Helping with high closing costs

August 05, 1993

Today's low interest rates are scant consolation to would-be homeowners who simply do not have enough cash to pay the closing costs. Those costs -- which include one full year's property taxes as well as points and transfer and recordation fees -- are particularly high in Baltimore City.

Late last year the municipal government earmarked $2.5 million for a program in which purchasers of homes costing $60,000 to $100,000 can borrow up to $5,000 for closing costs. The Neighborhood Housing Services of Baltimore is now taking the idea further by offering similar closing-cost loans for less expensive homes.

Under a pilot program, persons buying homes in the West Baltimore neighborhoods of Coppin Heights, Irvington, St. Joseph and Carroll may qualify for closing cost help. In a few months, the housing group hopes to extend the program to cover the Mondawmin, Beechfield, Rognel Heights and Edmondson Village areas as well.

"We will have up to $500,000 for this purpose in the next two years, enough for 100 to 150 houses," says NHS executive director Mike Braswell.

The closing-cost program is part of the nationwide housing organization's drive to increase home ownership. "We have this unique window," Mr. Braswell said of the low interest rates. "These things will turn around."

NHS is renovating houses in several West Baltimore neighborhoods. Those houses, as well as homes bought on the commercial market, qualify for the loan program. Initially, two lending institutions -- First National and Maryland National -- are participating, according to Mr. Braswell.

In its 19 years in Baltimore, the non-profit NHS has forged a partnership with financial institutions and other local companies. a result, it has packaged some 1,500 loans totaling $22 million to further rehabilitation and homeownership. Even though it deals with limited-income borrowers with little or no prior credit record, failure rates have been negligible.

Neighborhood Housing Services was responsible for starting the revitalization that is continuing in Butchers Hill, near Patterson Park. Its main focus today is in two West Baltimore neighborhoods, Coppin Heights and Irvington.

Between the efforts of the city and a bevy of non-profit organizations, Baltimoreans thinking of buying a home of their own have much to choose from. The new NHS settlement aid program ought to help make dreams come true.

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