Housing fund aims to lure buyers Middle-income residents sought for poorer neighborhoods

April 02, 1997|By Tom Pelton | Tom Pelton,SUN STAFF

Housing officials yesterday unveiled a federally funded program designed to help middle-income people buy houses in the city's poorer neighborhoods by paying part of their down-payments and taxes.

The "Empowerment Zone Housing Venture Fund" will pay up to $5,000 toward the initial costs of buying a house for the first 400 working people who promise to live in the city's poorer neighborhoods for at least five years.

The initiative is designed to stabilize communities at risk of falling apart and help people who might not otherwise be able to come up with enough cash upfront to buy a home, said Michael Preston, a spokesman for the Empower Baltimore Management Corp., a nonprofit agency that distributes federal Housing and Urban Development funds.

"We find that one of the biggest obstacles to people buying homes is that they don't have enough money to cover the down payment and closing costs," said Tim Carlsgaard, a spokesman for the federal National Mortgage Association (Fannie Mae), which is helping with the new program. "We are hoping this program will help these people and help the neighborhoods at the same time."

The first person to benefit from the program is Bill Toscano, a 38-year-old theater director who received $5,000 in federal funds to buy a renovated century-old brick townhouse in the working class Pigtown/Washington Village neighborhood west of Camden Yards.

Toscano, a ponytailed former actor who earns between $20,000 and $30,000 a year, said he wanted to buy a home in the historic neighborhood -- nicknamed "Pigtown" because pigs in the 19th century were herded through the streets to slaughterhouses -- because he recently opened the Forum theater nearby at 912 Washington Blvd.

But the problem he faced was the same that artists have wrestled with for centuries: not enough money.

Toscano had enough to pay for his former $450 per-month apartment in Fells Point. He even had enough to cover the $557-per-month mortgage payments for the century-old brick townhouse he wanted to buy at 905 Ryan St. near his theater.

But he didn't have the upfront cash: $5,760 in closing costs for the $72,000 townhouse, which includes city taxes, title insurance, registration fees and a property survey. He applied for the program and got the $5,000 grant that allowed him to buy the home.

"I don't want to live in suburbia," said Toscano. "I want to live in the city, where the action is. But there is no way that I could have come up with the money upfront to buy this home. Now I can live a short walk from my theater."

The program was announced yesterday at a news conference outside Toscano's new home by officials with Fannie Mae, the city and the Empower Baltimore Management Corp.

The $5,000 grants can be used only to buy houses in one of the city's three "Empowerment Zones." These are HUD designations for areas that need economic help in East Baltimore, West Baltimore and Fairfield/Wagners Point. A family of four would need an annual income of between $16,250 and $43,300 to qualify for the grants.

The city launched a program about two years ago that gave city employees up to $10,000 toward the initial costs of buying homes anywhere in the city. But that $2 million initiative was so popular the funds ran dry after 11 months. Now the city will restart the program at a $5,000 per-person level in July, according to Zack Germroth, city housing spokesman.

In a similar initiative, the city in February announced a program that provides loans of up to $5,000 to help middle-income residents afford the initial costs of buying homes. The money from this program, however, must be paid back over 10 years at a 7 1/2 percent interest rate.

"The theme with all these programs," said Carlsgaard, "is bringing people back into the city."

Pub Date: 4/02/97

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