Grants given to aid buyers First Union National provides $100,000 for low-interest loans

Part of $40 million alliance

Moderate-income families targeted in program

November 10, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

As part of a three-year, $40 million alliance with a coalition of community-based housing advocates, First Union National Bank of Maryland awarded $100,000 in grants last week to help low- to moderate-income families become homeowners.

The lender and its predecessor, First Fidelity Bank, have made $12 million in low-interest mortgages and home improvement loans to about 200 Baltimore-area borrowers through the partnership with the Maryland Alliance for Responsible Investment (MARI).

First Union is honoring a pledge originally made by First Fidelity of $20 million for mortgages and home improvement loans and another $20 million for loans to nonprofit developers of affordable for-sale and rental housing, said William B. Freeman Jr., vice president and community reinvestment officer for First Union, which acquired First Fidelity in January.

The program, which will also award $300,000 in grants to counseling agencies, is in its second year.

First Union officials awarded their second round of grants Thursday to 14 organizations affiliated with MARI in ceremonies at the bank's offices on East Baltimore Street.

Organizations rely on such grants to pay counselors to work with prospective buyers, to offer homeownership workshops and to help stabilize neighborhoods in such ways as enforcing housing codes, said Barbara Aylesworth, acting president of MARI.


"Many of the people that come in for counseling aren't ready to buy a house," Aylesworth said. "We may work with them over a period of years. The emphasis may be on improving credit status over a period of time, or helping people get on a budget."

Housing counseling also shows many renters that they can become buyers -- often through programs targeted by income level. Many times, borrowers' mortgage payments end up about the same as their rent.

That was the case for Marion Knox, a 38-year-old single mother renting in Hamilton who never believed she could afford a home on her income as a hairdresser.

When Knox heard about a four-bedroom Cape Cod for sale for $55,000 in her neighborhood, she approached MARI-member Belair-Edison Housing Service. The agency helped her get a below-market-rate mortgage from First Union, as well as help with the down payment through the city's Settlement Expense Loan Program. Knox and her two sons will move in by the end of the month, she said.

"I was so thrilled about the house," even though it needed some cosmetic repairs, she said. "I never thought I'd be able to do it."

Buyers such as Knox have proved a strong market for lenders, Freeman said.

City sales

"Baltimore City, in particular, has continued from month to month to show continued sales," Freeman said. "You have a lot of people who did not know they could be first-time homebuyers. The interest and the demand are there."

Most of the $12 million in loans through the partnership have gone for mortgages on homes averaging $50,000. A small portion of the financing has been in home improvement loans, he said.

But the lender has had fewer takers on loans for nonprofit groups to develop or rehabilitate housing, lending only $200,000 of the available $20 million, Freeman said.

Groups that received counseling grants in the second round included Belair-Edison Housing Service Inc., the Baltimore Housing Roundtable, Catholic Charities, Comprehensive Housing Assistance Inc., Communities Organized To Improve Life, Govans Economic Management Senate, MARI, Maryland Low Income Housing Information Service, Patterson Park Neighborhoods Initiative, Southeast Development Inc., St Pius V Housing Committee Inc., St. Ambrose Housing Aid Center, The Development Corp. of Northwest Baltimore and Tri-Churches Housing Inc.

A total of 20 organizations are members of MARI.

Anyone seeking information on MARI programs can call the fTC coalition's homeownership hot line at 332-1386.

Pub Date: 11/10/96

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