A county Realtors club has established a trust fund to assist moderate-income buyers with down payments and closing costs to settle on their first homes.
The effort comes at a time when the money in a county government program that aids qualifying first-time homebuyers has been exhausted.
"Quite often in this business we see very qualified buyers who are locked out of buying a home because of the strong up-front cash needed to settle in this county," said Emily Lincoln, an associate broker with RE/MAX in Columbia and founder of the Howard County Real Estate Masters Club.
The 62-member club, which is pledged to assisting community and civic efforts, launched the new effort. So far, the club has raised about $30,000 for the fund.
About $23,000 of that total was raised Oct. 15 at an auction fund-raising event that drew about 400 people. The other $7,000 was raised in April when members of the club donated 5 percent of their commissions to the fund, said Joan Brunett, a club member and real estate agent with RE/MAX in Columbia.
Masters Club members must have settled $25 million in the seven years prior to seeking membership or to have settled $5 million annually in any three of the past seven years.
The club, which currently has a pool of four possible candidates, hopes to select its first homebuyer sometime early next year, possibly in February of March.
The group hopes to assist on average two or three buyers annually. For now, the program will be limited to county residents.
The club plans to conduct fund-raisers annually to replenish the trust fund.
The fund will be used to advance homebuyers with down payment money and closing costs, such as paying higher discount points to help the buyer get a lower interest rate. It also might be used to help a buyer pay other home purchase costs, such as home inspection fees.
Deborah J. Galinsky, of the county's Housing and Community Development Office, says it appears the trust fund program might prove particularly helpful in lowering interest rates for buyers, thereby making the monthly payments more affordable.
"Housing costs are very high in this county," said Mrs. Galinsky.
The median price of homes sold in Howard County between mid-September and mid-October was $229,000, according to the Greater Baltimore Board Realtors.
The county's stiff housing costs has been a sore issue with some county school and government employees. A survey of those workers conducted earlier this year by the Columbia Forum, a nonprofit research group, found many of the workers feel excluded from Howard County housing because of high prices. Twenty-one percent of the survey respondents said they had household incomes under $40,000.
For now, the trust fund program has no firm income limitations, but candidates would have to prove their need for the assistance.
Applicants would have to qualify to make the monthly payment on the loan. Because homes priced under $50,000 are virtually impossible to find the county, it is unlikely low-income wage earners will be aided by the fund.
Most likely, the fund will assist buyers with incomes between $30,000 and $40,000, said Mrs. Brunett.
"We want this to be a successful program. The main thing we're looking for are people with a history of stability and effort in their work and family life," said Mrs. Brunett.
"They should also have a history of sound credit, but the credit history doesn't have to be absolutely perfect as long as there is a good reason for some bad credit, like illness or a job layoff."
The program also will require the buyers to have some money available -- probably between $1,000 and $2,000 -- which they can use for the down payment or closing costs, said Mrs. Brunett.
The program will require that recipients repay the fund, though the mechanics of how that repayment would work haven't been settled.
Organizers hope to have lenders structure the loan in such a way that the borrower will repay the trust fund advance.
Columbia Bank has agreed to issue the first loan for the program, said Mrs. Brunett.
The group is hoping to generate referrals for the program from church, civic and community groups, but may also accept nominees from those working in the real estate industry.
"We see this fund staying around a long time to fill in gaps in assistance to homebuyers as they arise," said Mrs. Lincoln.
A big gap in that assistance currently exists in the county.
A county government program that provided first-time homebuyers with as much as $6,000 in down payment costs has run out of money, said Mrs. Galinsky, the county Housing and Community Development office administrator.
The program, funded with $250,000 when started in April 1993, has assisted 60 homebuyers with incomes of less than $51,900 with settlement costs.
State housing officials note that the trust fund might be used in conjunction with a low-interest loan program they administer.
The Maryland Department of Housing and Community Development's low-interest mortgage loans, available through the Community Development Administration, are available to first-time buyers only.
The 30-year loans' interest rates recently dropped from 6.75 percent to 5.50 percent and 5.95 percent.
The income limit for the loans is $30,200 for those applying for the 5.50 percent interest rate and $37,000 for a single person applying for the higher rate loan.