Fannie Mae, which five years ago made a multimillion-dollar commitment to improve housing opportunities in Baltimore, will announce tomorrow a new, five-year, $4.2 billion initiative to continue its work in the city and expand its programs to surrounding counties.
The announcement, part of a VIP reception at the Camden Club celebrating the success of HouseBaltimore, will be made by Fannie Mae Chairman and Chief Operating Officer Franklin D. Raines. The company, which is the nation's largest source of financing for home mortgages, hopes the initiative will aid 40,000 families in the area by directing the money toward revitalizing older neighborhoods and by expanding minority homeownership opportunities.
"The success story in Baltimore has been about breaking down barriers and offering creative, affordable solutions to local housing problems," Raines said in a prepared statement.
According to David Elam, director of the Baltimore Partnership Office -- the first to be created by Fannie Mae nationwide -- HouseBaltimore exceeded its original goal of $750 million by providing more than $815 million in affordable financing to lenders and developers since 1994. The company estimates that its commitment helped to create housing for more than 14,000 city families.
"I am real particular about the fact that what we have done is a result of working with our partners; we have a strong partnership with the city, which we anticipate to have with all the surrounding counties," Elam said, adding that only Carroll County, because of its lack of older neighborhoods, would not be included in the new initiative.
"Given our focus for looking at older areas, we decided to go with those four [Baltimore, Anne Arundel, Harford and Howard] additional jurisdictions," Elam said. Elam said 70 percent of the $4.2 billion will go to single-family housing, with the balance going to multifamily projects and equity investments.
The announcement comes at a time when home sales in the city and surrounding counties are running at a record pace. Elam said city homeownership was at 48.9 percent when the HouseBaltimore program started. Today, according to Tom Jaudon, chief of the city's Homeownership Institute, the rate has climbed to 57.4 percent.
Fannie Mae also reported that minority lending in the city the past five years has increased from 24 percent to 33 percent.
"I think they have been the impetus to move homeownership upward," Jaudon said. "They bring their marketing expertise and bring their dollars, obviously, and they brought their commitment to the city."
Part of Fannie Mae's commitment in the past five years has been as a $4 million equity partner with Struever Brothers, Eccles & Rouse in the American Can Development in Canton and a $1 million commitment to Spicer's Run, an 86-unit townhouse community on the edge of Bolton Hill.
"We needed equity dollars in the project and they came up with those dollars," said Wendy Blair of Blair McDaniels LLC, developers of Spicer's Run. "So their involvement in the project was critical."
Other Fannie Mae-supported programs that Elam hopes to bring to the surrounding counties are its Settlement Expense Loan Program, which allows buyers to finance up to $5,000 of their closing costs and settlement fees, and HomeStyle, a mortgage that allows for purchasing and rehabbing properties.