WASHINGTON — An article in the Maryland section on June 9 incorrectly reported that an Irvington man purchased a home through a Neighborhood Housing Services program for low- and moderate-income families after he got married in November. The man, Michael Warden, bought the home in August 1991 -- more than a year before his wedding. He and his wife, Karen, have a combined income of about $60,000 a year.
The Sun regrets the errors.
WASHINGTON -- When Michael Warden got married in November, he had no credit history and thought he and his wife, Karen, would live in a rented apartment forever.
FOR THE RECORD - CORRECTION
The Wardens now own a restored 80-year-old home in Irvington, thanks to a neighborhood reinvestment company that provided them with the leverage and resources to buy their first house.
The nonprofit company, Neighborhood Housing Services (NHS), launched a national development campaign in Baltimore and 19 other cities yesterday aimed at helping 10,000 low- to moderate-income families buy houses over the next five years.
Company officials said they have raised nearly $650 million in support from banks and other lending institutions to bolster efforts of its 20 branch offices.
Baltimore is expected to receive $6 million for the project from the national campaign and local donors, said Michael Braswell, executive director of the company's Baltimore office.
Mr. Braswell said he hopes to help 100 families buy houses by the end of 1994.
At a news conference yesterday, Federal Reserve Board member Lawrence B. Lindsey said raising home ownership rates -- which have declined steadily since the early 1980s -- are crucial to repairing the nation's sputtering economy.
"Home ownership goes beyond price in what it does for human pride," Mr. Lindsey said.
The Wardens wholeheartedly agreed.
"I knew the banks wouldn't even talk to me," said Mr. Warden, 39, a maintenance supervisor. "NHS were the only ones who listened. When you have more home ownership, you have more pride in the community."
The couple said crime has dwindled in Irvington, where home ownership increased from 49 percent to 60 percent between 1986 and 1992 -- in part because of the housing services' aid to 84 low-income buyers like the Wardens.
In Baltimore, the company has granted more than $24 million in loans since its creation in 1975 with a 5 percent delinquency rate for what would normally be viewed by lending institutions as high-risk loans, Mr. Braswell said.
The local company has stimulated the housing market in Patterson Park and Govans, and plans to step up efforts to encourage home ownership in Coppin Heights, Irvington, St. Joseph, Carroll and other areas by the end of the campaign, he said. Most of the houses purchased through the program are valued at $30,000 to $50,000.
Of the homebuyers the company serves, 40 percent are single working mothers, 48 percent are black and 11 percent are Hispanic, Executive Director George Knight said.
"When home ownership rises, crime drops, education improves. . . . Soon you see people having block parties in their neighborhoods. People are talking to each other about what can done about the pride and livability of that neighborhood," Mr. Knight said.
The housing services company packages its financial support according to each homebuyer's needs, Mr. Braswell said.
Mr. Warden started with a basic loan and mortgage, at an interest rate of 3.5 percent.
The interest rate for the loan climbs by one percentage point each year and flattens out at 7.5 percent.
With the money saved in low loan payments, the Wardens repainted their new home and put new linoleum in their kitchen.
"Before I knew about NHS, I didn't ever think I'd own a home." Mr. Warden said.
HUD Assistant Secretary Nicolas Retsinas told reporters: "There no more effective social program in this country than home ownership."
Well-established lending institutions are eager to participate because making loans to low-income buyers backed by the housing services company is "good business" said Joe Peters, executive vice president of the First Bank of Maryland.
Because the company provides some of the money for down payments, "a lot of the loans are more modest [in] size than in normal residential lending," Mr. Peters said. "And it improves the local economy."
"By the end of this campaign, we may create a new definition of what 'bankable borrower' really means," Mr. Lindsey said.