Fannie Mae programs aid city residents 3,900 families assisted with housing since effort began in '94

$5 million loan awarded

Company is lending money to Baltimore for 8 developments

August 25, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Two years after kicking off a plan to help 10,000 Baltimore families buy or rent affordable homes, the Federal National Mortgage Association, Fannie Mae, said its programs have assisted 3,900 families so far.

Marking the second anniversary of House Baltimore-- a commitment of $750 million worth of mortgage purchases and other housing investments over five years -- Fannie Mae officials also announced Wednesday a $5 million loan to the city to help finance eight new housing developments.

The projects, some under development by nonprofit groups, will create more than 200 units of housing across the city.

Projects include rental apartments for the elderly and rehabilitated vacant houses for sale, said David K. Elam, director of the Fannie Mae Baltimore Partnership Office. The office oversees House Baltimore.

Since 1994, 3,900 families have used Fannie Mae products or programs to get affordable housing, such as a program tailored for city employees, one designed to boost homeownership in seven city neighborhoods and another that requires only a 3 percent down payment to buy a house.

Of those families, 48 percent had low to moderate incomes, nearly 40 percent were minorities and more than 50 percent were first-time homebuyers, Fannie Mae said.

"We are pleased to have helped so many people obtain affordable housing," said William E. Kelvie, Fannie Mae executive vice president. "What has occurred is a preview."

Besides the $5 million city loan, he said, Fannie Mae will make an initial $400,000 equity investment in Harbor Bankshares Corp., the largest minority-owned lender in Maryland.

The investment should allow the bank to expand its community mortgage lending, said Kelvie, who made his comments during a news conference Wednesday in the lobby of Harbor Bank on TTC West Fayette Street. The bank became one of Fannie Mae's newest approved lenders this year.

"I believe there is something prideful and beneficial about owning your own place, and we want Harbor Bank to be part of that," said Joe Haskins, president of Harbor Bank. "Our commitment is meeting the needs in this community."

Rep. Elijah E. Cummings, a 7th District Democrat who attended the news conference, said he would continue to support the efforts of Fannie Mae, a congressionally chartered, shareholder-owned company that purchases mortgages and repackages them as securities to sell to investors.

"What you're doing is affecting lives," Cummings said, recalling his own childhood experience when his family had saved enough to buy its first house, in Edmondson Village. "When we talk about empowering people, you cannot get a greater empowering thing than a house."

During the first two years of House Baltimore, Fannie Mae officials worked with the city to establish the Employee Homeownership Program, which has so far helped more than 200 city employees buy homes.

The program offers loans of up to $10,000 for down payments and closing costs to borrowers who rent or who haven't owned a home in three years.

Fifty families used the Homeownership Home Sale Incentive Program, in which city money was paired with mortgage financing to encourage home buying in seven neighborhoods.

Another 30 families used Fannie97, a loan program in which buyers with adequate income for monthly mortgage payments can borrow up to 97 percent of the home's appraised value or the sales price, whichever is less.

Fannie Mae also invested more than $31 million in apartment construction loans and low-income housing tax credits to support affordable housing.

The Lafayette Square townhouses will be among the projects getting financial assistance as part of Fannie Mae's $5 million loan to the city, Elam said.

St. Pius V Housing Committee Inc., a nonprofit developer, will renovate 10 vacant rowhouses on three blocks in Harlem Park, said Jelili Ogundele, the group's executive director.

The three-story homes, which should cost about $80,000 to renovate, will then be sold to low- to moderate-income buyers. Because the loan will subsidize the cost of renovation, monthly mortgage payments will be kept in the $425 to $450 range, less than some monthly rents.

Once the homes are sold, homeownership rates should rise from less than half to about three quarters of those three blocks, Ogundele said.

"This is our way of empowering individual families in our community," Ogundele said.

Pub Date: 8/25/96

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