New loans attract many applicants $43 million set aside to help communities in older suburbs

'Overwhelming' response

41 businesses apply for money in program for Baltimore County

July 17, 1996|By Joe Nawrozki | Joe Nawrozki,SUN STAFF

Hundreds of prospective borrowers are scrambling for $43 million in new loans designed to strengthen Baltimore County and other aging suburbs by stimulating small-business expansion and luring homebuyers.

In the first week after Gov. Parris N. Glendening announced a low-interest mortgage program, county residents have laid claim $1 million of $6 million reserved for home purchases in older neighborhoods.

More than 400 first-time homebuyers statewide, and dozens of small-business owners from Pikesville to White Marsh, have applied for loans from the Maryland Mortgage Program and another program involving a partnership between the county and 16 lenders.

"The response has been overwhelming; we haven't been off the phone," Gary Tavin, spokesman for the state Department of Housing and Community Development, said yesterday.

Robert L. Hannon, executive director of the county Department of Economic Development, said 41 small businesses have applied for more than $2 million of the $3.2 million loan pool created to help revitalize older communities.

"This is not a one-shot deal," said Hannon. "We intend to replenish the capital. This program is very much an active part of our plans well into the future."

Last week, County Executive C. A. Dutch Ruppersberger III unveiled the loan pool as part of his continuing effort to revive older neighborhoods. The pool, created in a partnership of the county and 16 banks and savings and loans, will provide maximum loans of $250,000 to eligible applicants in areas such as Essex-Middle River, Arbutus, Dundalk, Towson and Catonsville.

A few days earlier, the governor announced the availability of $40 million in low-interest mortgage loans for more than 500 borrowers, including funds solely for home sales in older neighborhoods in Baltimore County and other aging suburbs around Maryland. More than $6 million is reserved for Baltimore County.

As of yesterday, statewide requests had been accepted for more than $11 million in loans.

"The lure of the program are the interest rates, which range from 6.75 percent to 7.5 percent based on the borrower's income," Tavin said. When the program was announced, Tavin said the market rate for such loans was 7.58 percent to 8.25 percent, depending on the number of points included in the deal. The difference, he said, could save borrowers as much as $2,500 a year.

The state redirected its mortgage program by encouraging counties to distribute loans in older -- but not necessarily low-income -- neighborhoods. Baltimore and St. Mary's counties have agreed to restrict their loans to certain older neighborhoods.

In Baltimore County, that covers 33 communities, including Anneslie, Arbutus, Catonsville, Fullerton, Lutherville, Rodgers Forge and Towson.

To lure middle-income residents, the state -- for the first time -- has allowed counties to raise eligibility limits. That will extend the program to borrowers with higher incomes and allow them to buy more expensive homes.

For instance, in Baltimore County, a one- or two-person household earning up to $67,200 can buy an existing home for up to $171,886 and a new home for up to $192,898 in targeted areas. Normally, a one-person household can earn no more than $44,800 and buy a house costing no more than $110,000 to qualify for a state loan.

In the county business loan program, the average request is $50,000, Hannon said.

The majority of applicants -- 30 -- have come from existing or

proposed bars and restaurants in Towson, Parkville, Dundalk and Middle River. Nearly two dozen applicants are seeking approval for loans in the fast-food or pizza business.

Others seeking loans are in the carpet, wigs, lumber, bakery and dry-cleaning businesses.

"The largest number are for equipment financing," Hannon said.

Neither state nor county officials would identify loan applicants, citing confidentiality.

Loan informationCall (800) 638-7781 for information about the state home loan program, or 887-8000 for details about Baltimore County's small-business loan program.

Pub Date: 7/17/96

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