HUD strategy points 'new way home'

June 06, 1995|By Lorraine Mirabella | Lorraine Mirabella,Sun Staff Writer

As part of a national strategy to put 8 million more families into their own homes by the year 2000, federal officials in Baltimore kicked off an expanded effort yesterday toward making home buying in Maryland simpler and more affordable.

With many of the details still to be worked out, officials at the local Housing and Urban Development office unveiled two new partnerships created to reduce closing costs and teach consumers how to shop for and finance a house.

The administration's program calls for no additional spending or grants. Instead, it relies on public and private organizations working together to make financing and transaction costs more affordable, remove discriminatory and regulatory barriers and reach millions of potential buyers who never thought they could own a home.

"This is the new way home for the American middle class," President Clinton said during an address at the White House launching the new effort.

At the HUD office on Howard Street, housing officials and members of an industry task force -- lenders, real estate agents and nonprofit housing groups -- gathered as part of the program's official start and vowed to work with HUD to expand homeownership locally.

The homeownership rate has been slipping since 1980, after more than four decades of steady growth. If not for the drop in homeownership, an additional 1.5 million families would now own their own homes nationally, HUD officials estimated.

The goals of the new program stemmed from about seven months of discussions between Housing and Urban Development Secretary Henry G. Cisneros and 50 or so national public and private associations, including the American Bankers Association, the Enterprise Foundation, Habitat for Humanity, the Mortgage Bankers Association, the National Association of Realtors, the National Association of Home Builders and the NAACP. The strategy relies on the groups' local affiliates to form partnerships with HUD or other government agencies.

Yesterday, Harold D. Young, acting state coordinator for the local HUD office, signed the first two such local partnerships, one with the Real Estate Brokers of Baltimore Inc., the other with the state's Department of Housing and Community Development, said Candace S. Simms, HUD's single-family housing director.

The Real Estate Brokers, an association of predominantly black real estate agents and brokers, plans to offer free mortgage credit reports -- which typically range from $45 to $65 -- to all clients under contract buying a HUD property or using HUD financing this month.

Some 679 HUD homes are for sale in metropolitan Baltimore. The agency assumes ownership of homes when a lender is forced to foreclose on an FHA-insured loan.

Janice B. West, president of the Real Estate Brokers, said her members agreed to pick up the credit report costs to help clients who struggle to make the down payment and closing costs. Those upfront costs are typically among the greatest hurdles for first-time buyers.

Members of her association work with many minority clients who never realized they could qualify for a mortgage, Ms. West said. The rate of homeownership for minorities lags far behind the national rate of 64 percent -- with 40 percent of African Americans and 43 percent of Hispanics owning a home.

"I think this will help," Ms. West said. "The low-income person will not be left out of the homeownership process."

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