City home renters would become owners as state seeks to transform 30 properties Houses taken over by Md. Housing Fund

March 12, 1997|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

Sometime within the next two weeks, David Smith will go from home renter to homeowner. He won't have to move an inch, and the change will save him nearly $200 a month.

Smith is one of the occupants of 30 single-family homes in the city taken over last year by the Maryland Housing Fund, the unit in the state Department of Housing and Community Development that insures state housing loans.

John MacLean, the state official charged with disposing of the 30 properties, said the primary goal is to get as many tenants as possible to buy the homes, formerly owned by the Baltimore Housing Partnership. Smith's three-bedroom home at 1519 E. 29th St. is one of two of those properties tenants have agreed to buy.

The housing partnership originally purchased 39 homes in the Coldstream-Homestead-Montebello neighborhood under a $2 million loan from the state. They were part of a pilot program intended to promote home ownership by renting properties to families that did not qualify for homeownership.

By the time the deadline came last year for paying off the 4-year-old state loan, however, only a handful of the houses had been sold.

The partnership then turned the 30 remaining properties over to the state rather than go through formal foreclosure proceedings.

The housing partnership, a nonprofit corporation set up more than a decade ago to promote private homeownership in Baltimore, has been placed on probation by state officials because of continuing financial problems.

Jackie Boyd, executive director of Adopt-A-House Development Corp., which was involved in the original program, said that officials apparently underestimated the intensive counseling needed to convert renters to owners.

She said the four-year time limit also proved unrealistic.

MacLean, who said the properties were in "various states of repair" when taken over, worked with Smith first to make needed repairs on the property -- including installation of a new gas furnace -- and then to help him get the financing that made the purchase possible.

State officials also discovered and cleared up a long-standing lien on the house for unpaid water bills that predated Smith's arrival about two years ago.

For Smith, once the problems were cleared up, the calculations were simple.

Buying the $40,000 house he has lived in for 25 months means he'll pay $289.54 a month in mortgage payments, compared with the $480 a month he's been paying in rent.

"All my concerns have been addressed," Smith said, adding that the former owners -- the housing partnership -- "did absolutely nothing."

Smith and 18 others who occupy the former partnership homes have a powerful motive to purchase: their money. Under the program originally set up by the housing partnership, a portion of the monthly rents went into an escrow account for an eventual down payment. If Smith and the others do not go forward with a purchase, the escrow payments will be lost.

While Smith is preparing to become a homeowner, the state is continuing its efforts to sell the remaining houses and reduce its losses.

"We've got two down and 28 to go," said MacLean.

Pub Date: 3/12/97

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