County, bank add $300,000 for home loans

November 03, 1994|By Ivan Penn | Ivan Penn,Sun Staff Writer

Howard County's program to help low- and moderate-income families buy homes will grow by $300,000 today, when county housing officials and Columbia Bank add to the 2-year-old loan fund for first-time homebuyers.

The public-private contribution, the second in a month, will consist of $100,000 from the county and $200,000 from Columbia Bank and will bring to $1 million the funds available for loans or already lent out.

Last month, Norwest Mortgage Inc., a Des Moines, Iowa-based mortgage loan company, contributed $400,000 to the loan program, and the county added $200,000.

"I see this as a wave of the future in terms of meeting the needs . . . for affordable housing," said Michael Galeone, executive vice president of Columbia Bank.

The 2-year-old program makes loans of up to $6,000 to prospective homebuyers with annual incomes of no more than $54,340 who have not owned residential property in the past three years.

The money is to be used for down payments and loan closing costs.

The county has made $100,000 in such loans this year.

The loans have averaged about $5,000, said Leonard Vaughan, director of the county Department of Housing and Community Development.

Mr. Vaughan said the loan program helps make housing affordable because prospective homebuyers don't have to empty their bank accounts to make a down payment.

While the would-be homebuyer tries to save enough money for the down payment, housing costs may continue to increase.

"To have to sit back and wait three to five years to save up the down payment, they're shooting at a moving target," Mr. Vaughan said.

In 1992, the first year of the program, 27 homebuyers received loans; last year, the number was 60.

With the $900,000 recently added to the fund by the county, Norwest and Columbia Bank, the county will be able to help 175 to 200 families a year, Mr. Vaughan said.

An applicant must be a first-time homebuyer, defined as anyone who has not owned a residential property during the three years preceding the loan application. Applicants who meet the income limits must pay a minimum of $1,000 toward the down payment and closing costs.

The cost of the home cannot exceed $157,000.

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