding anti-discrimination laws, providing credit on a fair and equitable basis, pursuing outreach policies in their communities, improving training in the handling of applicants of all backgrounds and income levels and working with the public and private sectors to promote affordable housing.

"In doing this, we will be assisting our communities with housing credit, affordable housing and job creation," said F.V. "Pete" Allison Jr., chairman of Mutual Community Savings Bank of Durham, N.C., who led an industry task force on housing opportunities.

The Baltimore example cited by the group was Circle Terrace Apartments on the city-county line in Lansdowne. Built in the early 1970s, the 23-building complex, known originally as Lake in the Woods, fell into disrepair.

"It was deplorable," said Catherine Page, head of the residents' association. "No work orders were done.Sometimes there was no water. Sewage backed up in the basement. All the basement apartments were just flooded out. They just started boarding them up one by one."

That's when Judy Siegal, a developer from Providence, R.I., stepped in and sought financing from the state and county administrations and from Loyola Federal Savings Bank to upgrade the development.

Loyola participates in the Federal Home Loan Bank System's Affordable Housing Program, which subsidizes the rehabilitation of low-income housing for ownership or rent. Since the program's introduction in 1989, 54,000 units in about 1,000 projects nationwide have been renovated or built for low-income residents.

Backed by a federal subsidy, Loyola Federal advanced a long-term, fixed-rate $4 million loan to Ms. Siegal toward the rehabilitation of the Circle Terrace Apartments.

The Housing Finance Agency of Maryland's Community Development Administration pumped in an additional $2.2 million, Baltimore County added $900,000 and the sale of low-income-housing tax credits raised an additional $5.4 million in equity, according to Peter J. Ponne, a vice president at Loyola Federal.

The result, 15 months later: Three hundred Circle Terrace units have been modernized with new kitchens, bathrooms, windows, renovated stairwells and new cladding. The work is 90 percent complete, and most of the apartments are occupied by families with incomes of less than $20,000 a year, half the area's median income.

"It is not a philanthropic project by any means," Mr. Ponne said. "It is a project that makes sense, and yes, you can make some money on it."

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